Client's Request:
The owner of the company struggled with a lack of trust in their financial data, which made informed decision-making a challenge. Key difficulties included tracking team performance, setting realistic goals, allocating funds between reinvestments and dividends, and managing employee motivation. The root of these challenges lay in disorganized financial management and blurred boundaries between personal and business finances.
Challenges:
- The company used a cash-only approach with single-entry bookkeeping, lacking the depth and reliability of double-entry accounting;
- Errors in categorizing expenses led to inaccurate reporting;
- Personal and business finances were intermingled, creating further complexity;
- No templates for management reports or systems for tracking KPIs existed;
- Absence of service costing, overhead tracking, and net profit analysis;
- Lacked processes for reporting, payroll, accounts receivable, fund distribution, and spending limits.
Technology:
- QuickBooks Online (QBO);
- Google Spreadsheets;
- Slack (Slack Flow).
Solutions Implemented:
- Conducted a comprehensive audit to pinpoint issues in financial accounting and reporting;
- Integrated QuickBooks Online to automate accounting based on primary data, synchronizing with Google Sheets and team timesheets;
- Established templates for management reporting to automate profitability and margin analysis;
- Streamlined data collection and department presentations, assigning responsible personnel and setting benchmarks;
- Created distinct business and reserve funds to prevent overlap;
- Defined a structured process for calculating and scheduling dividend payouts;
- Educated the owner and managers on essential performance metrics to enhance decision-making;
- Introduced a streamlined process that reduced collection times;
- Linked Slack, Google Sheets, and QBO for seamless compensation management.
Results in Numbers and Facts:
- Collection period shortened by 17 days (a 35% improvement);
- The owner now makes decisions based on clear financial insights;
- Automated accounting, reporting, and analysis saved over 100 work hours for the finance team;
- Management costs decreased by 30%;
- Clear separation of personal and business finances;
- Newly implemented KPIs enabled managers to track project and team efficiency.
