Public
Sector

Municipal companies, municipally owned enterprises and public institutions stand between two worlds: budgetary regulations on the one hand, commercial management on the other. On top of this come reporting obligations towards public auditors, supervisory authorities and fee payers.

Tight budgets, staff shortages and rising requirements for digitalisation and documentation increase the pressure on accounting and administrative processes alike.

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Typical challenges

Processes are formally regulated but not consistent

Service instructions describe the target process, but actual handling deviates from it. Procurement and invoicing processes run decentrally, with media breaks and long approval chains – with corresponding throughput times and lost cash discounts.

Responsibilities and deputies are not clearly defined

Responsibilities for authorisation, verification and posting have grown historically. Absences and new appointments cause delays because documented procedures and deputy arrangements are missing.

Annual financial statements tie up considerable capacity

Closing work stretches over months, and auditors’ queries require time-consuming research. The causes are missing closing plans, unclear responsibilities and matters that are only dealt with at year-end.

Grown account and posting structures

Charts of accounts have been extended over the years and posting logic handled inconsistently. Individual balances can no longer easily be traced down to document level – every analysis inherits this lack of precision.

Valuation and accounting issues without reliable documentation

Provisions, accruals, fixed assets and special items require traceable derivations. Where these are missing, discussions with public auditors, supervisory authorities and external auditors regularly arise.

Specialist applications and ERP are not properly connected

There are interface gaps between specialist applications, ERP and accounting. Data is entered several times, reconciliations are carried out manually, and the level of digitalisation remains low despite existing systems.

How we help

Transparency as the starting point

In the K² Readiness Review we analyse the annual financial statements, account logic and account quality as well as the structure and organisation of accounting. In parallel we assess the end-to-end processes and the level of digitalisation in the areas involved. Process mining shows the actual process flow as opposed to the service instruction. The result is a reliable assessment with prioritised measures.

Designing consistent end-to-end processes

We optimise core processes across organisational boundaries – in particular purchase-to-pay, from the requisition through award and ordering to invoice receipt, verification, authorisation and payment. Digital approval workflows within public procurement and budgetary requirements shorten throughput times, create transparency over procurement volumes and document the flow of documents in an audit-proof way. We apply the same logic to order-to-cash and record-to-report.

Cleaning up bookkeeping and account structures

In Accounting Advisory we bring order to grown structures: clean-up of complex accounts and account classes, harmonisation of posting logic, traceable derivations down to document level. This makes accounting once again a basis on which analyses can rely.

Structuring and accelerating closings

We support annual and interim financial statements, the valuation of provisions, accruals and inventories, and the clarification of individual accounting questions in day-to-day business. Structured closing plans, clear responsibilities and moving closing work into the current year noticeably shorten closing times.

Building governance and audit certainty

Procedural and work instructions, an internal control system, clear responsibilities and deputy arrangements, documented posting logic and document flows. The goal is accounting that stands up to public auditors, supervisory authorities and external auditors – and that works independently of individual people.

System processes and digitalisation

In Finance Systems & ERP Advisory we implement processes on the system side: closing interfaces between specialist applications, ERP and accounting, eliminating duplicate entries and media breaks, and mapping workflows and authorisation concepts properly. We use automation and AI where they deliver demonstrable benefit and are compatible with budgetary requirements.

Implementation through to impact

Interim Management to bridge vacancies in key functions, K² Academy for knowledge transfer to your team, Business Process Outsourcing for services that are to be outsourced permanently.