If warning signs are ignored, growth turns into a total write-off.
Wirecard was a flagship company for a long time. Then the house of cards collapsed. To many small and medium-sized businesses, this sounds like something out of the financial press or a DAX drama. In reality, it is a very down-to-earth lesson: Those who do not systematically check warning signs are building their decisions on sand.
What happened – in two sentences
In June 2020, Wirecard announced that €1.9 billion in trust accounts likely did not exist. This was followed shortly afterwards by the filing for insolvency.
The case sparked a wide-ranging debate on supervision, statutory audit and balance sheet control.
The real lesson: ignorance often arises from ‘gaps in responsibility’
Many organisations fail not because of a lack of data, but because of a lack of accountability:
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Sales relies on figures from Finance.
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Finance relies on auditors/reports.
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Management relies on “market confidence” and status.
It is precisely this chain that makes fraud – but also perfectly normal misjudgements – possible. Because no one has the task of consistently bringing together external signals and internal plausibility.
What you as an SME can learn from this
You don’t need a DAX-level control architecture. You need a simple, repeatable red-flag process for situations such as:
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new major clients / large framework agreements
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new partners (IT, platforms, sales partners)
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Acquisitions / investments
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International expansion
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larger funding rounds or factoring models
1) “Evidence rather than assertions”
The most important rule: Key statements must be verifiable.
For partners, this means: cash flows, contracts, proof of delivery, references, ownership structure, hard figures. Not “slides”.
2) “External perspective” as standard
For sensitive decisions, you should include a fixed section:
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Registers/publications
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reputable media reports
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staff/location indicators
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customer/supplier indicators
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Legal risks and regulatory information
In the Wirecard case, the debate surrounding supervision and audit standards became so intense that it even led to legislative reforms (keyword: greater powers for financial supervision).
For SMEs, the implication is: Never rely on just one perspective.
3) Define stop criteria (that’s the professional move)
A stop criterion is a clear rule such as:
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“If cash flows cannot be verified, we stop the deal.”
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“If a partner cannot provide verifiable evidence of their key figures, we reduce the risk or walk away.”
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“If external signals are contradictory, an independent audit is carried out.”
Where AI makes sense – and where human involvement remains essential
AI can help to gather external signals more quickly, highlight contradictions and structure documents. However:
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Validation, follow-up enquiries, accountability and consequences are human tasks.
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AI does not replace the decision of when to stop.
What SMEs can take away from this
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Red flags are not mistrust. They are professional risk management.
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“We know them” is not a valid criterion.
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External signals belong in every major decision-making process.
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Stop criteria save money, time and stress.
Sources (selection): Financial Times; The Guardian; BaFin Annual Report 2020; EU Parliament Policy Briefings.
