The company was expanding but suffering from a lack of working capital to support growth. A venture capital house was willing to invest but required a clear business plan supported by financial projections. Systems used were inadequate to prepare financial information and unsuitable for the business which needed a contract based system capable of allocating costs to the different projects.
Improve relationships between the finance function and engineering to establish a clearer reporting mechanism and use this to develop a budgeting and forecasting tool supporting the business plan. Work with the venture capitalist to gain confidence and ensure the company could fulfil their requirements, both in production of the business plan and ongoing reporting. Ensure systems were capable of providing information to properly control and monitor revenue and costs against the business plan.
A standard reporting format was developed to effectively monitor contracts and this was used to develop a forecasting model for profit and loss, balance sheet and cash flow enabling a business plan to be produced. Following a systems review and specification preparation a new industry specific software package was identified and successfully implemented.
The venture capitalist made an investment of £1.5m enabling an increase in turnover and profitability. Internal and external stakeholder confidence was improved, with collaboration between finance and engineering supported by improved systems giving robust usable management information.
Case Study: Andrew Thompson (Click here to see Andrew`s Profile)