Key Results
The Challenge
The company needed to transition from cash to accrual accounting and rectify two years of financial records. This required expert assistance to streamline accounting processes and provide ongoing support to establish a financial foundation capable of supporting future growth and attracting potential investors.
Client Profile
The client was a mid-sized managed services provider with 250+ employees and $18 million in annual revenue.
The Solution
To address the challenges faced by the professional services company, we implemented a comprehensive, diverse approach that included the following key services:
Development of Standard Operating Procedures (SOPs) for the Entire Accounting System
We developed detailed SOPs to streamline the company’s accounting processes, ensuring consistency and accuracy in financial operations.
Preparation of Books of Account Following the Accrual Basis of Accounting
We converted the company’s accounting system from a cash basis to an accrual basis, ensuring compliance with US GAAP and providing a more accurate representation of the company’s financial position.
Creation of Management Reports/Dashboards to Measure Profitability by Location and by Resource
We developed comprehensive management reports and dashboards to provide insights into the company’s profitability by location and by resource, enabling better decision-making.
Provision of Due Diligence Support to Help Raise Additional Equity
We provided due diligence support to assist the company in raising additional equity, ensuring that potential investors had access to accurate and reliable financial information.
Comprehensive Financial Transformation Solution
Standard Operating Procedures
- Comprehensive SOPs for entire accounting system ensuring consistency and accuracy in financial operations
Accrual Accounting Conversion
- Full conversion from cash to accrual basis ensuring compliance with US GAAP and accurate financial representation
Management Reporting Dashboard
- Comprehensive dashboards measuring profitability by location and by resource for enhanced business insights
Due Diligence Support
- Comprehensive support for raising additional equity with reliable and accurate financial information
Our Approach
We deployed an integrated team of experienced professionals through a managed services model, bringing together specialists with complementary expertise to transform the company’s financial operations. Each team member brought significant experience and specialized skills to address specific aspects of the financial transformation. Key elements of this model include:
- Team-based model implementation rather than individual consultants
- Coordinated transformation across all financial functions
- Collaborative integrated team ensuring consistency across initiatives
- Strategic guidance and tactical execution
- Regular coordination ensuring improvements align with business objectives
Integrated Financial Team
Chief Financial Officer (CFO)
- 20+ years in financial management and strategy
- Led the conversion of the accounting system from cash to accrual basis, ensuring compliance with US GAAP and significantly increasing net profit from $680,000 to $1,300,000.
Senior Accountant
- 12+ years in accounting and auditing
- Developed and implemented SOPs for the entire accounting system, ensuring consistency and accuracy in financial operations.
Financial Analyst
- 10+ years in financial analysis and reporting
- Created management reports and dashboards to measure profitability by location and by resource, providing valuable insights for better decision-making.
Due Diligence Specialist
- 15+ years in financial due diligence and equity raising
- Provided due diligence support to help the company raise additional equity, ensuring potential investors had access to accurate and reliable financial information.
Accounts Payable Specialist
- 8+ years in accounts payable management
- Identified an excess payable of $200,000 during the cleanup of the company's books, improving cash flow management.
Results and Impact
Our managed services partnership delivered transformative results across multiple dimensions:
Significant Increase in Net Profit
By applying US GAAP and converting the company’s accounting system to an accrual basis, we were able to increase the company’s net profit from $680,000 to $1,300,000. This significant improvement in profitability provided the company with a stronger financial foundation and enhanced its ability to attract investors.
Identification of Excess Payable
During the cleanup of the company’s books, we identified an excess payable of $200,000. This discovery allowed the company to rectify their financial records and improve their cash flow management.
Enhanced Operational Efficiency
Our managed services solution streamlined the company’s accounting processes and implemented efficient practices, resulting in a 45-50% reduction in operating costs. Additionally, we achieved a 10-30% reduction in Days Sales Outstanding (DSO), improving the company’s cash flow and liquidity.
Improved Financial Insights and Decision-Making
The creation of management reports and dashboards provided the company’s leadership with valuable insights into their profitability by location and by resource. This enhanced visibility enabled better decision-making and strategic planning, contributing to the company’s overall success.
Our managed services partnership not only resulted in the successful conversion of the company’s accounting system and cleanup of their books but also significantly improved its financial management and operational efficiency. The enhanced accuracy and timeliness of financial reporting provided the company with better insights and control over its financial health, upgrading the company’s business capabilities.
