Julia’s Case study – Traditional business diversifies to survive
Traditional Printing business had previously been forced to downsize and are working with small workforce. Now they want to grow and diversify but do not have adequate financial records along with a weak cashflow. They try to keep their prices low to retain customers and attract new business. By identifying that the original print offerings were costing the business money it was decided to stop that line concentrating on Digital and T-Shirt print services out of a high street location and Ebay. The sale of the old print press went towards funding the development of the new lines.
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 parts of desktop accounting ledger.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 and keeps VAT Submissions up to date.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 were monitored regularly triggering quick corrective action.
5)Management Reports are produceda.P&L, Balance Sheet, Cashflow, Debtors and were regularly monitored to ensure that action was took place when needed.b.Regular reporting with narratives quickly identified that one line (old print press) was actually costing the business money on each order. Profits were hit.
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)Regional grants to assist with the relocating the premises/ downsizea.Money is available to partly pay for costs related to moving premises.b.Investment in the local economy is encouraged.