INTEGRATED FINANCIAL PLANNING

Why integrated financial planning?

In an increasingly dynamic economic environment, simply looking at the monthly business management evaluation (BWA) is no longer sufficient for companies to manage their finances. No precise statements can be made from the BWA as to how, for example, your company's solvency will develop. Further problems with simply looking at the BWA to manage finances exist in the assessment of your company's profitability compared to previous months. Based on the BWA, you cannot create integrated financial planning for the next few months and cannot predict how cash flow and earnings will develop. Not to mention the forecast of the development of the core data of your upcoming balance sheet.

In addition, a large proportion of medium-sized companies only have one-year profit planning (based on the annual financial statements of the previous year), sometimes supplemented by a liquidity forecast. This often leads to incorrect conclusions and measures, especially in crises such as the Covid-19 pandemic. In these times of crisis, quick alternative calculations and scenarios for unforeseen events, enriched by the key figures essential for your business model, are essential in order to be able to react to changed framework conditions as quickly as possible. With integrated financial planning, the effects on earnings and liquidity of your company become immediately apparent and you can take early action to counteract them.

How is integrated financial planning defined and what components are absolutely necessary?

starkpartners understands integrated financial planning as a closed system of the income statement and the balance sheet and liquidity statement, in which all parts logically interlock. In order to understand integrated financial planning, it is therefore essential to define three essential terms:

Profit Planning (Income Statement)

This is nothing more than a profit and loss statement, which the legislator has defined in a minimum structure in §275 HGB. The purpose of profit planning is to determine profit on a period basis. It includes sales and revenue planning, as well as planning for materials, personnel, investments, financing, interest, and other operating expenses.

Liquidity Planning

Liquidity planning involves planning for inflows and outflows of cash. Primarily, it is about the survival of the company, which is ensured when there are sufficient available funds to make payments when due. A large number of statistics show that many companies do not adequately consider liquidity in their financial planning. This leads to liquidity bottlenecks that could be avoided, but in many cases lead to insolvency.

Balance Sheet Planning

The third sub-area of integrated financial planning consists of the balance sheet with assets and liabilities. Here, too, the legislator has defined a minimum structure in §266 HGB. Integrated financial planning shows the effects of investments, inventories, working capital changes, and divestments on your company's balance sheet items.

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Advantages of integrated financial planning

The advantages of integrated financial planning are therefore obvious:

Complete Mapping of all Processes and Business Transactions in a Closed System of Income, Balance Sheet and Liquidity

Connection of Operative (Partial) Planning (E.G. Personnel, Material and Sales Planning) with each other, Enriched with Strategic Measures

Early Reaction Options to Negative Developments by Taking Countermeasures; from Reaction to Action

Creation of Planning Scenarios (Worst Case, Real Case, Best Case)

Greater Transparency for Lenders

Better Forecast of Fluctuations in Working Capital and Early Prediction of Possible Liquidity Bottlenecks

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Who is integrated financial planning suitable for?

You don't want to react only when it's already too late, do you? Do you want to keep an up-to-date and active eye on your finances and see planned measures adequately reflected at the earnings, liquidity, and balance sheet level? Do you need a suitable tool to present the performance of your company to your stakeholders (such as banks, investors or shareholders) in a transparent and targeted manner?

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Why is controlling necessary?

After the planning work has been completed, the financial plan should not end up in your company's dusty archive. Because only the timely incorporation of current actual data can ensure that you recognize negative developments at an early stage and still have sufficient time to react in the best possible way. We can also provide professional support as a strong partner in the creation of your ongoing controlling, especially in your communication with your lenders. Our efficient and pre-linked tool enables a quick integration of your chart of accounts into predefined structures and the exact mapping of your actual status of income, balance sheet and liquidity. In addition, we have a tool in which your internal performance interdependencies can be consolidated precisely and with little effort.

Our specialists

Thorsten Stark, Senior Partner

Visionary Entrepreneur with over 25 Years of Experience in Leadership, Corporate Planning, Engineering and Finance – Specializing in Transformations and Strategic Development.

Frank Jäger, Partner, Dresden office

Experienced Restructuring Expert with a Commercial Background – with a Focus on Financing, Reorganization and Company Succession in the Medium-Sized Production Environment.

Dr. iur. Johannes Marcel Offergeld, Associate Partner

Business Lawyer with a Focus on Insolvency Law and Turnaround – with Management Experience in Medical Technology, Venture Business and International Training.

Avoid costly experiments and get the right partners on your side right away

Don’t hesitate too long to contact experienced specialists, because the more serious the situation becomes with regard to your liquidity and solvency as well as other contractual obligations, the more your chances of an out-of-court restructuring dwindle.