Craig Rattray was introduced to a company that had delivered growth from £1m to £2m to £5m in the latest full financial year and was forecasting ongoing growth. The bank remained supportive and suggested that changes to the financial infrastructure were required to successfully manage continued growth and the working capital requirements of the business.
An initial project was carried out looking at:
- Existing Financial Management and Reporting
- The key purpose of this was to change the financial management culture and ensure that the company had robust systems and procedures in place to deliver timely and accurate information that could be used to measure, influence and change performance.
- Review of Cash Management and Forecasting
- The key purpose was look into the introduction of the CRCS rolling weekly cashflow model and tailor existing practices.
- Preparation of the Budget for the financial year 1 January 2015 to 31 December 2015
- The company had never prepared a budget.
The key findings showed a number of areas for change and improvement including:
- Accounting and Finance function had historically been “outsourced” to the company’s external accountants.
- Reasonable historic information was prepared, but was not timely and not within the control of the company as a result of most accounting work being done off-site.
- There was multiple keying of information and significant duplication, but despite this a lack of control.
- Weaknesses in job costing and understanding actual against original budget as prepared for the client, and for use in future budgeting/pricing.
- High level and suitable information should be made available to the various Operational Management teams to allow them to run their area of the business and improve performance, in addition to allowing the Board to assess performance.
- Inconsistency in the management of projects and the type and manner of information collated.
Significant changes were initiated internally, and a Financial Controller with previous experience of the company was recruited. The revised weekly rolling cashflow model was introduced and a budget prepared for the current financial year. Roles, responsibilities and internal procedures were also changed.
Craig Rattray has continued in a part-time Finance Director role and assisted in other strategic and commercial matters on an ongoing basis, as well as assisting in the increase in working capital facilities to £2m to allow growth in the current year to be financed and managed.
Management accounts, updated forecasts and variance analysis are all prepared timeously on a monthly basis and reviewed in conjunction with the directors and senior operational management team.
The company is well placed for continued profitable growth over the next few years, and has recently won a number of new projects.
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