Schönherr GmbH

Preparing for Basel II

Transparently credit-worthy

To be able to get credit a decent rates under Basel II, Bindesysteme Schoenherr GmbH is banking on a modern and very transparent reporting system. The mail order firm is using new accounting and controlling software systems to make itself fit for the increased requirements.

Medium-sized companies will have to reckon with tighter scrutiny of their credit applications under the new "Basel II" regulations. "We expect that banks will take a very close look at things in the future," says Christian Lubig, clerk and Head of Accounts for the mail order company Bindesysteme Schoenherr GmbH. The 50-employee business in Maschen near Hamburg has already turned its attention to Basel II – and achieved an excellent bargaining position with its bank. The solution: trust through transparency.

Schoenherr reports like a quoted company

The company, which styles itself as, "a specialist for professional presentations", fulfils the bank's requirements due to a reporting system which is unsurpassed among companies of this size. It allows turnover analyses, prognoses and a special, mail-order-specific sales controlling on a daily basis. Every month, the accounts department creates internal reports showing profit/loss, a business management assessment including overall performance and other, individual analyses. And as if Schoenherr were quoted on the stock exchange, the bank and partners receive a quarterly controlling report which is practically a company statement.
The internal controlling processes allow reliable prognoses and quick identification of risks. The voluntary quarterly reports make Schoenherr's financial situation transparent. Both create trust on the part of the bank, thus increasing the company's creditworthiness.
To get to this stage, however, Schoenherr had to completely replace its controlling and accounting software. Their previous system just was not capable of meeting the new reporting requirements. Until then, Lubig had had to struggle with an "incredibly complicated" accounting program. For analysis and planning Lubig and Uwe Goth, Head of database Marketing at Schoenherr, used MS-Excel, a report generator and a statistics software. "But we always had problems putting values and variance analyses on a time axis with those programs," says Goth.

Financial software completely overhauled

Schoenherr first of all decided to acquire the controlling solution CORPORATE PLANNER. This was followed by the accounting software "Diamant /2" from the Bielefeld manufacturer Diamant Software. Both systems are perfectly tuned to work together, as the manufacturers are strategic partners, and have integrated the accounting and the controlling software using the most modern technology.

Modern reporting

"Previously we'd spend days creating our reports; now we can do it in two minutes," Lubig comments positively on the introduction of the new software. There is a clear separation of roles between the accounting and the controlling software. Diamant /2 handles the financial and asset accounting, the cost accounting and the year-end closing, while CORPORATE PLANNER takes care of the monthly reports, flexible ad hoc evaluations and the planning. It is also used for sales controlling. To get the monthly reports, the accounting package fills the reports in CORPORATE PLANNER with the latest data in a matter of minutes. The software also shows the data graphically, and the user can intuitively navigate within the display using the mouse, accessing more detailed and cumulative views, switching between displays, extending the time axis, and so on.

Jump straight from the report to the record

Due to the integration of the controlling and accounting software, the user can jump directly from an entry in a report to the booked record in the accounts. For Christian Lubig this is a great advantage in terms of everyday controlling practice. "In every analysis there are several points when I want to know exactly which records are behind the variances. The integration makes my work a lot easier in that respect."

BASEL II report in progress

Together with their bank and tax consultant, Schoenherr are currently developing a report which will meet the demands of Basel II. It will be precisely tailored to the information requirements of the bank, and is set to replace the quarterly report in the next year. Since the Basel commission has passed the credit guidelines, but these have not yet been fully implemented by the banks' software systems, the precise design of the report is not yet 100% fixed, but this doesn't bother Christian Lubig. "Our software is highly flexible. If, for example, the bank decided it wanted new financial performance indicators from me, they could have them at a moment's notice."