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Finance Directors Turning SME's into Profit Leaders

Alpha Enterprises Rescues SME from Intensive Care.

Summary

Company P had:

  • made losses for 2 years,
  • were up against their overdraft limit
  • who had also utilised fully their factoring limit

was under scrutiny by their bank, who put their facilities on 6 month notice period.  After engaging Shaun Leahy, of Alpha Enterprises, they had a successful meeting with their bank manager which not only continued their funding but extended facilities by 30%. The company is still trading and is now operating profitably.

Background

Company P’s bank undertook a review of its £100k factoring limit, its £100k overdraft and its trading record.  The factoring manager put the company on warning that it would continue banking services for only 6 months to see improvements, by when another review would be undertaken. Company P had a £1.1m turnover and the bank suggested a part time finance director be engaged.

Action

Company P engaged Shaun Leahy, the owner of Alpha Enterprises, to provide these services. After a thorough review of the company’s goals, Shaun performed a review and

  • gave an analysis of the company income streams and of its cost structure;
  • made changes to their accounting processes and timetables;
  • advised on operational decisions that turned around losses into profits;
  • introduced a cash planning & forecasting model and review process
  • reviewed fully the ledgers of debtors and creditors to help find Company P’s longer-term partners.

After some hard decisions, the company’s profits improved.

Bank Meeting

When the follow-up bank review approached, Shaun prepared reports and briefed the Managing Director plus tips on how to deal with their bank toi get value for money. The bank manager spent over 2 hours reviewing and questioning the business model, the operational reports, the business cash-flow and the forecasts. She was impressed not just with the quality of the ready information for an SME, but also by the change of priorities of the business and of its new found confidence and attitudes in decision making.

Before leaving, the bank manager reinstated its factoring facilities, without a notice period, plus offered a proposal to extend Company P’s factoring facility limit by 30%.

Note

Names have been changed to protect the healthy, growing company involved.

Member firm of the ICAEW (www.icaew.com).            

PII: our professional indemnity insurer is Barbican syndicate 1955 at Lloyd’s. The territorial coverage is worldwide excluding USA/Canada.