"Today companies need expert cost accounting to have liquidity and overcome the crisis." That's the headline from the interview with the associate economist at ML International Lawyers, Javier Sanz de Acedo, published by the newspaper Information. The newspaper article explains that "most companies only analyze 30% of their own economic data" and highlights the opinion of javier Sanz de Acedo: “That is why they are unable to see beyond the day-to-day or beyond the annual budget. And in that 70% of data that they do not study conveniently, they could find solutions to a good part of their problems.” In the interview he details how to locate all the processes in which a company can save and which is currently a priority for many SMEs.
– What is cost accounting?
– At ML International Lawyers we go beyond the financial accounting that all companies do. Cost accounting analyzes all the economic data generated by a company in its activity and we obtain very valuable information from that 70% of data that is not normally studied. We are able to see in detail, by processes, by departments or by products, where a company loses or earns money. Generic accounting is not capable of controlling each process in detail and seeing where the money escapes. Unfortunately, budgetary policy still does not prevail in the business fabric of our province and almost only large companies maintain tight budgetary control of their finances. And although from this office we advise on debt refinancing, we believe that many times they would be avoidable with more effective control.
– How can this help SMEs?
– A lot, because we segment all the activity of the company and do accounting by parts, which really gives us a much deeper and more segmented vision of the company. Most SMEs would need expert cost accounting to be able to save, have liquidity and overcome the crisis caused by the pandemic. We go further and the entrepreneur can see where there are concrete losses and what improvements he can apply. Both the monitoring of costs, margins, indebtedness, as well as financial statements and cash-flow allow to anticipate to a great extent the evolution of the company, predict its evolution and anticipate possible adverse elements. Anticipation is key, which is why the bankruptcy law reform project provides that restructuring plans can be followed when it is objectively foreseeable that the debtor will not be able to meet their payments within a two-year horizon. Precisely for this reason it is essential that the entrepreneur has a global vision of his company not only in the short, but also in the medium and long term.
– Are cost savings now a higher priority?
– Yes, companies are suffering from a liquidity problem, mainly due to the lack of financing. Defaults on ICO loans are going to grow as banks turn off the tap, inflation rises and transport costs skyrocket, without forgetting that European Next Generation funds arrive late and the conflict in Ukraine generates great instability. Given this, one of the most affordable strategies is to reduce costs. And that distinguishes us at ML International Lawyers: we sit down with the businessman and help him, giving him a real and in-depth financial picture of his business, so that he can see where he is failing and where he can act. This is financial consulting, information outsourcing to overcome the crisis that many companies are suffering.
– As an international firm, do you now recommend going abroad?
- Of course. In Alicante there is a very open business mentality, but we still find businessmen who do not dare, even though they have products that would be very competitive in other markets. We encourage them to do so and we accompany them in this process of working abroad because right now there are many sectors for which it is easier to have opportunities in other countries. For us, construction is a good example: when the “real estate bubble” burst here, many companies successfully reinvented themselves in other countries. We have experience in many countries and in very diverse products, from agri-food to IT, and with good results.
From this link you can access the online news published by the newspaper Information.
