Case Study 1
Situation
The company’s manufacturing operations department managed labor
costs with little information. In 2011 Operations labor costs were 15% over the
prior year on only an 8% increase in sales.
Action
I created a management report comparing labor costs to budgeted labor costs and inventory produced.
Result
When sales slowed, production saw the variance and reduced labor costs reducing a $100K variance from budget. At the same time efficiency (labor inputs to inventory outputs) improved by 20%.
Benefit
Leading companies to understand their data and make better decisions.
Case Study 2
Situation
A manufacturing company had a strategic need to transition from the accountant they had for over 30 years.
Action
With a 3 months overlap, I learned the existing accounting system, created the first budget and cash flow projection, implemented improved accounting controls and improved reporting. We also transitioned to GAAP accounting from tax accounting and brought the fixed asset sub-ledger in house while completing a first-year audit.
Result
Within 18 months of transitioning from the prior long-time accountant, the accounting team absorbed a new company that added 30% to the top line with no increase in staff.
Benefit
Leading and assisting companies to become GAAP compliant while improving the efficiency of accounting departments. Completed first time audit
on time and on budget
Case Study 3
Situation
A manufacturing company’s financial statements were prepared on a tax basis. The owner was planning on pulling back from the company and wanted an annual audit on a GAAP basis.
Action
Analyzed GL, fixed asset sub-ledger, and source documents to create GAAP financial statements with notes, and the audit was completed within 3 months from being employed at the company.
Result
The audit was completed on time and on budget and the owner realigned some of the daily operations by pulling back on overseeing the day-to-day management. Another plus was a $420K deferred tax credit that was taken into income 5 years later.
Benefit
Deep knowledge on first time audits leads to the audit being completed
on time and on budget.
Case Study 4
Situation
A manufacturing company had no ability to measure the relative effect
of varying rates of raw material cost increases on its product costs by product
line. Price increases were unevenly implemented between years, and between
customers.
Action
With the VP of Operations help, we categorized raw materials and projected cost increases by category. I extracted data from the accounting and manufacturing systems and created an analysis that compared volumes of various items’ sales, material costs, units and dollars. This gave the relative impact of increases in various raw material components. The analysis also included historic market and futures data for our major cost components.
Result
Margins were maintained in a time of uneven raw material cost increases.
The company learned that major materials (various types of steel) were not
expected to increase over the next year and that the effects of price increases of
other raw materials was minor
Benefit
Leading companies to understand their data for decision making.
Case Study 5
Situation
The company needed due diligence on a manufacturing acquisition
that would grow the business by 30%. Prior acquisitions had not been
immediately profitable.
Action
I did all the accounting due diligence on our acquisition as the closing
deadline moved three times. Uncovered a warranty issue on a carry forward
product.
Result
The acquisition added 60% to profits and 20% to sales in its first year.
Warranty protections were negotiated into the contract.
Benefit
Leading companies to do effective due diligence on acquisitions.
Case Study 6
Situation
The company had an opportunity to grow the business by 10% on one
order. Part of the decision was to make or buy a key component.
Action
As soon as the detail information was known, I created and implemented
a cash flow projection that showed if we manufactured the part, we would add
nearly $1M to our cash flow needs. We talked with the vendor about the benefit
of the large order and requested favorable payment terms for them to keep the
business.
Result
Maximum cash flow needs were reduced by $1M by recognizing the cash implications, communicating and negotiating with a supplier that gave us favorable payment terms.
Benefit
Leading companies to understand cash flow and negotiate with vendors.
