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The struggling finance team

Bringing it in house

Cash is King!

A Brain to pick

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A start up technology company's fund raising had stranded due to lack of proper accounts and forecasting. The company was pre revenue and required funds in order to meet salary commitments by the end of the week.

We understood the urgency of the situation and were on site next day, working tvelwe hours to produce a first set of management accounts including their first balance sheet and a detailed forecast. The company received its funding which ensured operations for the next six months.

We quickly got behind the key drivers of the business and its revenue streams and were called in on an ad hoc basis following the initial visit to update the accounts and forecast using the package we had already put in place.

A fast growing  technology company had started trading, but was still pre-profit. It had backing from VCs and other shareholders but required additional funding to facilitate further growth.

The company had an in house accounts function which was recognised to be failing to produce the management information neccessary to raise funds.

Working as their FD we mentored the existing finance team to produce quality MI, including the production of weekly KPIs. We tightened credit control procedures, improving cash collection and introduced stock pipeline reporting to aid the sales process.

Using our bespoke business modelling tool, we produced quality MI and forecasting thus enabling the shareholders to seek the additional funding.

Their  CEO stated he had never seen such quality budgets as those we produced.

A Software company had reached the stage where an external accountant did not provide with the support they required.

 

Finance and Control were brought in with the remit of bringing the book keeping in house, set up regular reporting procedures and establish project costing and profitability analysis.

A new accounting framework was put in place, simple enough to be used by the client's newly hired office manager. Procedures were kept traightforward and, with supervision and mentoring, were soon of a quality to produce the manangement information requested. The accuracy of historic financial information was likewise improved by review of work carried out by an external accountant.

With the accounts in house, cash collection became more reliable with a resultant cash flow improvement.

For the project costing, a new project template was developed for use in all new sales with input from the technical team. Any new quotes required sign off by both technical and sales director. In addition a new timesheet system was implemented meaning the actual cost of a any project could be measured against its plan.  This exercise required persistence and diplomacy in order to change entrenched behaviour in the company.

 

With the above in place, it was possible to prepare a credible forecast and tell a convincing story to outside investors and embark on a fund raising round.

Our client suffered from lack of liquidity during the financial crisis. Like many SMEs it was at the mercy of extended payment terms dictated by its blue chip customer base and reduced credit from suppliers.

 

F&C were asked to bring the accounts under control and negotiate with the bankers. This initial task went well, with the bank extending the overdraft in order to help with spikes in working capital. Terms were negotiated with majors suppliers and a Time to Pay arrangement agreed with HMRC. The VAT quarter was moved so payment did not coincide with other major commitments.

A weekly and sometimes daily cash flow was set up with payments strictly against receipts.

 

Over the next few months it became apparent that the above steps were not sufficient to fully support the company and the bank decided to transfer the company to its Special Measures team. F&C managed this new relationship with the bank and ensured that all information provided, including forecasts and projections, was rigorous. We also ensured that any promises made were kept. In addition, F&C identified and implemented a 20% reduction in overheads.

 

After twelve months the company's trading and overhead reduction led to a much improved cash flow and the bank moved the company out of Special Measures.

 Finance and Control were brought in as FD/FC of a fast growing Technology company. The book keeping had been brought in house  but the small accounts function was not coping.

 

F&C set up controls and procedures which enabled the inexperienced team to manage the accounting with part time supervision. We then moved on to the production of reliable, meaningful and forward looking reporting which was used as a basis for obtaining funds to finance the growth of our client.

 

There was an initial outlay in time for the client whilst the processes were put in place, but once  accomplished, F&C were retained on a reduced basis to assist the Board in their strategic decision making and to oversee the finance function.

The time commitment has increased again as the client has grown thanks in part to the funding F&C have managed to negotiate on several occasions.

Continuous mentoring of the client's finance staff has meant the existing team is well placed to handle the increased volume of business.

F&C were brought in as mentors of a Head of Finance who was struggling to keep control of the finances of a rapdily growing company. The business owners were concerned as to the reliability of management information and the incumbent was keen to progress to the next stage of his career.

 

We quickly gauged the person's strengths and weaknesses and through a detailed review of the finance function were able to guide him in areas of weakness or lack of experience. This was carried out in a diplomatic fashion, ensuring the incumbent did not feel threatened and remained the main contact with the business owners.

 

Through F&C's mentoring, the structure of the function was improved, management information became more relevant, the total cost came down and a comprehensive long term strategic plan was developed.  From being an expensive and ineffective function, finance became an integral part of management and direction.

 

Once the above had been put in place, F&C continues guiding the Head of Finance on reduced basis.

 A PE backed packaging company was exiting through a trade sale. We were brought in to manage the due diligence process.

During that process we uncovered a 'hole' in the company's accounts. This was reported to shareholders and buyers and the sale  put on hold whilst the situation was rectified.

 

We replaced the incumbent finance manager, produced revised statutory accounts which passed audit and communicated with HMRC regarding underdeclaration and payment of VAT.

 

The exercise uncovered a raft of non financial  issues which led to a new CEO being appointed. With the new CEO we investigated the company's operations and put in place operational and financial procedures which improved  profitability of the entity.

Following this exercise, the original buyers were contacted again and the exit proceeded with only a three month delay.