Mr A contacted us after a conversation with his IFA, he needed funding to launch a new product and the finance company had asked for Management Accounts, forecasts and product costings. Mr A employed a part-time bookkeeper to keep the accounts up to date and to run the payroll, but he’d never been given Management Accounts and didn’t know how to create forecasts and costings.

We have worked with the IFA and the finance company in the past so they knew we could help Mr A.

We started by looking at the accounts as the bookkeeper had entered and noticed a lot of personal expenditure was being costed to the P&L and not to the Directors Current Account, this was making their profitability appear too low to manage the proposed repayments required on the funding. We analysed the expenditure for Mr A, and it was evident that he wasn’t drawing enough to live off and so was paying for personal bills through the business. We re-coded the expenditure to the correct place, on the balance sheet, and generated the management accounts that the finance company required.

Discussing the correct salary to draw was next on the list, asking Mr A to look at his personal expenditure and determining how much he and his family actually needed to live on was the starting point and increasing his salary to cover these. By adjusting the P&L it was evident that the company was making a profit and Mr A could vote himself a dividend at the year end, making his personal income more tax efficient.

We then started working closely with the design team of the new product, sat in on meetings, asked questions to determine costs, creating with them, workable budgets and determining if there was the possibility of claiming some R&D tax credits. We introduced Mr A to one of our referral partners who specialised in R&D and indeed he was able to make a claim. Being able to understand and interpret the financials for Mr A helped him decide to pursue the new product and having a suite of reports available for the funders made the process as smooth as possible.

Mr A has successfully launched the product and sales have increased month on month. The work that we carried out not only assisted with the product launch it assisted Mr A in knowing and understanding his own personal numbers and more importantly his business numbers, thus enabling him to make sound business decisions based on fact.

He has since engaged us to complete quarterly Management Accounts and to also sit alongside his design team during product meetings to bring a financial buddy to the table.