Adding Value: Turnaround of an Existing Finance Department

Problem identified

The business was a UK property company which had experienced rapid growth within a short timeframe and the finance function was failing to deliver basic financial information on time or add any value to the organisation. The problems identified included:

• Failure to properly utilise the company’s accounting software;
• The unnecessary maintenance of a number of dormant companies which increased the compliance (audit & tax) costs associated with running the group;
• Failure to deliver management accounts & meaningful financial information within agreed deadlines;
• An inefficient financial model for evaluating the performance of existing projects and appraising new property acquisitions.

Solution proposed

• Initially worked with the bookkeeping staff to explain the capability of the accounting software available to them so that the writing up by hand of company cashbooks and data being entered into Excel spreadsheets could be eliminated and the data entered instead directly into the system.
• Identified all dormant companies so that final balance sheets could be prepared and where appropriate inter-company balances written-off, all creditors settled, dividends distributed or investments written down. Once the company had been ‘cleaned down’ it was then struck-off by making the appropriate filing at Companies House.
• To ensure that management accounts would be delivered within the agreed timetable required the accounting cut-off date to be brought forward and the books closed earlier each month. This when combined with the efficiencies outlined above gave the finance department more time to carry out the month end processes and provide more meaningful reports to
• Created and designed a new financial model to enable the property asset managers to efficiently evaluate the performance and outcomes for both new and existing projects using a range of scenarios and sensitivities.

Outcome