Free-up cashflow
Reducing stock
Background: a medium-sized retail company was facing significant cashflow problems due to excessive stock. They had invested heavily in their stock, but sales were not keeping pace, leaving them with a costly overstock.
Key data:
- Business sector: retail
- Size: - 5 employees
- Sales: €1.5 million
- Particularity: family business
Diagnosis:
- Far too much stock, leading to the cash flow problems identified by the manager
- Lack of employee motivation
- Poor management of deliveries resulting in late customer payments
- Poor sales policy
Actions:
- Overhaul of the procurement process: we have overhauled our procurement processes, stopping all purchases from stock except for customer orders
- Development of a stock liquidation strategy: destocking campaign, promotions, free delivery, etc.
- Analysis of sales trends: we analyzed sales data to understand which furniture categories were selling best and what the customer trends were
- Analysis of competitors' prices and products
- Cost optimization: replacement of advertising by social networking campaigns, staff optimization
- Renegotiating supplier payment terms
Results:
Actions taken to reduce inventory levels have had a positive impact on the company's financial situation:
- Liquidation of surplus stock: the company has managed to sell off a large part of its surplus stock (around 70%) through promotions and special sales.
- Improved cashflow: the reduction in inventory levels freed up cash (around €150K), which improved the company's cashflow position.
- Cost optimization: replacement of 2 half-time positions by one full-time position, lower advertising costs.
- Optimization of deliveries: 5x weekly deliveries instead of 3 using an external service provider.
- Improved procurement processes: the company is now better equipped to manage its stock more efficiently in the future.
Ultimately, reducing inventory levels enabled the company to solve its cashflow problems, improve profitability and better adapt to fluctuations in demand.
Financial transparency
improved financial transparency for a service company
Background: a company lacked visibility of its monthly financial performance. The lack of figures was preventing it from making informed decisions to improve profitability and growth.
Key data:
- Business sector: IT services
- Size: - 50 employees
- Sales: €15 million
Diagnosis:
- The company only had figures at the end of the year => impossible to make decisions during the year
- Inefficient accounting system with external billing module
- No cost accounting => impossible to calculate exact profitability
Actions:
- Assessment of the company's current financial situation by examining its accounting statements and financial monitoring practices
- Setting up an ERP-type system
- Collection and analysis of key financial data such as revenues, expenses, profit margins and operating costs
- Monthly closing of accounts and creation of detailed financial reports
- Analysis of financial reports: we helped the company interpret its reports, identify areas for improvement and draw up concrete action plans
Results:
Thanks to these actions, the IT services company has considerably improved its financial visibility and overall management:
- With the implementation of an ERP, the company has an efficient tool for managing accounting, purchasing and invoicing, as well as for calculating costs and profitability accurately, thanks to cost accounting.
- She now has accurate, up-to-date financial data for every month.
- Monthly financial reports have enabled the company to make informed decisions to reduce costs, increase profitability and invest more strategically.
- The company has been able to identify under-exploited sources of revenue and exploit them effectively.
- Increased financial visibility has boosted confidence among investors and business partners.
In the end, the company saw a significant improvement in profitability and growth thanks to better management of its financial data.
Budgeting
Introduction of budgeting to improve financial management
Background: a company was experiencing cost control problems from one year to the next, preventing it from making investments.
Key data:
- Business sector: retail (cosmetics)
- Size: 80 employees
- Sales : €20 million
Diagnosis:
- Fairly well-managed accounts, but no financial reports with key indicators
- Lack of budgets to anticipate decision-making
Actions:
- Initial assessment: the consulting firm began by evaluating the client's current financial situation by examining its financial statements, internal processes and objectives
- Setting up a financial reporting package
- Budget planning: in collaboration with the client company, we developed a budget plan that included revenue forecasts, projected expenses, profitability targets and key performance indicators (KPIs)
- Monitoring and adjustment: once budgets were in place, we assisted the company in regularly monitoring performance against budgets and making adjustments in the event of deviations
Results:
The introduction of budgeting and financial reporting has had a significant impact on the company:
- More relevant visibility on figures thanks to a quantified and documented report on key indicators.
- Budgets have enabled the company to better understand its finances, plan its spending, make more informed decisions and be able to seek investment from banks.
- Budgeting helped the company to better control its costs by identifying areas where savings could be made.
- The financial targets set in the budgets have helped the company to work more strategically and get closer to its profitability targets.
- Budgets have enabled the company to better anticipate cash requirements, thus reducing unforeseen financial crises.
Ultimately, the help of an external company to set up budgets enabled the client company to gain financial control, visibility and operational efficiency, all of which contributed to its long-term success.
Digitalization
Internalization of accounting with ERP implementation for a fast-growing company
Background: a medium-sized service company providing management consulting services, had been outsourcing its accounting for many years. However, over the past 2 years, the company has experienced strong growth, which has led to an increase in both staff and sales. As accounting management had become an important issue for the fiduciary, the company decided to internalize its accounting to gain greater control and efficiency.
Key data:
- Business sector: services
- Size: 10 employees
- Sales: €5 million
Diagnosis:
- Strong growth
- No day-to-day vision of numbers
- Accounting requiring analytical management
- Staff without accounting training
Actions :
- Explanation of context to the accounting firm
- Action plan to internalize accounting
- Implementation of an ERP system to integrate all processes
- Hiring of an accountant
- ERP training for all company players
Results:
- The internalization of accounting has given us very short-term visibility on our figures.
- The company has gained greater control over its accounting processes.
- Better billing tracking thanks to integrated system.
- Better control of supplier payments.
- Access to real-time financial data has enabled the company to make more informed cost management and financial planning decisions.
In the end, the service company managed to improve its accounting by internalizing the process and implementing ERP, which had a positive impact on its profitability and ability to manage its finances effectively.
Increase profitability
Stagnating profitability improvement
Background: a medium-sized company was facing profitability challenges. Despite its technical expertise, it was struggling to generate sufficient profit margins to ensure growth and profitability.
Key data:
- Business sector: construction
- Size: 25 employees
- Sales: €12 million
Diagnosis:
- Analysis of the company's financial situation
- Analysis of operating accounts
- Analysis of margin and cost of sales
- Employee utilization analysis
Actions:
- Identify cost optimization opportunities
- Rationalization of materials purchasing
- Negotiate prices with suppliers
- Optimizing the use of workers on construction sites
- Implementation of truck maintenance contracts - Implementation of a worksite management tool, including the use of project management software, more precise planning of work and better management of deadlines.
- Setting up a pricing strategy
Results :
- Optimization of sales-related costs led to a significant increase in margins.
- Reduced operating costs, which had a positive impact on profitability.
- The pricing strategy enabled us to increase sales while remaining competitive => increase in contracts signed.
- The site management tool has enabled us to plan our workers more precisely, resulting in improved margins.
Ultimately, the help of the specialist construction consultancy enabled the client company to increase its profitability by optimizing costs, improving project management and establishing a more effective pricing strategy.
Cash management
Implement cash management to improve financial visibility
Background: one company had no formal cash management in place.
Key data:
- Business sector: personal services
- Size: 30 employees
- Sales: €17 million
Diagnosis:
- Analysis of the company's financial situation => recurring cash flow problems, poor management of unforeseen events
- Analysis of the accounting process: semi-internalized accounting causing work synchronization problems with the accounting firm, unexpected invoices, etc.
- Analysis of operating costs: personnel management without cost studies by position => too many senior employees in the company => high costs
- Revenue analysis: invoiced revenues are consistent with services provided, but can be optimized by reviewing personnel costs (point 3)
Actions:
- Implementation of a complete cash-flow monitoring tool with dashboard and highlighting of key indicators
- Setting up weekly meetings on the state of finances
- Optimization of field teams => tour sectorization
- Reduction in administrative staff => 2 half-time instead of 2 full-time
- Setting up systematic direct debits with customers
- Complete accounting internalization
- Create a budget report
- Implementation of a complete CFO report (balance sheet, income statement, cash flow and budgets)
Results:
- The company now has clear visibility of its cash flows, enabling it to closely monitor its financial situation and anticipate future needs.
- Cash management has enabled the company to better anticipate and cope with unexpected cash flow crises.
- Real-time financial data has enabled the company to make more informed decisions on budget planning, hiring and cost management.
- Improved cash management has reduced the need for costly external financing to cope with cash flow fluctuations.
- Complete internalization of the accounting department has enabled us to gain better control over our cash flow by avoiding delays in encoding by the accounting firm.
- Improved HR management has increased visibility of labor costs.
- The introduction of direct debits for customers has enabled us to make much more accurate revenue forecasts.
Ultimately, the implementation of cash management strengthened the human services company's financial stability, improving its ability to deliver high-quality services to its customers.
