Case Study 2
Client Requirement
The client, a major firm of consultants to the construction sector, required accurate monthly financial information and high level reporting of financial issues to its Board without the commitment to the cost of a full-time Financial Director. Monthly financial reporting to its funders was also a condition of the Company’s loan agreements.
In addition, the business was concerned about the length of the invoicing / cash collection cycle and needed assistance reducing this together with a review of its contracts of appointment.
Work undertaken
A contract has been agreed for the provision of a set number of working days per month to undertake the following:
- The preparation of monthly management accounts from information produced by the Company’s in-house accounts team.
- Assisting the Directors in the compilation of an annual business plan and budget.
- The preparation of a monthly financial report to meet the requirements of both the Directors and the company’s funders focusing on trends within the business.
- A focus of reducing invoicing cycles (previous on average five working days late) and cash collection (previously 57 days) from the Company’s clients.
Outcome
The Board of Directors report that they feel better informed about both the current financial position of the business and the future financial challenges that lie ahead.
The lenders reporting requirements have been satisfied.
Invoicing cycles have been reduced from 5 days late to “when due”
Debtors days have been reduced from 57 days to 37 days.