SMEs can only survive in the long term if sufficient profit is generated to develop, to use modern infrastructure and to be attractive to customers, employees and successors. If the SME becomes a bit more complex, cost accounting will help you to achieve the set goals and to operate where profits can be generated.

Content Produktion AG (name changed) is a typical medium-sized production company with 50 employees - relatively asset-intensive and well financed. The company had full order books in earlier years, but profits were rather low with a return on sales of 1 - 3%. There were also major investments to be done in buildings and in the machinery. After the company passed from the senior director to the junior, we were allowed to accompany him to implement a cost accounting and reporting system.

The goals of the cost accounting were:

• The cost accounting should show that the personnel and machine cost rates used correspond to the effective costs.
• Although various employees work in different departments, the result per department should be presented and the department heads should be compensated on the basis of the result.
• The equity capital interest should also be presented as costs, so that the equity capital is also sufficiently interest-bearing.
• Machine, EDP and room costs are to be allocated transparently and in a simple manner to the products or departments. The post-calculation of the products and orders should lead to an adjustment of the offer.
• A reporting should quarterly indicate, how the results of the two departments are developing. In addition, the reporting should also show other key figures that are important for the company and which are defined in advance.

We were allowed to accompany Content Produktions AG in the modification of the accounting system and supported the implementation of the cost accounting as well as the reporting. Five years later, we can look back in satisfaction. Most of the department managers had achieved the goal of generating a 6% return on sales with their departments. The costs already included imputed depreciation and interest. The profitability of the company was massively improved. The cost transparency led to orders being offered differently and to a more conscious orientation towards the market. The first investment projects could now already be initiated, since sufficient cash flow had been achieved and the credit rating with the banks could be massively improved.

Cost accounting and reporting are key competences of André Hegglin. We are happy to support you to bring your company to the next level.

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