Julia’s Case study – Secure financing to grow and diversify

Award-winning environmentally friendly manufacturing business wanted to grow and diversify but had poor financial records and cashflow. Finance providers and banks are very excited but had turned them down for potential grants or investment.

I worked with the Board and helped them to implement systems and controls which shed much better light on the business. The following points are what we did to improve their situation.

1) Move the desktop accounting software onto the cloud a. This ensures the staff and external accountant have access to same data.b.Online submissions are possible for quarterly reporting to HMRC (for example payroll/RTI or Making Tax Digital).
2)Automate the day to day processing of accounting documents a.This is more efficient by reducing duplication of effort caused by the same data being input into different spreadsheets.b.Improves Credit Control and Cashflow.c.Better trained/informed staff contribute more and are happier.
3)Streamline and automate the bank reconciliations a.This highlights any payments or receipts not supported by approved documentation.b.Unauthorised activity can quickly be spotted.
4)Develop budgets and forecasts based on accurate actual data a.A benchmark is quickly established for the businessb.Comparisons to industry trends or standards are possible.c.KPI Variances can be monitored monthly/quarterly.
5)Produce “what If’ scenarios for possible new products or expansion schemesa.This highlights the effect on the finances of different options. b.Easliy accessible information aids timely decision making.
6)Produce data to Get Ready for Investmenta.Confidence in how management run the business is established.b.Profit and Loss, Balance Sheet and Cashflow forecasts to illustrate to lenders how and when repayments will be made.7)Secure regional grants to assist with the purchase of expensive machinerya.Money is available to partly pay for key Fixed Assets.b.Investment in the local economy is encouraged.
8)Secure EIS investment to finance expansion and diversification of products.a.External investors are able to reduce their own tax liabilities by investing in EIS schemes.b.Having an external Board member can bring the required skills and experience which a growing business needs.