INTEGRATED FINANCIAL PLANNING
Basis for successful procedures
An individual liquidity cockpit puts you on the safe side to make good decisions
Our many years of experience have shown that almost every company has developed its own tools and processes to create rolling business and financial planning. Furthermore, it can be seen that the degree of professionalism and significance of such documents is very heterogeneous. While some companies with a high level of controlling detail have a relatively accurate overview of their performance, liquidity and liabilities, an alarming number of companies still drive “blind” through many a dangerous situation. Accordingly, the results of coordination with banks, consultants and possibly frustrated creditors are sobering.
01
DEFINITION
Lega ldefinition
According to the legal definition of section 17 (2) sentence 1 InsO, a debtor is insolvent if he is not able to meet his due payment obligations. Insolvency is generally assumed if the debtor has stopped payments and/or the cover ratio of the due and demanded liabilities is less than 90% (BGH, judgement of 24.05.2005 – IX ZR 123/04 – ZinsO 2005, 807 ff). This applies regardless of the legal form of the operating company and has a penetrating effect on the owner/managing director of the sole proprietorship or the (shareholder) managing director of the partnership or corporation.
02
DEGREE OF COVERAGE
In other words: if the above-mentioned requirement for the cover ratio of assets that can be liquidated promptly is under-fulfilled compared to the liabilities due, there is a reason for insolvency which, in contrast to the balance sheet reason for insolvency in the case of corporations, cannot be cured by a positive continuation prognosis, but only by restoring the cover ratio of solvency to at least 90%.
03
LIQUIDITY
Controlling tools provided specifically for the purpose of financial planning and control, often as part of financial accounting programs, are not only expensive, but also only partially adapted to the needs of medium-sized commercial enterprises. Due to the periodic posting run in many companies, they often reflect only a more or less near past and not the current reporting date.
04
DATABASE
The right strategy for success
The data basis for this are the daily available, triggered orders, incoming and outgoing invoices, continuing obligations and document information from your company. Their complete recording is of outstanding importance for all statements on the liquidity situation and does not even require much effort for smaller companies with disciplined daily recording. For larger companies, a direct software connection to the respective ERP or accounting system is recommended.
