Financial Control Assured!
Freelance finance directors, plugging the gap between your book-keeper and your accountant.
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Management Information Systems A client had a business which was carrying out three separate activities. Although the accounting records were up to date, and monthly management accounts were prepared, these did not help with decision-making as they only showed results for the business as a whole. The owner of the company needed to know how much profit was being made by each separate activity. We decided that there was no need for a major change in the accounting software being used. Instead the chart of accounts for the existing software was changed to enable income and expenditure to be identified for each activity. A means of splitting shared costs was found, and the book-keeper was trained in the new procedures. This was a short, cost effective project. One unexpected side effect was that as the client was not sure how much the costs of one of the activities was, he had been cautious when quoting for jobs. Once he knew how much profit was being made from that activity he felt confident enough to reduce his prices slightly. This resulted in an increase of 50% in the conversion rate of quotes. The increase in profit more than paid for the cost of our services.
Debt Collection and Cash Flow A client company had problems collecting debts. Part of the problem was that it had a large number of small value credit sales. Personal cheques were often received from business customers and it was difficult to match the receipts to the outstanding invoices. Over time the sales ledger on the client’s computerised accounting system had got into a muddle. As everyone in the company knew that the aged debtors listing contained a lot of mistakes they were disregarding it and not chasing up genuine outstanding debts. We started by persuading the client to introduce a new policy whereby payment had to be made with the order for all sales under £150 in value. Credit and switch cards were accepted by the client which reduced the problems of implementing this strategy. The layout of the sale invoices was changed to incorporate a “tear off” remittance advice, to be returned with the cheque, which showed the invoice and sales ledger account number. This made it easier for the book-keeper to match up the receipt to the outstanding invoice. We then helped the client to identify which debts were really outstanding and cleaned up the accounting records so that the aged debtors listing was up to date and correct. The next stage was to set up a procedure for collecting outstanding debts. A series of letters and telephone scripts was designed for the client, and his staff were trained in their use. Some telephone training was given so that the staff felt more comfortable chasing up the outstanding debts. The new procedures were carefully monitored by us over a three month period during which the average payment period was reduced from 64 days to 36 days.
Strategic Planning The owner of a property-rental company asked us to help her focus on the really important things in her business, so that she could drive it forward in ways that would meet her long-term objectives. We had two half-days together. We started the first one by discussing whether she was enjoying her business life as much as she would like. This led to talking through the things that the business was doing well and those that it wasn’t doing so well, and beginning to think about where she saw herself in 5 years time or so. We ended the afternoon by brainstorming some ideas about how to generate more interest in her properties from her target audience, and how to increase both occupancy rates and weekly charges. An Action Plan for the following month was agreed, with specific timings to enable it to be completed before our next meeting. The second session started by reviewing this Action Plan. It was immediately obvious that significant progress had been made, and we built on this to set some further goals, particularly in areas of systemisation, managing perceptions, and staff responsibilities. We then moved on to the bigger picture, as the month that had elapsed had seen developments in her personal life which had totally changed her thinking on her longer-term ambitions. A number of very different options were explored, which led to us listing down some fairly fundamental decisions that needed to be made before any new business direction could be settled. She eventually decided to sell off the business and retire with her new husband to sunnier climes – definitely a successful outcome to the initial brief!
If you would like to find out more about ways in which we can help you please contact us to arrange a free, no obligation meeting by telephoning 01908 258823 or send an e-mail. |
Case Studies
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