Financial advice for companies: The biggest challenges

The Swiss economic landscape is characterized by dynamism and change. In this environment, companies of all sizes are faced with the task of optimally managing and deploying their financial resources. However, the demands placed on professional financial management have increased significantly in recent years. Regulatory requirements are becoming more complex, digital technologies are changing business processes and international competition is increasing.

Although many Swiss companies have excellent products and services, they fail to overcome financial hurdles – often due to a lack of strategic financial planning.

The most important facts at a glance

• Liquidity bottlenecks are the most common financial challenge for Swiss companies – professional treasury planning is essential
• The complexity of accounting standards such as Swiss GAAP FER requires specialized expertise
• Company-specific financial advice differs significantly depending on the size and development phase of the company
• Digitalization of financial processes offers considerable efficiency potential, but also poses an implementation challenge
• Choosing the right financial advisor should be based on industry expertise and an understanding of the company’s individual needs

Liquidity management as a foundation

Sufficient availability of liquidity is the foundation of any successful company management. Unlike strategic planning errors, which often only have an impact in the long term, liquidity bottlenecks can put a company in existential distress within a very short space of time.

For small and medium-sized companies in Switzerland, unexpected market fluctuations or payment delays can lead to critical situations particularly quickly.

Challenges in treasury and financial risk management are particularly evident in volatile market phases. Accurate forecasting of cash flows is made more difficult by external factors such as currency fluctuations, changes in interest rate policy and fluctuating commodity prices. Many SMEs in Switzerland also underestimate the importance of professional receivables management.

Effective liquidity management requires the establishment of transparent controlling systems. These must recognize warning signals at an early stage and show scope for action. Please note

• Daily monitoring of payment flows
• Establish a rolling 13-week plan for short-term liquidity
• Regular stress tests for various market scenarios
• Build up sufficient liquidity reserves in line with the company’s risks

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Controlling and accounting as management tools

The demands on controlling and accounting in Swiss companies have increased significantly. The finance department is evolving from a purely internal service provider into a strategic partner for management. It provides decision-relevant information and supports corporate management with meaningful key figures.

Prompt controlling enables preventive action. However, there is often a lack of the necessary database or standardized processes to establish an efficient controlling system. Many companies also struggle with silo structures in which financial information is viewed in isolation instead of being analyzed holistically.

The integration of operational and strategic planning poses a particular challenge. While operational controlling provides short-term management impulses, these must be harmonized with the company’s long-term goals. Well thought-out management accounting therefore takes both time horizons into account and ensures that tactical decisions support the strategic orientation.

Modern controlling approaches include

• The development of an integrated planning landscape
• The definition of company-specific key performance indicators (KPIs)
• The implementation of a systematic reporting system
• Establishing leading indicators instead of just looking at the past

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Accounting and accounting standards

Choosing the right accounting standard is a fundamental challenge for many Swiss companies. Depending on the size of the company, industry and international orientation, different standards may be appropriate. While the Swiss Code of Obligations (CO) defines minimum requirements, Swiss GAAP FER and IFRS offer more comprehensive sets of rules, which are, however, more complex.

Swiss GAAP FER has established itself for medium-sized companies as it represents a good compromise between transparency and cost. The standard is continuously being developed and adapted to current requirements. However, the changeover from CO to Swiss GAAP FER requires careful planning and often external support.

Compliance with regulatory requirements is becoming increasingly complex. In addition to the accounting standards, further regulations must be observed, for example in the area of financial market supervision or industry-specific regulations. Integrating these requirements into existing processes and IT systems is particularly challenging.

The practical challenges include

• The correct valuation of assets and liabilities
• The appropriate mapping of complex business transactions
• Compliance with disclosure obligations
• The integration of sustainability aspects into reporting

Digitalization of financial processes

The digital transformation is fundamentally changing the finance function. Modern technologies offer the opportunity to automate routine tasks, improve data quality and accelerate decision-making processes. However, Swiss companies face considerable challenges when implementing digital solutions.

Business intelligence and analytics solutions provide deeper insights into financial performance. However, this requires a consistent database and clearly defined processes. Many companies struggle with data silos and inconsistent definitions, which limits the informative value of analyses.

The automation of financial processes through robotic process automation (RPA) and artificial intelligence offers considerable efficiency potential. However, the use of these technologies requires a thorough process analysis and often also a redesign of existing processes. This is particularly challenging in established structures.

Successful digitalization projects in the financial sector are characterized by

• A clear strategy with defined goals and priorities
• The early involvement of specialist departments
• A step-by-step implementation approach with rapid successes
• Continuous training and development of employees

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Company type-specific challenges

The requirements of the finance function vary considerably depending on the type of company and its development phase. Tailor-made financial advice takes these specific needs into account.

Start-ups and growth companies

Young companies face particular financing challenges. Access to capital is often limited, while at the same time there is a high need for investment. Establishing solid financial planning is crucial in order to convince investors and control the burn rate.

Swiss start-ups need to establish professional financial management at an early stage. While product development often takes center stage in the initial phase, meaningful financial information and planning are expected during financing rounds. In addition to the actual procurement of capital, the valuation of the company and negotiations with investors also pose particular challenges.

SMEs and medium-sized companies

For established SMEs, the challenge often lies in the balance between day-to-day operations and strategic financial planning. Many SMEs in Switzerland have a solid equity base, but do not exploit all the potential for optimizing their capital structure.

Succession planning poses a particular financial challenge. Timely preparation for company succession, be it within the family or through external buyers, requires careful planning and often also a reorganization of financial structures. Tax aspects play a key role in this.

Large companies and groups

Larger companies face the challenge of managing complex financial structures efficiently. The integration of different business areas, possibly with different ERP systems and processes, requires well thought-out financial management.

The international orientation of many large Swiss companies brings additional complexity. Currency risks, different regulatory requirements and tax aspects must be taken into account. Harmonizing financial processes across national borders is often a lengthy and challenging undertaking.

Financial consulting options for companies

When choosing the right financial advisor, there are various options to choose from. Each has its specific advantages and disadvantages, which must be assessed differently depending on the individual company situation.

Independent financial advisors offer a neutral perspective without conflicts of interest. They are not tied to specific products and can develop tailor-made solutions. Personal support from an independent advisor with a deep understanding of the industry is particularly valuable for medium-sized companies.

Banks and financial institutions have extensive expertise in the area of financing and the capital market. They can make it easier for companies to access various financing instruments. However, there is a risk that advice will be influenced by product interests.

Specialized consulting companies focus on specific sectors or subject areas and bring with them a corresponding depth of expertise. They can contribute best practices from comparable companies and address specific problems.

In addition to traditional auditing,auditing companies also offer comprehensive consulting services. Their advantage lies in their holistic approach to accounting, controlling and tax aspects. For listed companies, however, independence requirements can restrict simultaneous auditing and consulting.

Digital advisory platforms and FinTech solutions are also becoming increasingly important in Switzerland. They offer standardized solutions at attractive conditions, but cannot completely replace individual support from personal advisors.

You should take this into account when choosing a financial advisor:

• The specific industry expertise and references
• An understanding of your company’s situation and goals
• Independence and potential conflicts of interest
• The methodological competence and technological equipment
• Personal chemistry and communication culture

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Frequently asked questions

Conclusion and outlook

The financial management of companies in Switzerland faces a variety of challenges. Liquidity management, professional controlling, complex accounting standards and the digitalization of financial processes require specialized know-how and a strategic approach. Depending on the type of company – from start-ups to large corporations – there are specific requirements for the finance function.

External financial consulting can make a significant contribution to successfully mastering these challenges. The right consulting partner should be selected carefully and on the basis of clearly defined requirements. Independence, industry expertise and methodological know-how are important selection criteria.

The importance of data-based financial decisions will continue to grow in the coming years. Artificial intelligence and advanced analytics will open up new opportunities to optimize financial processes and make well-founded decisions. At the same time, sustainability aspects and ESG criteria will also become increasingly relevant in the finance function.

Swiss companies need to actively shape these developments and position the finance function as a strategic partner within the company. Professional financial advice can help them to successfully follow this path and set the financial course for sustainable corporate success.