Something we come across often with clients is this feeling that they have a lack of transparency around financial data.?
We recently had a marketing agency - let's call them XYZ Marketing - engage us because this lack of transparency was causing them to feel unable to make decisions quickly and confidently. This was further complicated by the fact that they had recently raised capital and were a public (unlisted) company and needed to ensure that their information was accurate and reporting was compliant.
Some of the issues that they were facing were:
- Month-end close was being done on an ad hoc basis with no urgency
- When directors would ask questions it could take a week to get a response with a lot of manual work needed behind the scenes to extract the data in order to respond
- There was no formal board report format so information kept changing and was inconsistent
- There was no automated consolidated reporting, Xero extracts were being consolidated manually in excel to form a consolidated report which was very time-consuming and prone to error
- Board meetings were only held every 3 months because the information was too difficult to collate more regularly
- Reports were being asked for and then produced ongoing but it was unclear if anyone was still using the information
- Delays in collating information meant that problems were only being discovered 2 months down the track
The pain this was causing was
- Lack of confidence in the figures reported
- The board did not have the visibility to proactively support and discuss real-time issues
- Delays in information meant problems were being discovered too late to correct or risked?compliance breaches.
Their Lantern Partners CFO made the following changes once becoming involved:
- Worked with them on a business model which identified their drivers and gave them clarity around what metrics to measure and monitor in their reporting
- Put in place a regular monthly close timetable with their in-house accountant so financial results were available on a timely basis
- Automated the board reporting so consolidated financial reports were available as soon as the Xero file was closed for the month. Time could then be spent on the analysis and commentary rather than the compilation of the report.
- The suite of reporting was reviewed and superfluous reporting was stopped, freeing up resources to concentrate on more valuable tasks.
- As a result confidence in the data improved significantly and the business was able to make quick decisions on reliable data.
Do you relate to XYZ Marketing??
If you want to talk to one of our CFOs send us a message?and let’s chat through how we can help you gain clarity around your numbers.
