Cost-effective Finance Director support for domiciliary care business

Background

Case StudyA specialist care company had lost impetus and relationships between the directors deteriorated, with no clear vision for the future. Two of the business partners proposed to buy out the other two, one of whom was the FD and therefore required financial expertise to support the remaining directors.

The company operated several care homes, bank funded, so maintaining covenant requirements and the banks confidence with a new management team, having no track record with the bank, was a key deliverable.

Challenge

The client needed help to complete the purchase transaction and provide ongoing financial director support. Existing financial information was poor, with accounting systems not adequate to support the company. A lack of understanding around the figures was causing concern about the cost of providing care in an environment where each service user had different needs.

The finance team was not adequately resourced with no clear definitions of job responsibilities and no cover between roles, giving a high risk of potential issues surrounding payment of wages and client invoicing / debt collection.

There was little confidence in the existing finance function which was not properly integrated with the rest of the business and this needed to be addressed. The Head Office was split between two buildings, further exacerbating the problem.

The aim was to work closely with the remaining directors to improve their understanding of the finances and develop a team to adequately support this. Confidence of the company’s bank was a key requirement together with the need to ensure transparency and auditability of costs for their public sector clients.

Solutions

The approach was to work with the directors, developing reporting and KPIs, implementing a structured approach with a monthly board pack covering all aspects of the business.

A completely new finance team had to be engaged within 2 months of starting the assignment without interrupting payroll and maintaining client invoicing. Putting the finance department at the heart of the organisation and encouraging interaction with the operational team meant they became the go-to place for help and established a high level of confidence within the organisation.

The IT function was brought within finance, enabling more structure and the ability to allow some duplication of roles within the team. A new finance system was successfully implemented giving the basis for improved reporting and costing information to support profitability analysis for the business units.

Alongside this, a detailed specification for an integrated care management software system was written with the ability to roster and monitor staff care time, interfacing directly with payroll and the costing system.

Establishing a robust costing system meant that consistency in the bidding process could be achieved along with a better understanding of costs in the different care environments, enabling efficiency issues to be addressed.

Benefits

Reporting and KPIs were successfully developed, with a culture of accountability and responsibility being nurtured in the organisation. I provided mentoring at board level but also within the finance and operations teams. The accounts department was restructured and developed to provide a professional and competent team at the centre of the business, capable of supporting planned growth. Confidence of the company’s bank was enhanced and an additional facility to support proposed expansion secured.

A move to new offices was successfully managed, along with upgrading the IT infrastructure, which brought the organisation much closer together and provided a better working environment for the whole business.
The role was successfully handed over to a permanent FD.

EFM Expert: Andrew Thompson