Look Before You Leap
We were contacted by a new client in financial distress, caused in part by an expansion in a new geographic market that didn’t work out. The client had not done a thorough financial analysis of the expansion, and it became quickly apparent after reviewing the fixed costs associated with the expansion that the revenues needed to make it work could not be realized.
Having the Right Insurance
Upon beginning our analysis of a new client’s financial status, we discovered that their worker’s compensation insurance had lapsed and that other insurance coverages were inadequate. Had a severe accident occurred the client would have been out of business. Working with an experienced broker we were able to get significantly better coverages while at the same time saved the client $30,000 on his annual premium costs.
Know Your Numbers
Our experience has shown that there is direct correlation between owners that take the time to understand their financial information and a profitable business. One client, an individual with experience in general contracting, made the decision when he started his business that he would prepare detailed estimates of jobs and track his actual spending against the estimates. We worked with the client to set up a job costing system for his business, oversee his accounting, and train him on how to interpret his financial statements. The profit margins on this contractor’s business exceed industry averages and he has been very successful.
Hire the Right People
A company that sells supplies to local and state government agencies had experienced high turnover in their bookkeeper/office manager position. This resulted in numerous accounting problems, including unbilled revenues and duplicate payments. Working with the owner we identified a more qualified individual who now, in addition to getting the accounting under control is also helping the owner branch his sales into new markets. Good help is hard to get but worth the search.
Sometimes It’s Not Cheaper to Do It Yourself
We have been involved in numerous accounting system conversions and setups. One client hired us to move from having a family member do his books to having his office manager do the work. Our approach was to work with the office manager to set up QuickBooks while training her on the software as it was installed. With follow up review and training she has now taken complete control of the bookkeeping. Another client contacted us to help him complete the installation of his accounting package. Upon on review we discovered several things that had not been set up properly, resulting in the delay of the installation, significant rework and additional costs. The project could have been completed more timely and at a lower cost with the right guidance.