We have included five case studies so you can see our services in action. In order to gain a greater understanding of the scenario, we have included the problem, the solution and what the outcome has been for our clients.
Annual Review Case Study
Business Turnover: $1.6M
Number of Staff: 16 employees
Industry: Manufacturing
CASE BRIEF
Background:
This client was introduced to us by a referrer and supporter of Solution Central’s work. This business was extremely successful and a leader in its industry. The business owner understood that he needed to outsource the financials in order to free him up to grow the business.
The Real Problem:
The problem with this is that unfortunately the financials were entrusted to a bookkeeper who didn’t know her profession and really let the client down. Record keeping was inaccurate and financial information given to the business owner was incorrect. It got to the point where the he didn’t know if he was Martha or Arthur, and found it frustrating dealing with his accountant who was requesting information that the he just didn’t have access to.
The Solution:
We got busy rectifying the inconsistencies within the accounts, and in the process gained an understanding of the makeup of the figures. By producing regular financials for the Business Owner and explaining the figures we helped him to understand his business. The business had grown to the point that it employed a part time accounts clerk whose work we review several times a year. Following on from this we also conduct an annual review of the financials and prepare our well-known Year End Working Papers for the accountant.
The Outcome:
We bridged the gap between the Business Owner and their Accountant through opening lines of communication. With the provision of our Year End Working Papers, that include easy to follow referencing and detailed supporting documentation, their accountant now prepares the company tax return without the need to call the client to clarify figures. The client keeps the Year End Working Papers on file to refer to in future years.
Bank Loan Case Study
Business Turnover: $7.0M
Number of Staff: 11 employees
Industry: Construction
CASE BRIEF
Background:
We were introduced to this client by their strategy consultant who was engaged to aid business growth through securing a bank loan.
The Real Problem:
The consultant was trying to get his head around the financials so they could approach the bank for financing the growth phase. The major challenge he faced was that the figures kept changing after they were presented at the Board meetings. Furthermore, the owner’s representation of company profits didn’t fit with the figures the consultant was working with, causing endless frustrated discussions between the owner and the consultant. It was obvious that there were fundamental issues affecting the financials that required urgent resolution before the business could move forward.
The Solution:
We immediately set about working out the true position and performance of the business. Reconciliations were conducted, processes were implemented to prevent the same problems from reoccurring (along with considerable staff training), and we introduced weekly cash flow forecasting with a three month view ahead. It quickly became apparent that the cash flow figures weren’t lining up with the figures on the balance sheet. One major realisation that was highlighted through reconciliations was that the business hadn’t taken up $400k in supplier invoices.
The Outcome:
This finding explained a substantial part of the disparity between the overstated profit figures the owner believed to be correct in comparison to the figures held by the consultant. Once our work was completed the business had possession of financial reports that were a true reflection of their position and performance. The client subsequently acquired the business loan and employed a full time CFO to manage the financial business affairs.
Diagnostic Case Study
Business Turnover: $2.5m
Number of Staff: 6 employees
Industry: Property Sales & Management
CASE BRIEF
Background:
This client was referred to us by their business coach when the owner was ready to close the doors due to overdue creditors, outstanding superannuation and ATO obligations. The Business Owner felt that it was all too hard to make sense of the financials.
Real Problem:
Our diagnostic findings indicated that bank accounts had not been reconciled for some time, financial coding during the data entry stage was largely incorrect, and a separate payroll software was being used that didn’t interface with MYOB, their GL software. All of these factors resulted in non-existent financial reporting. To put it simply, the business owner was steering the ship in the dark without navigation equipment. A further consequence of the incomplete financials resulted in the business spending more than it had available, resulting in poor cash management, adding to the business owner’s stress.
The Solution:
Four days of reconciling and rectifying the accounts along with implementation of procedures, systems and checklists to ensure accurate monthly reports go to the business owner within five business days of month end. Furthermore, we implemented a weekly cash flow forecasting spreadsheet that gives the business owner a three month cash flow view at a glance. Our highly qualified bookkeeper visits this client once per month to answer any questions and tie up any loose ends.
The Outcome:
The introduction of these systems has given the business owner a complete understanding of his business. He now looks forward to reviewing the businesses financial performance every month with his business coach, and allows them to implement effective strategies for business growth. This has taken away his stress and replaced it with peace of mind. The business is growing from strength to strength.
New Business Start Up Case Study
Business Turnover: N/A
Number of Staff: 2 employees
Industry: Tourism
CASE BRIEF
Background:
This client had started their new business 3 months prior to contacting us. While the husband and wife team had a great understanding of their industry and how to succeed within it, their experience with the financial aspect of running a business was limited.
The Real Problem:
The business was taking off quite rapidly and the financials were neglected. Record keeping was maintained at a basic level however there were gaps throughout the records. The chosen software required substantial customisation to facilitate the complex nature of records that were required to be kept, and this in turn meant that training was crucial.
The Solution:
We audited the client’s processes to ensure we had an intimate knowledge of their business, in order to customise the software to suit their business needs. We then entered the backlog of financials into the system to bring them up to date, and produce meaningful reports. Budget preparation was crucial in this exercise so that business performance could be measured. This initial work facilitated the creation of a training manual that suited the business and was used to conduct comprehensive training with the business owners.
The Outcome:
Once we had completed the scope of work, we made ourselves available to the business owners to ask us questions as they familiarised themselves with the new way to manage their financials. Now, they are in full control of the financial management of the business, with the knowledge that the foundations that have been laid are solid and will facilitate growth within the business. When their business moves to the next level, they know who to call to assist them with achieving the next set of goals.
Out of Control Debtors Case Study
Business Turnover: $800,000
Number of Staff: 8 employees
Industry: Engineering
CASE BRIEF
Background:
This client was referred to us by an existing Solution Central client with the promise that we could make their financial problems go away…starting with out of control debtors.
The Real Problem:
After conducting a reconciliation of the receivables ledger it became evident that there were many instances of doubled up sales. This was impacting the balance sheet and giving the business owners a false sense of the business position, not to mention making them look unprofessional by chasing up ghost debts. On the flip side, the legitimate debts were piling up and had gotten out of control with their customers stretching out payments well beyond agreed credit terms.
The Solution:
Once we were satisfied that the receivables ledger was accurate, we took control of the debtors list. Within 2 weeks we had the debtors down from $250,000 to $90,000 which resulted in the client moving out of their overdraft situation. Two weeks later the debtors were down to a manageable $50,000.
The Outcome:
Our client voiced their pleasure of having money constantly hitting their bank account. This relieved a substantial amount of their stress and they could afford to make a lump sum repayment on their overdue rent.
