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Financial controlling plays a crucial role in addressing these challenges appropriately. It maintains profitability even in an uncertain economic environment by creating transparency and providing the basis for well-founded decisions.
A core task of financial controlling is systematically determining and regularly updating all relevant costs. This includes both direct and indirect costs, which must be precisely allocated to products. By identifying and allocating these costs, leasing companies can assess the actual profitability of their offers and make quick adjustments. This is particularly important for refinancing costs, which can change at short notice and should be checked weekly to avoid unexpected charges. Indirect costs should also be re-evaluated regularly and allocated to products according to their origin to ensure a transparent cost structure.
In addition to cost management, revenue management is a central component of financial controlling. The revenue components must be checked for feasibility not only in the preliminary calculation, but also continuously during the term. A precise analysis of past contract adjustments and bonus payments helps make realistic revenue estimates in the future and ensures that only reliable income is priced in. In addition, a differentiated pricing strategy that takes customer needs into account offers the opportunity to maximize income without risking churn.
For the purpose of comprehensive corporate management, financial controlling relies on a contribution margin scheme that structures and allocates revenues and costs from the individual transaction level to the overall level. This scheme serves as a tool for identifying profitable and loss-making business areas, allowing profitable areas to be strengthened and weaknesses to be addressed in a targeted manner. Furthermore, an income statement supplements the cash-based management system to enable accrual-based planning and promote internal acceptance of the figures. Combining these approaches ensures that new and existing business are given equal consideration and that necessary minimum profits are secured during growth phases.
This article is an abstract of our article in the German Factoring Association’s FLF magazine, issue 6/2024 (in German). Would you like to learn more on this topic?
