The Corona pandemic has shown one thing: Solid and flexible financial planning is essential for CFOs to be able to react to unforeseen events as quickly as possible. Accordingly, from an expert point of view, such as that of Dr. Maximilian Pluta, Managing Director of PLUTA Rechtsanwalts GmbH and PLUTA Management GmbH, it is mandatory to bring the planning process forward before the usual autumn cycle.

Many companies are still dependent on state aid measures in May 2021, as the Corona pandemic has had significant negative effects on the German economy and its companies. Despite state support, for example in the form of subsidized loans or short-time work benefits, the companies, according to the opinion of many CFOs, are still in crisis or “transition mode”. Especially for such companies, budget planning for the further financial years should be prepared before the usual cycle in autumn.

Ideally, the CFOs of the companies should set up their integrated financial planning for the years 2022-2024 before the upcoming summer break, but at the latest when the semi-annual financial data is available, in order to be able to quantify the negative effects of the Corona pandemic on the coming financial years at an early stage.

The importance of preparing integrated financial planning in a timely manner is particularly important for companies that have currently registered for short-time work. When this state support measure expires at the end of 2021, the personnel expenses of these companies will suddenly and significantly increase. This makes timely planning and early identification of countermeasures in the personnel area necessary. Experience has shown that the implementation of such measures requires sufficient time to, for example, structure negotiations with employee representatives and develop solutions that are socially acceptable. According to Dr. Pluta’s experience, an adequate analysis, comprehensive planning and the implementation of these measures takes an average of three to six months. If the company continues to generate less revenue, it will soon slip into a deficit situation if no measures are taken early on.

It makes sense to plan in different scenarios (best and worst-case scenarios) and to develop the planning premises for the years 2023 and 2024. Setting up different scenarios makes sense, as market developments are currently difficult to predict. In this way, different capacity requirements can be created for different premises and compared with each other: How large should the workforce be for the coming years? Which investments are absolutely necessary and which can be postponed?

In the undesirable event that business development is more negative than planned, CFOs should have a plan B in their pocket. If it becomes clear that business development will not be positive in the future and insolvency occurs, the entrepreneur should file for insolvency at an early stage in order to avoid personal liability. An early disposition is all the more necessary for this.

The examples listed above illustrate, especially in times of the Corona pandemic, that early planning creates the best conditions for a successful restructuring.

We – the team of starkpartners – will be happy to advise you! You can reach us by phone at 02150 7058 210, by e-mail at office@starkpartners.de or on the web at www.starkpartners.de

We know the right adjusting screws and methods for creating your meaningful, integrated financial planning. We would be happy to assist you with a personal, discreet exchange!

Article from Finance Magazine dated April 28, 2021

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