What is controlling?
Controlling is a forward looking system, which can save money: you can identify sources of loss and highlight the unused sources.
Accounting systems are showing you the history, how performing you were in the past, while controlling it is showing you the future and how performing you want to be.
The entrepreneur does not know during the year if he is selling with profit or on loss. This information is obtained and the end of the year based on financial statements.
What benefits will bring me the controlling system:
- The possibility of the permanent comparison between actual and plan, comparison that I can perform frequency whenever I consider necessary (monthly, weekly, even daily if needed);
- Costs computation per cost centers;
- Harmonized financial budgeting with production plans (top down or bottom up, pending on company specificity and pending on internal policies);
- The possibility of knowing the profitability of each product/ category of products, so if you go for negotiations you will know the product costs and you will be able to negotiate being aware about the costs.
Controlling means order!
Controlling assumes management involvement by allocating resources.
There is no only one controlling system which will be optimum in the same way for all the companies. A controlling system should be adapted to each company pending on its specific factors.