The interim manager was deployed at a global listed manufacturer of fragrances and flavorings. He supported the Group CFO on a temporary basis as the project manager responsible for a post-merger integration of the finance function. The project assignment: development and implementation of a concept for the integration of an acquired French group with 41 companies worldwide. The mandate included the transition to accounting standards in accordance with International Financial Reporting Standards (IFRS), the shortening of the financial statement preparation timeline ("fast close") including test financial statements, the introduction of a new reporting process and worldwide training.
Ensuring the reporting of an acquired group in accordance with IFRS
The client had acquired an international manufacturer of pet food headquartered in France in 2014. Due to the MDAX listing, the challenge was to integrate the financial function of the acquired group within 3 months and to ensure that the subsequent quarterly reporting complied with IFRS. The project manager was supported by a (partly virtual) international and interdisciplinary project team (including IT, Tax, Legal) with up to 15 members.
IFRS opening balance sheet prepared without purchase price allocation
In collaboration with the project team, the interim manager developed a comprehensive integration plan. This began with "guiding principles" such as simplifications and principles for consolidation, which served as orientation during the integration. Based on his professional experience in auditing, the interim manager took the lead in implementing the necessary changeover to IFRS (from French GAAP). The focus here was on accounting differences between significant transactions, which were identified in workshops with the client. The early involvement of auditors in the changeover process was a key success factor. In order to meet the deadlines, the interim manager prepared the IFRS opening balance sheet without a comprehensive purchase price allocation.
Intercultural challenges moderated and team built
In addition to the organizational integration, overcoming cultural differences in the teams from Germany and France was an integral part of the project. From day one, the interim manager therefore placed particular emphasis on forming project teams with employees from the accounting departments of both companies. The interim manager organized and moderated the first meetings himself. Later, the teams developed a great deal of initiative and organized themselves more and more independently.
Reporting processes integrated into new ERP system with shortened timeline
In the next step, the interim manager defined the future reporting process. As it was not possible to fully implement the reporting process in a recently introduced ERP system within the given project timeframe, the interim manager developed a workaround together with the team. An Excel-based converter ensured the transition from GKV to UKV and guaranteed the correct mapping of local accounts to reporting items. Adjustments to IFRS were posted in the converter before the values were transferred to a tool to validate the data. After validation, the IFRS values were then imported into the consolidation system for further processing at group level.
The next stage of the project was to reduce the preparation of the financial statements from the previous 10 working days to just 5 working days in future. To do this, the interim manager used a tried and tested approach by defining so-called reference companies, which were assigned to the categories "Production", "Sales", "Holding" and "Special".
Training concept developed for global workshops in 41 companies
Based on this model, the interim manager developed a comprehensive training concept for global workshops in the Group's companies. The components of these workshops were the analysis of current closing processes and the development of the future reference process. In addition, the Interim Manager taught the local teams about IFRS accounting, the new reporting process including the new system landscape and qualitative reporting requirements. Numerous organizational, procedural and system-related measures were defined for (still) existing differences and assigned clear responsibilities and timelines for implementation.
In the next step, the remaining Group companies were assigned to the aforementioned categories. The interim manager developed a "self-assessment tool" to include as many companies as possible in the process and to work efficiently at the same time. The reference closing process defined with the reference companies was mapped in detail in this tool. At the same time, the group companies had the task of entering the actual closing process under the guidance of the project manager and defining measures for (still) existing time differences.
Test closings before the go-live avoid nasty surprises
To avoid any nasty surprises during the "go-live", i.e. when the quarterly financial statements were prepared with the first-time inclusion of the acquired group, two test closings were prepared in advance. The interim manager and his team provided a 24/7 hotline to support the companies with both technical and functional (IFRS) issues. Predefined CPIs (Closing Performance Indicators) along the closing timeline enabled the project team to quickly analyze the test closings and derive measures to resolve timing, technical and/or functional issues.
Integration and IFRS opening balance sheet successfully completed on time
The integration of the finance function was successfully completed within the specified period of 3 months. The IFRS opening balance sheet formed the basis for the subsequent implementation of a reporting process in line with the buyer's requirements. At the end of the project, the globally trained finance teams were able to fully meet the time and content requirements for the preparation of the financial statements. The continuous collaboration between the finance teams during the integration strengthened cohesion and was a key success factor.
Client awards follow-up mandate for another post-merger integration
The project manager and his team were permanently available to the companies and ensured compliance with uniform quality and time requirements. The client was so satisfied with the performance and commitment of the project manager that the same project team was commissioned for the post-merger integration of the next acquisition the following year.
