Underlying problem 1: Staff

The director referred to the employee base as being like an unruly playground, where people were constantly bickering and the work didn’t get done in the way it needed to be done. I did employee engagement survey which showed people were unhappy but couldn’t be bothered to leave because it was a convenient role in a convenient location for most. It also showed that communication was an issue between management and staff. On top of that, there were no real job roles and responsibilities in place and people had title in name only but not actual role.

Solutions:

Firstly, we put monthly management meetings in place to get the team communicating effectively. They started out quite messy (as they always do) and a bit operational, but once the team had got passed all of the issues they’d clearly been needing to raise for a while, they became more strategic and high level. Each head of department has their own time and section but the whole team works together on solving the issues in the meeting, plus coming up with new ideas and strategies.

Additionally, we got proper job roles and responsibilities in place for the management team. Previously the operations director, for example, wasn’t doing an operations director job and hadn’t ever been an ops director previously. So we sat each member of staff down, gave them a job spec with roles and responsibilities and asked them if they were up to job, which I’m pleased to say they all said they were.

Outcome:

The management team started communicating with each other, which in term filtered down to the rest of the staff. But they also started communicating with each other in a way that achieved things, rather than just arguing all the time or going round in circles.

The team started taking their roles and responsibilities seriously, because they finally knew what they were doing and what they were working towards. They also started to divvy out tasks properly, for example certain staff members because fully responsible for things like health and safety rather than assuming someone else was doing it.

In short, the staff became happier and started working together effectively.

Underlying problem 2: Technology

In short, it was like stepping back in time when there was no technology and everything was paper based, or it was horrendously outdated. This was highly inefficient but also made it impossible to get any proper data out of the business (i.e. we couldn’t see any profitability by job, revenue stream etc).

Solutions:

Firstly, I moved the accounts from the incredibly outdated accounts system, Sage, onto the online system, Xero, meaning the business owner can now access their accounts from anywhere and reporting at a top line business level is considerably easier and more intuitive.

In addition to Xero, I put in place a reporting system I use which allows us to really drill into the detail, monitor Key Performance Indicators on a daily basis, create warnings where needed (e.g. bank account balance falls below X etc) and make reporting much more visually pleasing for non finance people.

We are now in process of implementing a full business job management system, which will enable the team to log jobs on the web, push information to and from staff members at their own leisure, automatically place orders with suppliers, improve their scheduling ability and drill into profitability of jobs, products, services etc to further increase our reporting and decision making capability, plus other benefits. Not to mention the money we’ll save on paper! The idea behind this is to enable the business to continue growing without the need for employing more staff at an exponential rate of growth.

Outcome:

The business owner, myself and finance and other staff can access the technology they need from anywhere. I have set up reporting which makes it easy to see and monitor what’s going on, daily, within the numbers, meaning we can now spend more time focussing on strategy and driving the business forward rather than using outdated and clunky systems. We’ll also be able to grow the business without having to increase costs to the same effect and therefore making it more profitable and efficient all round.

Underlying problem 3: Cash

As I was starting my remit with the company, they received notification that their bank were pulling their overdraft, which they we were consistently into for the full value. They had to find double the overdraft balance to get out of it and still be able to cover the business payments, when they’d been using it for months

Solution:

Firstly, the director put in a complaint to the bank and managed to get them to change the process from just taking away the overdraft immediately to reducing it by smaller amounts over a 6 month period to make it more manageable.

I set up a rolling weekly cash forecast over a 12 month period, and plotted in expected sales and expenses so that we could see what it looked like. Then, every week, before the person making payments made the payments, we would have a teams call and plot it in accurately. Often, after doing this exercise, it would be clear that the business couldn’t afford to pay all of the suppliers and we would need to move payments around pay smaller chunks off the balance to keep the suppliers off our backs.

Additionally, we went through the expenses in the business and streamlined where we could. Some of this part wasn’t nice but it was a necessary step to ensure we didn’t run into bigger trouble than necessary.

Outcome:

About 6 months later, the business was successfully ‘out of the woods’. It had over £100k in the bank and was going from strength to strength. Now, the business has just been paid for one of its biggest projects and has almost £1 million in the bank. How cool is that?!

Underlying problem 4: Financials and reporting

The management team was not receiving any management information and had no idea how much the business was making. The accountant would turn up and tell the owners what had happened during the year, and it would be news to them. The systems they were using enabled no real or meaningful data extraction and no one was having any real discussions about how the business was doing.

Solutions:

The first thing I did was get the accounts straight and correct. Then, and only then, was I able to start providing any information to the owner. However, due to the systems in place this was a rudimentary view and only really covered a top-level overview of the business as a whole and a really quick view of each revenue stream. Every month we sit down and go through the numbers, but with Sage it was hard to get comparisons from previous years, or drill down any further into the data, which is partly why we moved to Xero.

Xero enabled us to further improve reporting, add in the new system and add in the job management integrations etc.

Outcome:

The business is about to have it’s most profitable year, and last year was it’s most profitable year before this one. The business owner receives a full management pack every month, and every month we work to continually improve and expand it so that the owner and I have all the information we could possibly need to make decisions.

The owner has even started going through the reports mid month to see where we are. They’re able to look at data compared to as many previous years as they like and they are able to spot errors in the bookkeeping quickly so that we can keep the data as accurate as possible at all times. They are finally starting to understand what it all means and how to use it, which is exactly what the purpose of my job is – to help business owners understand and use the data in their companies.