Management control is a key function for companies. Its mission is to analyze the business model of the company, in order to predict its profitability and to carry out corrective actions in order to optimize the overall performance of the company. You don’t have the budget to hire a management controller for your company ?
What if you take the first step by adopting the psychology of the management controller in your organization ? Management control consists, above all, in structuring one’s company into different services, creating monitoring indicators and dashboards to analyze their operation and then anticipating and optimizing their profitability.
« Earning more without selling more »
Management control is primarily used to predict the profitability of the company to optimize its operation and improve performance. By identifying the most expensive positions or those that can be reorganized to lose less money, by curbing delays in the completion of missions, by anticipating the fallout the from the various actions carried out, the company gains control of its costs, increases its profitability, without even increasing its turnover.
Management controller : a complete function
Management control has a full function in the company and it sometimes has a dedicated team, responsible for collecting data from each service and then analyzing it, correlated it with each other to highlight trends, expectations and corrective actions.
Management control is a real support for the company: it structures, analyzes, corrects and anticipates.
In detail, management control involves :
- A company structure in different departments
- An analysis of how each service works through the creation of monitoring indicators and dashboards
- Corrective actions to make your services more efficient
- An anticipation of the profitability of each service and global performance of the company
Start a management control process
The definition of management control as we have just described it can be scary, especially if you are a small company with a limited workforce and limited service. But, beyond having a full-time management controller, you always have the opportunity to infuse a financial vision into your company, a way of thinking and adopting the good reflexes of the management controller.
You can perfectly put a little touch of management control in each of your daily actions and each of your thoughts as a leader, without necessarily creating a service dedicated to this mission.
Because management control is above all a matter of anticipation, anticipation, adopt its reflexes and optimize the profitability of your company :
- Rationalize working hours by “position”: production position, networking position, accounting position, billing position etc…
Be careful not to forget the business management (billing, sending documents, payment follow-up, relaunch etc…) that must also be structured and monitored each month at the risk of having a completely disorganized cash flow and losing money.
- Use a billing software that automatically edits invoices and organizes them in chronological order on the Cloud.
- Set up a schedule to track invoices and payments, either via software or simply on Excel.
- Identify “bad payers” and anticipate delays in your cash flow forecasts.
The management controller’s challenge : priority management
Organizing the company’s trades also requires managing priorities. Differentiating the urgent from the important, identifying the key functions of the company – namely those that bring a real added value – prioritizing certain tasks, setting up a daily and weekly schedule… are the tasks of management control and optimize the company’s performance.
Controlling your payroll : an essential element in management control
If your company has one or more employees, it will be essential, as a management controller would, to control your payroll to control its cost and productivity.
Monitoring your payroll means :
- Tracking each employee’s productivity
- Tracking the individual cost : direct cost (wages, expenses and benefits granted), but also indirect cost (cost of operation of the portion : electricity, administrative supplies…)
- Identifying the turn over and net wealth created by each employee
This will allow you :
- To anticipe additional hiring periods
- To know if you are really able to hire
- To know if it is really profitable to hire or if it is better (and doable)
- To increase the productivity of one or more employees
Create monitoring indicators and dashboards to do management control in your company
To analyze your various services/missions, you will be able to create flight indicators and tracking dashboards.
To do this, don’t hesitate to use tools such as Perfactor to simplify your process, remove laborious and time-consuming tasks and eliminate the risk of miscalculation or mishandling with spreadsheet software like Excel.
Don’t hesitate to be accompanied by our Perfactor experts in this process. They will help you identify the key ratios that need to be analyzed in your dashboards, set the right goals and identify corrective actions to take to improve your performance.
In conclusion, doing management control when you are a TPE is highly recommended !
If you are not ready to put a person dedicated to this in place at the moment, adopting the reflexes of a management controller in any reflection and action, even before structuring the operation of his company, allows to better anticipate, better organize and, ultimately, optimize its profitability.