Financial Management - Foundation for Data-Driven Decision Making in SMEs

From Basic Reporting to Strategic Financial Management

SME companies have ERP systems. They have accounting. They have numbers.

But do they have real understanding of their business?

Problem We Solve

Typical situation in SMEs:

Management has access to basic statements from ERP. Income, expenses, gross margin. Once monthly after closing comes Excel with consolidation. Accountant prepares annual closing.

But real questions remain unanswered:

• What is the actual structure of our revenues? Which revenue streams are most important?
• How do our operating expenses look in detail? Where is room for optimization?
• Which cost centers are efficient and which consume resources without adequate return?
• How do our receivables look? Do we have problem with customer payment discipline?
• What is our cash conversion cycle? Where do we tie working capital?
• How are trends developing in real-time, not just after monthly closing?

ERP system has data. But understanding is missing.

What is Financial Management?

Not just another dashboard. Comprehensive financial management system.

Financial Management is not a reporting tool that takes numbers from ERP and displays them in nice charts.

It’s a comprehensive financial management system that provides:

1. Full Financial Statements quality - monthly or real-time

Not once a year. Every month. Or in real-time.

We prepare complete three-statement financials in annual closing quality:

• Profit & Loss Statement with detailed revenue and cost structure
• Balance Sheet with complete disclosure of assets, liabilities and equity
• Cash Flow Statement with breakdown into operating, investing and financing activities
• Notes to financial statements - detail as in annual report

Why this quality?

Because strategic decisions require detail you find in full financial statements:

• Working capital movements and their impact on cash flow
• Fixed vs. variable cost structure
• Asset utilization and depreciation patterns
• Proper accruals and deferrals treatment
• Complete financial position, not just high-level numbers

SMEs above €500K revenue need this level of detail for quality management. Not once a year. Monthly or real-time.

2. Management Reporting Structure

We build reporting infrastructure that works.

Before you start analyzing, you need proper structure:

• Chart of accounts mapping: Detailed mapping of accounts and transaction codes into reporting structure
• Cost center setup: Setting up cost centers for tracking costs by departments, projects or locations
• Profit center tracking: Identification of profit centers and their performance
• Product structure: Segmentation by product lines or services
• Multi-dimensional analysis: Assignment of dimensions for flexible analysis from different perspectives

This is not technical matter. This is strategic work that determines how you understand your business.

3. Revenue Structure Analysis

Understanding where your revenues really come from.

Not just one line “Revenues” in P&L. But detailed analysis:

• Revenue streams breakdown: Which revenue sources are most significant?
• Sales segmentation: Online vs. offline? Direct vs. distribution? Domestic vs. export?
• Product/service analysis: Which product lines or services generate main part of revenues?
• Customer segmentation: B2B vs. B2C? Large clients vs. retail customers?
• Trend analysis: How do individual revenue streams develop over time?

Result? Management knows which business areas really drive results and where to invest resources.

4. OpEx & Overhead Expenses Detail

Detailed understanding of cost structure.

Operating expenses are not one line in P&L. You need to see structure:

• Cost center breakdown: How much does each department really cost? Marketing, sales, operations, admin?
• Fixed vs. variable costs: What part of costs is fixed and what variable? Where do you have flexibility?
• Overhead allocation: How are overhead costs distributed? Which activities really consume resources?
• Expense categories detail: Personnel costs, rent, utilities, travel, professional services - all in detail
• Cost efficiency metrics: Cost per revenue unit, cost per employee, operating leverage

Result? Identification of optimization opportunities and better cost management decisions.

5. Working Capital Management

Receivables, payables and cash conversion cycle.

Cash flow is not just P&L result. It’s working capital management:

• Receivables aging analysis: How much receivables do you have? How old are they? Which customers pay on time and which don’t?
• Credit risk monitoring: Identification of clients with problematic payment discipline
• Payables aging tracking: Your liabilities to suppliers. Are you using payment terms efficiently?
• Cash conversion cycle: How long does it take for investment in inventory and receivables to return as cash?
• Working capital optimization: Where are you tying capital inefficiently?

Result? Better cash flow management and capital release for growth.

6. Profitability Analysis

Not just revenue. But real profitability.

• Margin analysis at product and service level
• Profitability by cost centers and profit centers
• Contribution margin vs. full-cost profitability
• Identification of profit drivers and loss leaders

Result? Decisions based on profitability, not just volume.

Why Full Financial Statements Quality?

Because understanding business requires detail.

Many BI tools display high-level numbers. Revenues, costs, EBITDA. That’s good start.

But strategic decisions require detail:

You need to know:

• Not just “we have receivables €200K” but “€80K of that is more than 90 days overdue from 3 specific clients”
• Not just “overhead costs €50K/month” but “admin €15K, facility €12K, IT €8K with trending 15% YoY growth”
• Not just “cash flow €30K” but “operating cash flow €50K minus investing €15K minus financing €5K”

This detail exists in accounting. Financial Management makes it accessible for management - monthly or real-time, not once a year.

Who Is This For?

SME companies that take financial management seriously.

Typically:

• SMEs from €500K+ revenue
• Companies with more complex structure (multiple revenue streams, cost centers, product lines)
• Companies planning expansion and needing systematic financial management
• Management teams that make strategic decisions and need data-driven foundation

Not for:

• Very small companies with simple business model where Excel reporting from ERP suffices
• Companies looking for just nice dashboards without need for strategic depth
• Companies without clear need for regular financial analysis

How Does It Work in Practice?

Example: Manufacturing & distribution company

Company with €3M revenue, 30 employees, combination of manufacturing and distribution.

Before implementation:

• Basic P&L from ERP once monthly
• Excel spreadsheets for receivables analysis
• Manual cost center performance calculations
• Annual closing from accountant
• Strategic decisions based on intuition and high-level numbers

After Financial Management implementation:

• Monthly three-statement financials in annual report quality
• Automatic receivables aging analysis - identified 3 problematic clients (€45K overdue 90+ days)
• Detailed cost center tracking - found that admin overhead growing 20% YoY without adequate reason
• Revenue structure analysis - discovered that distribution channel has higher margin than expected
• Working capital optimization - reduced cash conversion cycle by 15 days

Real impact:

• €45K released from problematic receivables after activating collection process
• €8K/month savings from admin overhead optimization
• Strategic shift to higher-margin distribution channel
• Management decision-making based on facts, not assumptions

Why Does It Work?

Because we first used it in our own CFO advisory projects.

Financial Management is not theoretical concept. It’s a system we developed over years of CFO advisory work with dozens of SME clients.

We know exactly:

• What questions management needs to answer
• What detail is needed for strategic decisions
• How to build reporting structure that scales with company growth
• Where typical pain points are in SME financial management

We can say exactly:

• Where you save time (reporting automation instead of monthly spreadsheets)
• Where you gain precision (full financial statements detail monthly or real-time)
• Where you get value (strategic insights from proper financial analysis)

No promises. Just proven approach from years of CFO advisory work.

Client Deployment

Every our client starts with Financial Management.

Implementation process:

1. Discovery: Understanding your accounting structure, ERP system, business model
2. Mapping: Chart of accounts mapping, cost center setup, analysis dimensions
3. Integration: Connection with ERP system, automated data extraction
4. Reporting structure: Building three-statement financials and management reporting
5. Analysis layers: Revenue structure, OpEx detail, working capital metrics
6. Go-live: Monthly or real-time financial management

Typically 4-6 weeks from kickoff to first monthly closing in new structure.

Want to Know More?

If you’re SME company above €500K revenue and need systematic financial management, let’s talk.

Contact: contact@onetribe.sk | onetribe.sk

This article is part of our Use Cases series, where we present real solutions for various industries and business challenges.