From Zero to Hero

Saving clients form the brink of disaster and back into profits, positive cash flow and strong reserves

The problem

Finance Box took on a client in the hospitality industry. As we onboarded, it became clear that poor systems, out of date processes and slow data had led them into some terrible decisions. The business had already entered into CVA based on data that it had in place, but that data had been incorrect. Things were very desperate.

Having made several commitments to repay creditors over an extended period, Finance Box had to help them step up and improve so that they could meet these based on the real data we were able to generate.

The client began well, but then all progress was wiped out with COVID-19's disruption. The hospitality sector was one of the first to have its doors closed and one of the last to be re-opened. Things looked pretty dire. Staff expected payment, landlords demanded rent in full - it looked like the end.

What we did

The first thing we did was to look at replacing their existing accounting system with something cloud-based. Xero was selected as the product of choice from a number of options. Xero is an accounts package, but instead of being server or desktop install based, it’s available through a webpage. Finance Box holds Xero’s migration specialist certification and so we put in place a plan to migrate from Sage to Xero.

Having online systems, it meant we could connect real-time bank feeds and run more up to date information so that decisions could be made in real time. Faster systems meant we could keep an eye on new creditors and manage payment runs effectively.

Online systems allowed us to create key management reports so that finances could be reviewed accurately and by all necessary stakeholders.

Slowly but progressively we generated budgets and forecasts that helped management see the bumps in the road in the future. This allowed us to help them make decisions earlier with a view of navigating around the problems.

We lifted all of this burden from the management of the organisation so that they could focus on running the operation and keeping new sales coming in.

What's life like for the client now?

It's been a 6-year journey for this client, but today we see them making healthy profits and positive reserves. The CVA was settled early, they survived COVID-19's disruptions and today they look1 forward to growth of a wider brand with new investment and plans.

Cash flow is still managed in a similar way to how we started - more through good habits and processes than necessity. It's practices like these that support the new investment and help the client avoid issues like they faced in the past.