Case Studies
Case Study 1 - Performance Reporting and Review
The business concerned was a former division of Barclays Bank, purchased by a privately owned and VC-backed group. Andrew Burrows was appointed Finance Director of the new company. As part of the transition into new ownership many Finance activities and processes had to be redesigned and implemented from scratch. One of those was the monthly performance reporting process. Andrew and his team developed a monthly reporting pack that enabled the board and senior management team to review the performance of the company on a monthly basis, and make decisions on aspects of customer service, operational control, pricing for future contracts, recruitment and distribution suppliers, amongst other things. A cut down version was also used to satisfy the bank’s requirements for regular information.
The full report initially contained a summary income statement, income statements for the two major product lines, and gross profit and order volume analysis for each customer by product. Each of the income statements showed revenue, gross profit and ten major expense headings; and each major direct cost was expressed as a ratio of both turnover and gross profit. The income statements also showed order volumes and expressed volume-driven direct costs as £ per unit. The pack also contained a balance sheet and cashflow statement.
In order to design the report pack Andrew had to first ascertain the requirements - who would be using the information, and what they were interested in seeing (i.e. what was important to their part of managing the performance of the business). Draft templates without figures or with dummy figures were then produced, and the final pack was agreed after an iterative process. During that process requirements were tested against what data was readily available from the operational and accounting systems, and whether the available data was reliable. If information was requested where data was not available or the data was not reliable, compromise decisions had to be made: For example, how hard is it to change the operational processes to capture the data required? Or how critical is the requested data? Are there other sources? Are there surrogate measures that could be used in the short term?
Of course, the available data and the report format were not the only important considerations. There was also a process to design to get the data into the report template in the required format. This involved some work with database queries and Visual Basic macros in Excel.
Andrew recalls,
“It was an intense time. We knew that we were not going to please everyone in the first attempt. But we had to communicate well and be pragmatic so that we could deliver something useful for the first month, along with a timescale for delivering enhancements over the following months. Even so, the board was very pleased and we were able to have good decision-making discussions based on the reports from the word go.”
Case Study 2 - Finance Leadership
The business concerned was a small privately owned and VC-backed software company. There was a CFO, an Accountant and two clerks to look after the purchase ledger, banking transactions, accounting and invoicing. Andrew Burrows was brought in by the CFO for a few months to ensure that the Finance team was operating effectively, so that he could focus on selling the business and avoiding insolvency. The two clerks resigned on Andrew’s second day with the business, with one of them leaving the same day. This left the huge challenge of keeping the Finance activities working smoothly, so that staff expenses, sales commissions and payrolls continued to be paid, and that customer invoices continued to go out on time. The latter particularly was critical, since the cashflow of the business was extremely stretched. Within two months, however, a full team was back in place, whilst at the same time improvements had been made in invoicing, revenue accounting and cashflow forecasting. By the time the business was sold four and a half months after Andrew’s first day, Finance was running smoothly and the new owner had a much easier job of integrating the new acquisition.
What made this possible was Andrew’s collaborative and involving leadership style, his ability and willingness to spend time training and coaching new staff, and his willingness to get his hands dirty.
First Andrew stepped in to the Purchase Ledger role, to make sure that kept going, while at the same time trying to use his many Finance employment agency contacts to find a temp very quickly. Once he had identified the new person he took personal interest in their training to ensure that they got up to speed quickly. He then had to do the same with the other role, but in doing the hands on work he also developed much better ways of doing things. Once he had recruited the second temp he was able to spend time personally training them in his new procedures.
Andrew comments,
“Whilst inputting purchase invoices into an accounting system is not what a Head of Finance would normally do, it did show that I can can help in every area of Finance. It was helpful for me too, if I’m honest, in that it got me to know the business, the processes and the people a lot quicker than I might otherwise have done. I was really pleased with the work I did with the team there, and I really enjoyed both building the team and working as part of the team, because a strong Finance team is essential to making sure that any business remains financially healthy. Without it in this case, I doubt that the business would have survived as long as it did.”
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