Starting controlling SMEs: 5 easy steps to success

Controlling made easy: 5 steps to a better overview of your finances

Shahnawaz Mian

September 29, 2025

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7 Min. Lesezeit

Have you been putting off the topic of controlling for months? You're not alone in that. Many medium-sized entrepreneurs have the same problem: They know that they need more control over their figures, but controlling seems too complex, too expensive and too time-consuming. The truth is: This hurdle costs you money and nerves every day. Four out of five insolvencies in German SMEs are caused by a lack of or inadequate controlling^[4]. This means that 80 percent of all company bankruptcies could have been avoided through better financial management.

The reason why so many SMEs shy away from controlling is not due to a lack of will. It is the fear of complexity. You might be thinking of complex ERP systems, expensive consulting, or week-long implementations. But that is a myth. You can start professional controlling with simple means and expand it step by step. You don't have to become a financial expert — you just need to get started.

In this guide, we'll show you a practical 5-step way to instantly get a better overview of your finances. Each step builds on the previous one, doesn't overwhelm you and quickly provides visible results. After reading this, you will understand: Controlling is not a Big Bang project, but a process. And that process starts today.

Why SMEs postpone controlling and how much it costs them

The reasons for the controlling blockage are usually the same: “Too complicated, too expensive, no time.” This perception is understandable, but it costs you more than you think. Without clear figures, you're navigating your company blindly. You only notice problems when they are already threatening your existence. Liquidity bottlenecks arise gradually, unprofitable customers eat up resources for months and incorrect investments tie up capital in the wrong place.

Another problem: Most SMEs rely exclusively on their tax advisor or work with Excel spreadsheets. However, the tax advisor understandably focuses on compliance and accounting, not on predictive management. Studies also show that 94 percent of all business Excel spreadsheets contain errors^[3]. This error rate is an enormous risk for business decisions.

“Controlling doesn't have to be complicated — just a few key figures give you a clearer picture.” — Managing Director of a trading company

The good news: Modern controlling approaches are no longer the cumbersome systems of the past. You can start with simple tools and still get professional results. The key is to proceed in a structured manner and not to overwhelm yourself. The following five steps will systematically lead you to greater financial transparency without having to neglect your day-to-day business.

Step 1: Collect and organize data

The first step is simple but crucial: Get access to your current financial data. The most important document is your business evaluation (BWA). If you don't receive a regular BWA, talk to your tax advisor immediately. This evaluation is your data basis for everything else. Professional controlling is impossible without a current BWA.

Make sure that your bookkeeping is timely and complete. Many entrepreneurs underestimate how outdated data worsens their decisions. A BWA from the previous month won't help you with current problems. Aim to have your figures a maximum of four weeks after the end of the month. This is a realistic goal that even smaller tax consulting firms can achieve.

In addition, collect all relevant data sources: bank statements for the liquidity overview, customer lists for turnover analysis and cost center statements for detailed expenditure analyses. Create a simple file structure on your computer or in the cloud, where you systematically store all this information. Organization saves you a lot of time later and prevents important data from being lost.

A handy tip: Keep a simple financial journal for critical events. Note down large incoming payments, unexpected expenses, or important contracts. This qualitative information will later help you interpret your figures and identify trends and patterns.

Step 2: Define the first key figures

Less is more — this principle applies particularly when starting out in controlling. Focus on four basic indicators that give you an immediate overview: liquidity, revenue development, gross margin and monthly fixed costs. These four KPIs already give you a solid foundation for financial decisions.

Liquidity is your most important indicator — without cash, every company dies. Calculate your current cash balance plus available credit lines minus liabilities due in the next 30 days. This simple calculation shows you whether you're having short-term payment problems. Carry out this calculation weekly, even daily in critical phases.

It is best to monitor sales development over three months. A single bad month isn't a trend yet, but three consecutive declines should alert you. Calculate not only the absolute figures, but also the percentage change compared to the same month of the previous year. This is how you recognize seasonal fluctuations and real trends.

The gross margin (revenue minus direct costs) shows you the profitability of your core business. A falling gross margin indicates pricing problems, rising purchase prices or inefficient processes. Follow this key figure on a monthly basis and set it in relation to industry benchmarks. Your monthly fixed costs give you the break-even point: From which turnover do you work profitably?

Step 3: Introduce reporting rhythm

Regularity beats perfection — that is the secret to the success of sustainable controlling. Instead of doing a perfect analysis once a year, you should create simple reports monthly. This routine is more important than the technical sophistication of your evaluations. Set a fixed date in your calendar, for example every first Monday of the month, and stick to this appointment consistently.

Your first monthly report doesn't have to be complicated. A one-page overview with your four basic key figures is completely sufficient. Add brief comments to the figures: Why did sales increase? Which costs are unusually high? What are the biggest risks for the coming month? This qualitative classification makes your numbers a story and helps you make future decisions.

If you have a team, involve the relevant employees in the reporting process. The sales manager can provide sales forecasts, the purchasing department can report on cost developments. But don't overdo it: too many chefs spoil the porridge. Start with a simple system and gradually expand it as it runs smoothly.

A practical tip: Use simple visualizations such as bar charts or line curves. Charts make trends immediately visible and are particularly useful when you're discussing your figures with partners or advisors. But don't forget: The best graphics are useless if the underlying data is incorrect.

Step 4: Set up plan/actual comparisons

Plan/actual comparisons are at the heart of professional controlling. They not only show you where you stand, but also whether you're achieving your goals. Start with a simple annual plan for your most important key figures. You don't need a detailed monthly plan — quarterly figures are enough to get you started.

Your planning should be realistic but ambitious. Take a look at the development of the last three years and take into account known changes: new customers, lost orders, price increases or investments. Don't forget the seasonal fluctuations in your industry. An ice cream parlour plans differently than a heating installer.

Create a simple table with planned and actual values as well as the variance. Important: Don't treat negative deviations as a failure, but as a learning opportunity. Ask yourself: Was the planning unrealistic or did unforeseen events occur? What can you learn from the deviation for the future?

Planned/actual comparisons work best if you update them regularly. You should adjust your annual forecast after the third quarter at the latest. Rolling forecasts — i.e. moving forecasts — help you react early to deviations and initiate countermeasures in good time. You can find further insights into professional controlling and its significance for corporate security in our article about Controlling SMEs to avoid insolvency.

Step 5: Play through initial scenarios

Scenario analyses sound complicated, but are essentially simple what-if calculations. What happens if sales fall by 10 percent? How long does liquidity last if a major customer disappears? How does profitability change if material costs rise by 15 percent? Thinking through these questions before they occur gives you a huge advantage.

Start with three standard scenarios: Best Case (everything goes better than planned), Realistic Case (planning is achieved) and Worst Case (sales fall by 20 percent). For each scenario, you calculate the effects on liquidity, profit and any necessary measures. It won't take long, but the findings are valuable.

Liquidity scenarios are particularly important. Calculate how various payment delays affect your cash flow. What happens if customers pay ten days later on average? How does your liquidity change if you have to pay suppliers earlier? These invoices help you with credit negotiations and give you security in uncertain times.

A practical approach: Create action plans for your scenarios. What do you do when scenario A happens? Which costs can you reduce quickly? Which customers should you serve more intensively? This preparation saves you valuable time during a crisis and enables you to make well-thought-out decisions instead of panic.

Don't forget to update your scenarios regularly. What was realistic a year ago may be outdated today. New competitors, changing market conditions, or regulatory changes affect your business risks. Keep your scenarios up to date and regularly consider new developments.

From Excel to professional tools: The next step

Once you've successfully completed the first five steps, you'll quickly notice the limits of Excel. Error-prone manual entries, time-consuming updates, and a lack of team spirit slow you down. Modern controlling software solves these problems and makes financial management an efficient process instead of an arduous task.

Professional tools offer automatic data imports, integrated planning functions, and meaningful dashboards. Instead of spending hours collecting data, you focus on interpretation and strategic decisions. Many modern solutions are developed specifically for SMEs and require no IT expertise or complex implementation.

A particular advantage of current software: AI-based analyses and forecasts. Algorithms recognize patterns in your data that you would manually overlook. They warn of liquidity bottlenecks, identify profitable customer segments and create precise forecasts. What used to require financial experts and expensive advice is done by intelligent software. If you're interested in how secure AI-based financial tools really are, read our detailed article Data security in AI controlling.

Switching to professional tools isn't an all-or-nothing decision. Many providers make a smooth transition possible: You keep your tried and tested processes and gradually expand them with new features. Cloud-based solutions often start at just a few euros per month and grow with your requirements.

Continuously improve your controlling system

Controlling is not a one-off project, but a continuous improvement process. Regularly question your key figures: Are they still relevant to your business? Are there new KPIs that have become more important? Adapt your system to changing terms and conditions and add new features if they offer real added value.

Pay attention to the right balance: Not every available key figure is also useful. Too many numbers confuse more than they help. Focus on the metrics that have a direct impact on your business decisions. A well-maintained handful of relevant KPIs is more valuable than a messy dashboard with dozens of graphics.

Document your experiences and learnings. What worked? Which forecasts were accurate, which were off? This reflection not only improves your analytical skills but also makes you a better entrepreneur. Controlling ultimately means: deriving better future decisions from past data.

Don't forget the human factor: Involve your team in the controlling process, but don't overwhelm anyone with systems that are too complex. The best technology is useless if it is not used consistently. Provide training and create a culture of number orientation in your company.

The path to professional controlling starts today

You now have a clear roadmap for getting started in controlling. The five steps — collecting data, defining key figures, establishing reporting rhythm, drawing up plan/actual comparisons and running through scenarios — are deliberately kept simple. You can start right away and see the first results after just a few weeks.

Remember: Four out of five insolvencies can be avoided through better controlling^[4]. These statistics should motivate you, not intimidate you. Using the methods from this guide, you'll be one of the 20 percent who have their finances under control. You make better decisions, identify problems earlier and use opportunities more consistently.

The most important step is the first. Perfection comes later — routine is more important. Start this week by collecting your data and defining your first metrics. After just one month, you'll notice how your understanding of your company's figures has changed.

Finokapi was developed to make it easier to get started. Our software makes controlling as easy as possible without sacrificing professional functions. Even beginners without a financial background can start at expert level thanks to an intuitive interface and AI-supported support. This makes the journey from the first Excel spreadsheets to a professional controlling system smooth and without overwhelming demands.