Management control system

Controlling is a German portmanteau of English: to control for " control ", " control ". The English name of the activity is "financial controlling ," "Management accounting" or " managerial accounting", the German name may with the traditionally viewed as " be equated internal accounting ".

The internal accounting as a management subsystem (see System theory ) deals with procurement, processing and analysis of data in preparation for goal setting equitable decisions by corporate management.


In the literature there are different approaches to establish Controlling as an independent business sub- discipline. Central to this is the idea that controlling is more than the mere summary of existing management tasks such as planning, reporting and variance analysis ( " old wine in new bottles "). In the last 20 years, the coordination -oriented approach has increasingly enforced. The independence of the controlling function is seen here in the coordination of the business management subsystems ( see Controlling # coordination tasks ).

Controlling an object field can be perceived by different persons responsible or the Board itself without a person's explicit designation " controller " leads. Especially in small and medium enterprises, the control function is often perceived by the management itself or by the head of accounting. Above a farm size of 200 employees is increasingly a self-contained controller responsible for these tasks.

Tasks and functions

Planning tasks

In collaboration with the senior management level, a controller performs the sub-goals of the areas together to form a holistic and coordinated target system. The target system is the starting point for the actual budgeting, are set out in the measures and resources to achieve these goals. The content planning is done by the managers in the areas. The controlling tasks include, inter alia, creating the required planning documents (forms) and the temporal coordination of the planning steps in the form of a planning calendar that is specified ranges. The sub- plans prepared by their executives are then checked by the controller to target conformity and combined into a single co-ordinated plan. The conclusion of the planning forms the fixation and documentation of plan values ​​in the form of budgets. Budgets represent standards which must be followed to achieve the planned targets in the following fiscal year ( see also Corporate Planning ). An alternative to budget- based leadership is the indexed operating performance measurement.

Information and service tasks

The controller organizes cross-divisional reporting and expanding this out to a comprehensive management information system. This refers to the regular transmission of business control information in a structured and compressed form to the executives. They form the basis for monitoring the economy and for the assessment of business performance based on outcomes such as earnings, profitability and contribution margin. In accounting ( financial and cost accounting ) the figures of all the past business transactions (actual values) is provided in evaluable form this first. The controlling accesses this database back, compresses it further represents the values ​​obtained from the given planning over and prepares them to user- oriented management reports. In addition, provides the controlling performance measurement systems available that are used for foundation of operational decisions. For example, the profitability of investment projects based on the capital value index ( sum of the discounted revenue surpluses ) are examined. For the controller, the information of cost accounting at least in the operating business, the essential basis for work available.

In addition to the periodic updating of the reporting system includes the basic design and development of computerized controlling systems for this task pane. Moreover, the controller is the executives as a consultant by helping the one to substantiate decisions economically and to assess their impact on earnings. On the other hand, it supports the management in the identification of processes and factors which affect the economy, research into their causes.

The so-called leadership cockpit (including the Management Cockpit or KPI cockpit) is a special representation of the basic economic data of a company that provides the controlling of corporate management as soon as possible. The controller as a carrier of transparency responsibility has the task to choose beyond the mere presentation of these metrics, a representation that reveals directly and clearly as possible, the extent to which corporate goals are currently achieved.

Control tasks

Under the control is by the systematic monitoring of business performance to understand the (re) control by certain measures ( by comparing actual values ​​achieved with the planned nominal variables ). It is advisable to document in addition to the originally written plan values ​​the changing, revolving target separately. Only in this way a meaningful review of the business performance to any conceivable time is possible. This deviation reports require a functional reporting. You can also support the achievement of objectives by ensuring the behavior of managers and employees regarding compliance with the prescribed budget.

The tasks of controlling go beyond the mere nominal -actual comparison ( implementation verification). As part of the deviation analysis of the controller analyzes any deviations, determined their causes and their effects on business performance. If necessary, it points to a need for action and triggers management countermeasures for the achievement of targets.

At this interface to the responsibilities of management, the consent of the controller and the business or management area of utmost importance. Ongoing conflicts of opinion on the premises of the business plan and disagreement over control methods attract political interference by the management according to which any planning can seem absurd. Controlling influence in the course of business is primarily influencing the behavior and roles of management, backed up by figures, data and facts controlling, which are evaluated by the management to the design of their business strategy.

The controller also makes predictions (Preview invoices) indicating the expected business performance so that potential deviations can be detected in advance and unwanted developments can be avoided. The three main forecasts provided are:

Coordination tasks

The focus here is on the one hand in the general goal orientation and the other in the coordination of the planning and control system with the information system. A distinction is made between a system and a system- forming coupling coordination task. System -Building Coordination means to provide a functional planning and control system or information system and make ongoing design, tuning and adjustment tasks in these sections. With coupled system of coordination, the coordination between the subsystems is meant, that is, in particular to meet the information needs of planning and control processes by the accounting and reporting. An important systemkoppelnde task consists, for example, establish an accounting, which reflects the impact of possible alternative courses of action adequately.

Rationality assurance tasks

As an extension of the coordination tasks Controlling is also seen as rationality assurance of leadership. Guide (managers ) completed by independent objectives pursued economic actors who have cognitive skills for this. Accordingly, one can distinguish between two types of rationality deficits: volition restrictions and skill constraints. As volition restrictions actions be construed that flout the goals of the entire company, to gain a personal advantage. Ability constraints resulting from the limited capabilities, such as lack of expertise and limited recording and processing capacity ( bounded rationality ). The task of controlling as rationality assurance, therefore, is to reduce or avoid these shortcomings. It is thus possible to increase the likelihood that management is despite the presence of deficits in the optimal sense for the company.

Control tasks

Controlling is often wrongly understood by the literal translation as a monitoring tool rather than as a management tool. Therefore Controller be construed as checkers and not as professionals for the management of business processes in many companies.

Historical development

Historically, the controlling has been first developed for private sector organizations. Here, early controlling concepts have initially established in industrial enterprises and transport companies of the United States of America. There are older synonyms such as Controllership and Comptroller, which illustrate the development of controlling from accounting in its etymological meaning. Thus, a native of the French neologism Comptroller may be regarded as so-called portmanteau word. The French words compte ( account) or compter ( count, count ) and controleur ( inspector, auditor ), or contrôler contrer ( check ) fused to the Comptroller (invoice checker, Controller). The first focused on controlling Chair in Germany in 1973 at the Technical University of Darmstadt (now Technical University of Darmstadt ) was established and staffed by Péter Horváth. He is considered the co-founder of this science discipline.