Industry
Primary: Transport, Postal and Warehousing
Key Contribution
Improved multiple systems’ performance and interface to the General Ledger, provided better quality and more timely information and worked closely with Management and the Board to better understand their business and focus on addressing key issues and opportunities to move towards a more sustainable business model.
The Business
The Group was involved in fixed wing and rotary wing maintenance, repair and overhaul (“MRO”) throughout the Australasian region, and aircraft and parts sales globally.
The Challenge
The accounting and financing part of the Group’s business was complicated by the number of different organisations and activities which included inter-company trading and offshore trading with significant foreign exchange exposure. The Group went through high growth, increasing its size by one third, in an 18-month period which placed increased pressure on existing resources and capabilities.
The Assistance Required
Pressure on the Group’s resources and capabilities led to an independent review of the business by a leading Accounting firm which identified several critical issues including:
-
Inexperienced Finance Resource delivering poor quality and untimely financial reporting with no management insight provided; and
-
Consequently, neither Management nor the Board understood the business’ true performance or financial position in terms of having enough working capital to pay Creditors and the ongoing operation of some unprofitable business activities.
The Approach
Management and the Board engaged on contract a senior, commercial Chief Financial Officer (“CFO”) for the Group with strong service business experience and the right personality to work effectively at all levels in the organisation to:
-
Support, direct and mentor the existing Finance Team to deliver better quality and timelier reporting of the Group’s monthly and annual financial results; and
-
Work as an enabler driving significant change (i.e. key project deliverables) across the total business.
The set of tasks and goals to achieve changed over time which required a clear understanding of the need for and ability to adapt to the changing needs of the business.
The quality control process used within this engagement to ensure that the contract CFO was working well within the business and delivering the agreed outcomes was well understood and received by Management given the Group is a certificated quality organisation. Management appreciated the simple and informal contact throughout the engagement and appreciated the limited time commitment to participate.
The Results Delivered
The engagement ran for almost 12 months which was longer than Management and the Board envisioned but was necessary to establish the systems and processes to give the business the robustness it required.
Key results delivered during this engagement included:
-
Supporting, directing and mentoring the existing Finance Team to improve current accounting processes and practices, moving the organisation towards best practice;
-
Identifying, addressing and significantly improving the interface between the Group’s operating/transactional systems and the General Ledger reporting system;
-
Significantly improving the quality, integrity and timeliness of the Group’s monthly Management accounts and completing comprehensive and accurate annual Financial Accounts for the Group;
-
Implementing a transitional Finance Structure to meet the needs of the business going forward and providing a comprehensive and successful handover to the permanently appointed CFO;
-
Developing a comprehensive and seasonalised Trading Budgets model which produced significantly improved Trading Budgets;
-
Introducing a formal Work in Progress (“WIP”) review process that cleaned up and significantly reduced the Group’s investment in WIP;
-
Progressing the consolidation and simplification of the Group’s existing legal and financial reporting structures;
-
Developing and implementing a monthly Board Reporting Pack which met the information requirements of both Senior Management and the Board;
-
Working effectively with the Board and other Key Stakeholders in focusing on key issues and opportunities to be addressed in moving towards a sustainable business model.
“The personal deliverables throughout the engagement were delivered by the contract CFO to a very high level. He understood the business well and was able to offer a number of significant benefits to us, particularly in understanding the financials of the business and how best to report them through to the Board”.
Chief Executive, Aviation Group
