Not even sure if you are making profits or losses?

question-mark-460868_640 Case Studies /Testamonials

The Problem!

An anxious Business Owner contacted me and as we chatted I realised he was very stressed. Further questioning revealed that uncertainty and lack of visibility of his business financial numbers was the cause. He was not able to guage his postion in terms of cash flow and availability of funds for growth.

 He was trying to grow his business but was unable to take any decisions around potential recruitment. He was procrastinating as he was unable to measure what the impact of these decisions would be on his finances.

There were no regular monthly accounts being prepared In terms of day to day profitability. He was flying blind! No wonder he was stressed, he was not even that sure he was actually making money!

The Solution!

I prepared the current years updated Management Accounts so they made sense! This was done by ensuring all the necessary accounting adjustments were made, These are the adjustmetns that give your accounts shape and realism. He told me he couldn't trust the figures as they didn't seem to relate to the reality of what he knew. They were consistant at gross margin level and profits didn't swing around from one month to the next. I also implemented the management accounting processes needed to ensure that the monthly accounts were ready by the 15th of each month. This ensured the timeliness of information for management review.

I was able to breakdown the monthly mangement accounts even further. This would help with the strategic decision making as I showed the profitability by service type. There were 8 different services offered by this company. I was able to show which ones were more profitable. This helped the business owner plan forward with more certainty. He now knew which areas he wanted to focus on and grow.

Next I tackled his cash flow forecasting. I put together a 12 month rolling cash flow projection. This gave him a view of what his bank and cash reserves would look like if he remained doing the same as what he was doing now.

The cash flow projection has provided a great starting point for him to get a feel of

  1. What his current level of cash gain has been over the past 6 months.
  2. What his current and projected level of spare cash headroom was. This allowed him is able to see what he had available to invest in recruitment which could drive future increased sales.

It provided the base line for further ongoing forecasts. These are based on different scenarios around strategy and projected sales growth and ensure he felt clear on the implication of taking any investment decisions.

Needing to know the impact of changing strategy?

question-mark-460868_640 Case Studies /Testamonials

The Problem!

An energy service installation business, was changing its strategy in a bid to shore up a declining market. We realised that this was going to be a difficult trading period, the business was moving its customer base from being mainly small domestic installations to much larger commercial customers. The level of funding required in terms of working capital needed to be clearly visible by project. Furthermore, view of the spend with key suppliers of the raw materials needed to show where credit limits and payment terms may be breached.

The Solution!

To help with the financial management during this period of trading I created a bespoke cash flow model for this business

This model gave the client line of sight on what the bank balance would be, given the planned contracts they were going to undertake over the next year to 18 months.

I worked with the Project Managers and the Directors to ensure the model gave visibility specifically to the critical areas.

Excel modelling techniques enabled me to quickly and proficiently provide a very visual tool which could be handed back to the business for their use and discussion in their weekly operations meeting. Being a project based cash flow model, this ensured that the Project Managers could incorporate this review easily into the current format of their project by project review.

The forecasting data from the model could be further modified to allow the Purchasing Manager to contact existing and new suppliers. He had all the necessary data to hand in terms of volumes required to timescale for the key raw material purchases. Given the larger volumes they were expected to be buying, moving forward, they were able to secure much more favourable purchasing deals in terms of both price and credit terms.

My online resources to help you with the financial management of your Small Business

Not sure what finance capability you need for your Business?

question-mark-460868_640 Case Studies /Testamonials

The Problem!

A Business Owner in the healthcare sector had grown his business very fast over a period of 3 years, He was now realising he had no core finance capability. This was costing him money and time in 2 ways.

 1. He felt did he not have reliable and timely management information to support his continued rapid growth.

2. Alot of the finance processes like payroll, invoicing, credit control and sale ledger management were all subcontracted out as part of an invoice factoring package. This was very expensive being 6% + vat of his turnover. This was cuttting into his margins. It also put a lot of control in the banks hands providing this service and this felt uncomfortable to the Business Owner.

The Solution!

I was able to break down the specific requirements for the business in terms of finance capability. I then recruited in resources, layering them in as part time resources based on what was needed specific to this business.. We used part time resources to enable the business to have several of the finance processes worked on at once. This ensured the effectiveness of the key areas and kept focus on these at all times.e.g consistant credit control and sales ledger management were critical to ensure our invoice funders were happy and didn't retain funding due to incomplete reporting.

Post my implementation of these new financial processes, I trained and handed these over to  a part time  management accounting resource. She  ensured that the whole monthly reporting processes were running smoothly. My time was then freed up to support the MD and management team with their strategic direction.

Now that we had our own inhouse finance capability, we were able to switch to a invoice discounting facility which saved 3% of turnover every year in fees. No small change for this £5m turnover business!

Responding to Rapid Change

question-mark-460868_640 Case Studies /Testamonials

The Problem!

My initial remit for this business was to help reduce the amount of obsolete stock by producing better management information. However, it became very apparent within a number of weeks that there was no in house credible finance capability. The bookkeeping was being poorly carried out. The extent  of which led to the business having over paid its vat as well as over declaring profits, This resulted in overpaying their corporation tax bill.

There had been much distraction to the whole of the business as the previous book keeping agency had misunderstood the true requirements  of the business. They had agreed to the implementation of a ERP accounting system which was far over and above the requirements of the business. Furthermore this was still not implemented after 2 years and still costing them implementation fees!

The Solution!

The business had already spent significant amounts on the implementation of the new accounting system with the system supplier. I quickly reviewed and took over the lead to assess whether this was right for the business. I concluded quickly that this system was completely wrong for the business. I implemented Xero for the business and the business now has timely, accurate and relible management accounts at a fractrion of the cost.

Sometimes  some businesses need to make decisions around role changes. Often for a small business, these need to be done quickly. I was able to roll up my sleeves and help the business through a difficult time to sort out their financial reporting and once more gain visibility of the figures. I sourced and trained the supporting bookkeeping resources who now work part time on specific areas of the financial reporting. They support a new full time book keeper. The new Finance resources now deliver monthly management accounts to time and accuracy. Due to process improvements of some key financial processes  these resources now work efficiently and effectively at a much lower overall cost. 

One of the areas I had no prior in depth knowledge of was EU Vat. However the business needed to register for Vat in 7 member states. There was simply no one else to lead this process so I took on the challenge. It is a buearocratic nightmare! Nevertheless my ability to adapt to what ever needs to be done has carried me forward to be able to complete this successfully for the business.