From expansion overseas to preparing the business for sale, we stood by a recruitment agency as they looked to change their financial habits…
Having enjoyed a successful first ten years in business, a recruitment agency based in the South West reached a point where sound financial management had become critical to sustainable growth and an eventual sale.
The company knew that fiscal controls were limited at best. However, without a Finance Director in place, they were unsure where to start. Additionally, the directors realised that few buyers would approach them if they couldn’t prove how well their books were balanced.
Clarity was the main force behind our initial discussion. The recruiter wanted to hear things laid out precisely, in language they could grasp. Our founder Rob was more than happy to help them put financial concepts and implications in terms they understood.
This was especially important as the business dealt with clients overseas. Processing payments and currency from foreign clients was a mystery to the agency and proving to be a stumbling block in efficient operations. So was managing payroll and tax for contractors and full-time hires that were working for an employer abroad. Payment structures can vary from country to country. All of it had to be brought under control.
So, it was a double-pronged challenge: make the financial model of the recruitment company more efficient, and more attractive to buyers as a result. That was the brief. The action plan turned out quite differently…
RJF were hired for three days a week to fulfil the role of Finance Director. First, we had to build their foundations for the financial management of the business back up. That took in collection techniques (credit control and collecting money from clients who owed the company), who was responsible for what, and stipulations we could deploy for future recruitment contracts.
Bill payments were improved, and RJF’s investigations found hundreds of thousands in floating revenue due to unresolved invoices that we were able to recover. We acted as the agency’s very own finance department and, by the end of our two-year tenure, we oversaw the creation of a full, in-house finance team – around 10 people in all.
Further surprises were in store. Partly due to our influence, and partly because of the 2015 downswing for oil and gas (the client’s main business sector), they changed their mind about selling. Instead, expansion was pegged for branches overseas. Being now in good financial shape means that they have the opportunity for both.
We’re here to do the same for you. Speak to RJF Accountancy for your own, no-holds conversation on finance and business leadership, and discover what new avenues we can unlock.