The interim manager was repeatedly commissioned by a subsidiary of a US and later Finnish group with the gradual reorganization of the accounting system and support in special situations. In total, the financial expert took on four consecutive interim mandates.
1st interim mandate: Reorganization of internal structures for annual financial statements
The internationally active mechanical engineering company had experienced a very problematic annual financial statement preparation at the time the mandate was taken on. A large number of managers in the finance and accounting department (general ledger) had left the company. In addition, shared service functions were being set up at the same time. In addition, there were unclear corporate guidelines with extremely tight deadlines. As a result, the timely delivery of the data was on the brink of failure for a long time. There was considerable unrest within the workforce. Absences due to illness were at a high level. In order to be able to deliver the annual financial statements at all, several consultants were employed via a German consulting company to provide support in the preparation of the annual financial statements and also in normal business operations. In addition, several interim managers were used as accountants and temporary staff.
In order to remedy this situation, the company hired the interim manager. He was given the task of reorganizing the internal structures in finance and accounting. The aim was to enable the company's own employees to prepare annual financial statements largely independently. The previous consultants were to be gradually replaced.
Departments in finance and accounting reorganized
When analysing the departmental structures, the interim manager noticed that many activities in the area of subledgers were not being processed in the relevant departments where they are usually located. The interim manager integrated the affected processes into the relevant areas and initiated the necessary adjustments to staffing levels.
Employees empowered for more highly qualified activities
In addition, the interim manager convinced and empowered the general ledger employees to get involved in new processes. He transferred employees with promising working methods from the subledger to the general ledger and gave them the opportunity to gain further qualifications here.
Monthly US GAAP financial statements submitted on time
Reorganization and position changes led to a significant boost in motivation. As a result, the interim manager and team were now able to ensure that the monthly US GAAP financial statements were delivered in high quality and on time.
At the end of this mandate, the interim manager was able to hand over the division to the new finance director in a stable condition before the end of the year.
2. Interim mandate: Adjustments to reporting after company takeover
At the beginning of 2017, the company was taken over by a Finnish group. As a result, the reporting system had to be converted from US GAAP to IFRS within a very short period of time and an opening balance sheet had to be prepared. For tax reasons, a short financial year was inserted as at 31.03.2017 and another as at 31.12.2017. This made it possible to return to the usual calendar year. The financial statements as at 31.03.2017 were prepared by a consulting firm. The new finance director needed support during this phase because she had not been with the company long enough for these varied and complex tasks. The interim manager was therefore reappointed as a financial expert familiar with the subject matter.
Hyperion system introduced and converted to IFRS
The new Hyperion system was introduced and the reporting processes aligned in close cooperation with the Finnish colleagues. Existing valuation differences between the old US GAAP and the new IFRS were identified and adjusted. The reporting deadlines were not significantly different. This made the changeover easier. In addition, there were significant simplifications for intra-quarterly financial statements. This in turn took the pressure of deadlines off the departments.
Quarterly report completed on time and in high quality despite extreme complexity
The quarterly report for the first quarter was completed on time and in high quality despite extreme complexity. Thanks to good cooperation with the external consultant, the financial statements for the short financial year were prepared and submitted to the new auditors for review. Preparations were then made for the forthcoming supervisory board meeting with the management. In the course of this work, the interim manager suggested to the management that the preparation of the financial statements under commercial law should be transferred back to the company in order to create greater transparency.
The group's internal control system was introduced in accordance with the guidelines for the finance department and the necessary responsibilities were redefined.
3rd interim mandate: Implementation of the LucaNet reporting and consolidation tool
After the successful takeover by the Finnish group, the company once again engaged the interim manager to optimize the preparation of the annual financial statements. Previously, the preparation of the annual financial statements had been extremely complex, time-consuming and non-transparent. For example, data from four different SAP systems was merged. To make this process more efficient, the interim manager suggested using a database-supported tool.
Data for annual financial statements successfully merged
In December 2017, the go-ahead was given to implement the LucaNet reporting and consolidation tool. The system was intended to combine all data from the four SAP systems on one platform to speed up and increase the transparency of the annual financial statements in accordance with the German Commercial Code (HGB). The first step was to customize the organizational elements, followed by account mapping to the balance sheet and income statement structure. The HGB financial statements for the first short financial year were then reproduced in order to have correct comparative figures. Typical Excel errors no longer occurred, and the HGB financial statements as at 31.12.2017 were prepared on time. Costs of around 80,000 euros were saved. The company's auditors were highly satisfied with the audit.
4. Interim mandate: relocation of subledger accounting to Eastern Europe
The finance director left the company again in mid-2018. At the time, the company was in the middle of a project to relocate subledger accounting (accounts receivable, accounts payable, banking, asset accounting, travel expenses) to a shared service center in Eastern Europe. In addition, preparations were being made to spin off two business units to another company. The project manager of the relocation asked the interim manager to temporarily take over the vacant position of finance director. At the same time, the interim manager searched for a suitable successor and supported the reorganization of the division.
The outsourcing process and the departure of the division manager had caused great unrest in the finance and accounting department. The interim manager calmed the situation by holding intensive discussions with the company's own employees and colleagues in Eastern Europe. Fair offers were made to the employees affected by the job cuts.
At the instigation of the interim manager, the concept for the asset accounting department was reconsidered. For organizational reasons, one and a half jobs (of the original three) in Asset Accounting were left in Germany. The last employees left in December 2018. Since then, the activities have been carried out in the shared service center in Eastern Europe.
The interim manager was also involved in a retroactive spin-off of one of the two divisions. To this end, an opening balance sheet had to be prepared for the company to be spun off as at January 1, 2018. At the same time, it had to be ensured that the annual financial statements of both companies under commercial law could be prepared without any problems. As all divisions had their own SAP company codes, a solution was found relatively easily using the LucaNet software. The 2018 annual financial statements of the transferring company were completed in March 2019. The annual financial statements of the absorbing company were completed in April 2019.
In July 2018, the interim manager worked with the project manager to develop a new concept for the future structure of accounting in Germany. This concept envisages hiring two accounting team managers for the companies to be managed instead of a finance director. The company agreed to this and commissioned the interim manager to draw up an appropriate profile and then start the search with a recruitment consultancy. This search began in August. The first candidate started in October and the second in early 2019. The training by the interim manager was quick and successful because both candidates brought a wealth of experience with them.
Result of the overall project
The company's accounting department has now been restructured with experienced managers. Many work processes have been set up much more efficiently. The team is highly motivated and can tackle the diverse tasks (including harmonizing the SAP systems to a uniform Group standard) in a targeted manner. In addition, the current employee structure is geared towards being able to offer flexible solutions for upcoming structural adjustments.
