The role was initially to replace the previous FD and review and improve the management information and reporting systems. This was completed in two months and included implementing a new accounting package, building from scratch a sophisticated forecast package, creating a monthly accounting and reporting structure and implementing a budget process.
The company’s business model is based around sourcing products in the far-east, importing and packaging them and then inserting the product into the company’s existing distribution chain. The product range is sold through a variety of retail and wholesale channels as well as on line.
In the period 2009 / 2010 the company grew rapidly, principally as a result of an affiliate marketing model which drove on line sales. In 2010 the company faced a crisis which threatened its survival when it discovered that it had been subject to a fraud. Litigation ensued between the company and another party which lasted over a year and placed severe stress on management and the finances of the business.
During this period the financial management and operation of the business had been neglected as had the sales and marketing operation. The directors asked me to prepare a report on a number of aspects of the financial management operation and control of the business. It became clear from this review that stronger management of the finance function of the business was required.
I was retained by the directors to take responsibility for the finance function, acting as interim FD. During this time I Implemented a new accounting package, oversaw the transfer from the previous system, drafting and implementing an operational structure and procedures manual to support the new system. Implemented a monthly management reporting pack and cycle which included working with the board to identify KPIs, monitor and implement change based on the results of the financial reporting. I agreed with directors a cost reduction process for variable costs and overheads saving over 10% on prior year across the board and over 20% on marketing spend.
I was involved in supporting the fundamental restructure of the business model away from the affiliate based one and prepared a detailed forecasting package (P&L, Cash Flow and Balance Sheet) with integration into the management accounts, to support the decision making and implementation of this model.
The planned growth referred to above required investment in and development of a range of new products. The decision was taken to split the business spinning off the “new product” business into a separate company under the control of a former director while retaining the core products in the existing company. At this time my involvement to the responsibility for the production of the management accounts. I was also retained to work with the auditors on production of the statutory accounts.
Three months later I was re-engaged by the MD as a result of a cash flow crisis and increased creditor pressure. I was asked to manage the creditor position as part of a re-instated cash management process. I focussed on the preparation and management of a rolling 12 week cash flow forecast, integrating cash management into the operating culture of the business. This engagement, which involved almost daily contact with a range of stakeholders to manage the process lasted 3 months and resulted in total creditor liabilities were reduced by 75% in this period.