From findings to target model
A restructuring concept answers the question of what the company should look like after the crisis and how it is to get there. It starts with a target model of the restructured company: which services are offered to which customers, with which organisation and which cost base?
Only once this target picture is clear can the necessary measures be derived and evaluated. This prevents isolated cost cuts without an overall plan from weakening the operational capability of the business.
Components of the action plan
Each measure is quantified in terms of its expected effect on earnings and liquidity, assigned to a responsible person and given a deadline. The sum of the measures results in an integrated plan of earnings, balance sheet and liquidity for the coming years.
- operational measures in sales, purchasing, production and administration
- organisational measures such as clear responsibilities and reporting lines
- financial measures, agreed with the bank and the shareholders
- timetable, milestones and responsibilities
- integrated planning of the profit and loss account, balance sheet and liquidity
Distinction from a restructuring opinion under IDW S 6
In certain situations, banks and other providers of capital require a restructuring opinion under IDW S 6, the standard of the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) for restructuring concepts. Such opinions are prepared by experts qualified for this purpose, as a rule by public auditors or specialised consulting firms.
We do not prepare opinions under IDW S 6 (restructuring standard of the Institute of Public Auditors in Germany). We do, however, provide supporting work by preparing data, drawing up plans, developing measures and accompanying the management through the process. Good preparation makes the expert's work easier and can considerably streamline the process.
A concept that has backing
A restructuring concept only works if it is supported by the management, the shareholders and the most important partners. We therefore attach importance to comprehensible assumptions, realistic planning figures and a clear presentation. A concept whose calculations are too optimistic forfeits trust as soon as the first variances occur.
Frequently asked questions
Do I necessarily need an opinion under IDW S 6?
That depends on the requirements of your providers of capital and on your situation. Please clarify this with your bank and your legal advisers. We can support you from a business perspective in either case.
How detailed is the action plan?
Detailed enough that each measure is assigned to a person, a deadline and a quantified effect. Only in this way can implementation be managed later on.
What is integrated planning?
Planning in which the profit and loss account, balance sheet and liquidity are arithmetically linked with one another. Changes in one area therefore have a consistent effect on the others.