Improvements to both accounting and non-accounting systems delivers fantastic results for an electrical wholesaler
As this wholesaler’s outsourced accounting team and advisors to their finance director, we helped modernise an ageing accounts system, improve cash flow and slashed their end of year audit preparation fee.
The Business
The client is a large wholesale electrical company based in North Leicestershire with a turnover of £22m. Their finance director wanted to reduce the company’s reliance on his financial advice as he was out of practice and not confident as the sole source of advice. After their company accountant left, the wholesaler wanted to see whether we could fulfil this role to help them achieve some improvements that the old accountant never had time for, such as more timely management reporting.
Our Approach
Their previous accountant oversaw the work of four junior employees. We helped to rationalise the workload to bring junior staff numbers down to three. We TUPEd two employees to us, making one position an admin/accounts role within their business as our liaison. We carried out admin tasks that used to be done across the accounts team such as insurance renewal, stationery ordering and management of their company vehicle fleet.
The Results
As their outsourced accounting team we achieved the following:
- Improvements to both accounting and non-accounting systems and processes took work hours down from 650/month to just over 400/month
- Greater efficiency. Work is now completed at the right times (more hours at beginning and end of month with fewer hours in the middle)
- Modernisation of the accounting system. Management accounts now take ¼ of the time and are now completed on time at the start of every month
- Slashed the end of year audit and accounts preparation fee by £5,000 from £12,000 due to a more accurate accounts system
- Greater confidence in the system has brought in additional investment. Feedback from investors prior to our involvement was that they weren’t confident accounts were being put together accurately and they were heavily reliant on educated guesses
- An arm’s length relationship between our team and client’s other staff mean there are no longer any concerns over conflicts of interest
As advisors to their finance director we:
- Brought working capital up following a six-month project to improve cash flow.
- Outlined the levels of profitability across their four profit centres and established new cost centres in the business which previously were overlooked. We appointed people who were already in the client’s management team to take responsibility for these centres.
- Established stronger terms with the client’s customers to ensure better trading relationships
- Brought in a business consultant for their managing director to effectively assist in planning his retirement
- Worked with a wealth protection advisor to plan the managing director’s exit from the business and to ensure that his assets were secure against both the risks of the business and his tax liabilities. The advisor also established the tax position on his eventual sale of the business
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