Real FD

Case Studies

We are interim managers. We either act as Interim FD's or we support an FD or Board with a program of change. Some of our assignments start like a revolving door. As we enter, the previous FD exits. There may be no transition at all, but with our skill and experience we still start to deliver very quickly. We have done this many times before.

Manufacturing

On a recent project the FD handed us a note with numbers, quite literally, as we passed each other in the foyer saying the business was insolvent. The business, a subsidiary of a European parent, was a small UK Manufacturer based in the South-East, turning over c. £40m.

The issues it faced were not atypical and, when you know how to, are all easy to fix. It was clear within the first few days what those issues were

• No confidence in Finance by the parent company
• Lack of financial leadership for the business
• Nothing but short term cash planning, i.e. bills would be paid if cash was in the bank rather than on priorities and bills coming due in the near future
• Poor quality management reporting, with no emphasis on the balance sheet, i.e. there was a black hole of c. £500K
• Unstructured IT development and system changes
• Focus on historical P&L results rather than out-turn and projections
• Late reporting and accounts not filed at companies house
• No formal board and or senior management meetings where numbers would be discussed and decisions taken
• Low morale in Finance
• etc etc

Working with the MD, local management and European Finance we raised overall standards, cleaned the balance sheet, implemented proper month end processes, developed reporting, managed suppliers and cash, rebuilt the finance team into a value added function, and put a proper structure around system and IT change.

We also secured financing, identified a range of operational issues impacting profitability and helped with the recruitment of the permanent FD.

Distribution

This distribution business had suffered over several years from not having the right quality of staff in senior finance roles. There had been a number of FDs in post but they had failed the business. One of the main reasons, they lacked experience; they had either been promoted from within or were in their first FD role.

Staff turnover was very high, and worryingly, the business would bypass finance altogether in their decision making as their responses were either too slow or were just plain unhelpful. Finance pointed their collective finger at the "green screen" systems which were old and evidently in need of replacement.

There had been a business case and CAPEX for c. £300K to replace the software but it was not approved by the US parent company. It's just as well. The systems weren't the issue and there were far better uses for the cash.

In this case our approach was focussed on four key areas (a) restructuring the finance team (b) raising the profile of finance in the business (c) being more commercial, and (d) getting the most out of the software which was under utilised and not at all understood.

Within our restructure we cut headcount by over 20%, and made some simple changes to the software so it could better support the business. These small changes meant we could reduce the month end timetable by seven days and gave us a suite of reports and analysis tools, through ODBC, which were completely meaningful for the business and could be used by the directors to make the informed decisions needed in a turnaround environment.

If you would like to know more, or would like our independent advice for your business, or would like to arrange a call, then reach out to us through our contact page.