Monitoring Of Financial Parameters To Prevent Bankruptcy
In the field of corporate crisis prevention there is a
before and after. We obviously refer to the new legislative decree implementing
Law 155/2017, the famous " Code of business crisis and insolvency ",
approved on January 10, 2019.
The innovations introduced are many, to replace on a large
scale what is contained in the previous RD 267/1942 on bankruptcy and in Law
3/2012 as regards the composition of the crisis. Certainly among the
fundamental points of this reform is the introduction of the indicators of the
business crisis , which however, it must be underlined, remain for now a rather
abstract concept: let's see more closely what it is.
The code of the
business crisis and the famous indicators
The indicators of the business crisis introduced by the
reform are tools aimed at helping the entrepreneur, who, thanks to them, will
be able to understand (in advance) whether the company is moving towards a
possible crisis . The advantage is clear: thanks to the indicators of the
business crisis, the managerial guide can safely monitor the situation.
The problem, rather, lies in the fact that the law does not
specify in detail what these signalers of the crisis could be, whose definition
is left to the order of the accountants. And that's not all: as pointed out by
the Bank of Italy itself, " the identification of alarm thresholds, [...]
is not a simple exercise ".
We therefore need modern tools for alerting corporate crises
: the combination of the past, accountant and Excel spreadsheet, cannot work
properly in the new digital era of businesses.
Business crisis
prevention: the need to use predictive software
The objective of the reform of the business crisis is clear:
to allow companies to spot the abyss in time and, therefore, to prevent the
possible crisis, moving accordingly on the basis of the signals collected. As
anticipated, the law does not clearly indicate the nature of the indicators of
the corporate crisis, but certainly these must be not simply "descriptive",
but rather "predictive".
Otherwise, these tools will not be effective to meet the new
legal provisions.
However, it seems clear that the solution is made up of
specific predictive software , which gives companies and / or their consultants
the concrete possibility of making precise predictions. And that's not all: the
same predictive software integrated in the company's financial management can
be set to automatically signal, well in advance, the presence of the crisis
indicators.
From this point of view, it can be understood, at least in
part, why the Code of business crisis and insolvency does not contain the
precise definition of the indicators of the crisis. Each company and each
sector, based on its nature and its financial management method, may in fact
have the need to set differentiated business crisis indicators . So here is a possible
reason that explains the reason for a law that is anything but specific and
rigid in the definition of criteria.
The importance of being able to rely on a monitoring
software that allows the administrative or CFO to have a clear vision of the
trend and therefore to avoid a possible crisis is therefore doubly important.
Ultimately, the new Code of business crisis proves to be - also - an
opportunity not to be missed for Dubai companies.
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