Team Performance Turnaround 22-person Finance Team Case Study

THE SITUATION

The finance function was an administrative function, processing invoices from suppliers and to clients. The function produced very limited reporting – one Profit and Loss report which did little to help decision making within the business.

Amounts owed by customers were often paid late, with a high level of queries on invoices, and a manual approach to paying suppliers. The finance systems hindered rather than helped the team.

None of the team members has received training or much support. This situation can often develop in businesses focusing investment on sales & marketing or operations functions.

THE PURPOSE OF THE PROJECT

To work with the Finance Team to improve:

1. Team skills and effectiveness, with a focus on developing commercial skills to support the business
2. Develop the systems to support the team, and increase effectiveness and efficiency
3. Develop reporting and visibility to drive ownership and accountability across the business
4. Change the processes to support the collection of cash, the effectiveness and efficiency of the team

In summary, transform the finance team outputs from administration to helping grow the profitability and valuation of the business.

THE PROJECT

Jess Coles (Emerson Nash) took over the leadership of the Finance Function. The work undertaken included:

• Setting a financial strategy for the business and a plan for the team to deliver against this strategy
• Set clear expectations of each role – the responsibilities, accountabilities and outputs required
• Train and develop the current team members to improve their skills, through weekly training sessions, and mentoring in weekly one-to-one meetings. The business supported a number of staff with CIMA and ACCA qualifications, increasing technical knowledge in the team.
• Instigated a recruitment process to find and attract highly skilled staff with the right team fit, from post-qualified finance professionals to school leavers. This broadened the type of skills available to the team.
• Created a focus on improving the invoicing processes, invoice query resolution and credit control resulting in a dramatic reduction in aged debt.
• Developed the finance system so that the finance function could produce detailed reporting to support the business. e.g. the P&Ls available increased from 1 to over 45.
• Instigated meetings with the senior and middle management of the business to help them understand what was happening in their areas and help these managers with decision making. The team moved from administrators to business partners.
• Increased the controls in place, particularly around working capital and the balance sheet. This eliminated reporting surprises for the business and provided a strong foundation.

The team and function transformed into a very effective team, which would not be out of place in many large corporates.

THE OUTCOMES

The team won the internal “Team of the Year” prize and was runner up in the second year. The team played a key part in increasing business valuation by over £10m, through increasing profitability by over £1m per year and increasing the cash available to the business on a permanent basis.

The team went from a quiet reactive team with little confidence, to a lively, proactive and confident team delivering great results for the business. It became a great place to work and progress the careers of team members.

The MD and other directors were delighted and had absolute confidence that the running of the business was in safe hands. They could concentrate on growing the business knowing that the team could deal with nearly all difficulties throw at them. This alone was a weight off their minds and reduced the burden on them of growing the company.