Consulting Case Studies
- Engineering firm wanting to improve its accounting processes
- E-commerce startup looking for help with cash management and funding
- Established company experiencing changes in multiple areas
- Rapidly growing retailer
Case Study 1
The Client
An Engineering Firm
The Challenge
The client had ongoing questions about the validity of financials being prepared by the firm's accounting department. The firm's president was concerned that there were inadequate financial controls and forecasting tools in place, and was unsure whether the controller managing the accounting department was the best person for the job.
The client asked CFO Selections to assess its existing accounting procedures, and the performance and capabilities of its accounting department staff. This was accomplished by using system audit procedures (reviewing trial balance information, reconciliations, previous financial statements, CPA Review, etc), combined with first-person interviews to attempt to identify areas of concern.
After the review, the president concluded that the firm should change some accounting practices and also hire a new controller.
The Solution
- Utilize the recruiting group at CFO Selections to facilitate hiring of a new controller, which was accomplished within 60 days from the start of the engagement.
- Develop new financial reporting standards including development of a corporate budget, variance reporting, and cash flow forecasting.
- Aid in the development of internal control standards, including procedural review of accounts receivable, accounts payable, purchase order standards, and revenue recognition.
- Aid in the closing of the previous year's financial statements, including CPA liaison work.
- Provide coaching, mentoring, and professional development for new controller, including specific focus on process documentation, and strategic skill development.
The Partnership
CFO Selections is continuing to support the client in a predominately strategic role, including providing high-level review of financial statements, and performance against budget. The client intends that CFO Selections will offer a strategic level of input and remain as a resource to the new controller as necessary.
Case Study 2
The Client
An e-Commerce Start-up
The Challenge
The client had to contribute significant personal funds to accommodate large variations in the company's operating cash and inventory needs. The client asked CFO Selections to help find a way to avoid some of these contributions. As is typical of so many small-business owners, the client had little time to pursue alternatives and was simply doing the same old thing because there was no time to look into alternatives.
An assessment by CFO Selections uncovered the following:
- Unusual delays in suppliers shipping product, and thus the client's ability to bill customers for shipped orders was hampering cash flow
- Purchases of high-turnover inventory items could easily be funded with a line of credit further easing additional cash requirements
- While the owners themselves had excellent personal credit, the company had none established
- If the company continued to grow at the same rapid pace, the owners would soon be unable to fund the growth from personal funds.
The Solution
CFO Selections presented and implemented the following plan:
- Recommended establishing a modest line of credit to manage current cash flow variations without the need for additional personal loans and investments and to begin the process of building credit history for the company
- Took on the task of working with the client's bank to identify the right banking group to work with and research available credit options
- Presented options to the client with a recommendation
- Handled submitting the application paperwork to the bank and was the primary bank contact during the entire process
- Helped the client to formulate an appropriate strategy for how to use the credit line to best advantage
The Partnership
CFO Selections is continuing to support the client in this area as well as others including business strategy, financial modeling and expense analysis in order to find other ways to pro actively anticipate the needs of the business to help ensure future success.
Case Study 3
The Client
A privately-held broadband communications technology developer.
The Challenge
The client was struggling to remain viable after significant changes at all levels of the organization and consolidating to a single location. The client won a significant contract with a very large and financially sound company, but needed to streamline the organization to create greater efficiencies so they could fulfill the contract effectively.
In the course of the transition, the client found that its lack of strong senior financial leadership was impeding the company's ability to successfully execute against the contract, meet board and investor expectations, and attain their goal of profitability.
The Solution
CFO Selections was initially hired on a part-time basis with the very specific goal of providing financial reporting to the senior management, Board of Directors and investors. Additionally, CFO Selections was responsible for recruiting and building a finance team. The engagement was expanded to include tax compliance and guidance, audit preparation, contracts management and administration, and general financial management. We were able to recruit a strong financial professional, thereby adding to the credibility of the finance team as well as the organization.
The Partnership
CFO Selections provides ongoing financial advice and services in cooperation with the client's new finance team.
Case Study 4
The Client
A rapidly-growing gourmet gift foods company.
The Challenge
The client suffered from cash flow issues caused by rapid growth, undercapitalization and lack of financial management expertise and control processes. The client accumulated excessive losses and struggled with liquidity issues that threatened future viability. They had grown too rapidly and lacked processes and working capital to fund their success. If the company was to remain in business, the client needed financial restructuring and a solid, experienced financial advisor but could not afford a full-time CFO.
The Solution
CFO Selections was brought in to clean up the company's finances and help find bridge capital. CFO Selections helped the client establish new banking relationships and secure a loan. Interim short-term financing was also secured to fund seasonal business. Subsequently, a plan was developed to help the client set goals for predicted future growth and cash flow requirements. Special planning was done to address the influx of sales due to appearances on national food shows. The client was impressed with our ability to problem-solve in a time of crisis, and said, "without CFO Selections, we would have had to close down."
The Partnership
CFO Selections continues to provide ongoing financial advice and services to help the company during its next growth phase.
