Julia’s Case study – Setting up UK branch of a foreign parent company
European-based parent company set up in the UK following their massive success in mainland Europe. The business model is now moving towards a franchise. Stock is imported from Europe and held in the UK. In the early set-up stages, the UK director was initially still in employment. He has recently started working full-time and has relocated to the business premises. This is giving him and his family a better work/life balance.
The following points cover the main things I did to support the new business.
1) Set up accounting records on Cloud-based software
- Data is accessible from anywhere worldwide. Online submissions are possible for quarterly reporting to HMRC (for example, payroll/RTI or Making Tax Digital).
- Expenses can be submitted online, authorised and paid more quickly.
- Accurate stock records align with purchases and sales. Famous lines are easily identified and reordered.
2)Streamline and automate the bank reconciliations –
- This highlights any payments or receipts not supported by approved documentation.
- All VAT activity is recorded, which supports the quarterly VAT Return.
- Unauthorised activity can quickly be spotted and investigated.
3)Develop budgets and forecasts based on accurate actual data
- A benchmark is quickly established for the business
- Comparisons to industry trends or standards are possible.
- KPI Variances can be monitored monthly/quarterly, understood and actioned.
4)Marketing costs are shared with the new franchisees.
- Googlewords and Facebook attract new business across the UK and Ireland.
- Business vehicles are primarily large 4x4s and wrapped with company graphics.
- Corporate image is encouraged by company clothing displaying the company logo having to be worn.
5)Management Reports are produced
- Regular reporting to the parent company and the bank is possible with narratives to explain any variances or trends.
- P&L, Balance Sheet, Cashflow, Debtors and Creditors are commented on so that the relevant actions can be taken.
6)Produce “what If’ scenarios for possible new products or expansion schemes
- This highlights the effect on the finances of different options.
- Easily accessible information aids in timely decision-making.
7)Produce data to Get Ready for Investment
- Confidence in how the local management team run the business is established.
- Profit and Loss, Balance Sheet and Cashflow forecasts to illustrate to lenders how and when repayments will be made.