Acquisition in Italy? Ensure Control Over the Acquired Entity.
The transaction is complete, and the legal department is popping champagne. You are now the proud owner of an Italian entity. But for Accounting and Finance, the work has just begun.
One of the main challenges is likely the absence of the right Accounting and Finance (A&F) professional to bridge the gap between the Group and the local company. Typically, your Group A&F team is well-versed in international practices and deeply familiar with corporate policies and procedures. Meanwhile, the local team is adept in local practices and regulations, often guided by the experts who prioritize national standards over harmonizing with the Group’s framework.
In such a setup, communication often breaks down. Even when speaking the same language, your Group and local teams may interpret terms differently, leading to inaccuracies in reporting and a lack of transparency.
How to Bridge Group and Local Accounting Gaps
You need a professional with expertise in both local standards and international requirements—someone who can bridge the gap, ensure accurate communication, and deliver reliable, transparent information to the Group.
Proven Success Stories from FinDep Consult
From Loss-Making to Profit-Generating
A UK-based group specializing in credit management acquired a local company in Milan that had no experience with international standards. The company lacked management accounts, budgets, and insight into its performance. Statutory reports showed consistent losses, and the Group had no idea about the company’s monthly revenue or costs due to traditional annual closing practices.
What we did:
- Migrated local accounts to the Group’s ERP system (MS Dynamics).
- Implemented monthly IFRS closing, giving the Group real-time insights into the company’s performance.
- Introduced direct cost controls, enabling operations to identify inefficiencies and optimize processes.
Outcome:
Within two years, the company transformed into a highly profitable business.
Managing 100 Local Entities Efficiently
A UK-based leader in the renewable energy sector entered the Italian market by establishing multiple special-purpose vehicles (SPVs)—one for each project. Managing these entities posed significant financial and operational challenges.
What we did:
- Effectively handled both Group and local accounting, ensuring timely and accurate reporting in both systems.
- Developed a development cost control process that allowed project managers to monitor costs effectively and enabled the Group to oversee the financial performance of all projects.
Outcome:
We saved the client significant advisory costs while maintaining high-quality financial management.
Reclaiming Control of an Acquired Business
A UK global holding specializing in insurance services faced challenges two years after acquiring an Italian business. Communication gaps between the local and Group offices resulted in non-transparent accounts and missed performance management opportunities.
What we did:
- Conducted thorough reconciliations, uncovering material discrepancies in reported figures (e.g., overstated revenue, understated costs, and incorrect balance sheet items).
- Identified root causes, primarily stemming from miscommunication between Group and local accountants.
- Established clear processes for closing, data reconciliation, and reporting.
Outcome:
The Group gained transparent and accurate accounts, improving overall performance.
Why FinDep Consult?
At FinDep Consult, we specialize in supporting Groups during every phase of the post-acquisition process, ensuring seamless control over local operations. With expertise in both international and local standards, we make sure your business thrives in Italy.
Let us help you turn your acquisition into a success story.