Jade Financial Management

Jade will be pleased to provide a comprehensive range of business financial management services, individually or packaged according to clients’ requirements. The more usual services are shown below. In some cases Jade can advise and train clients’ staff to carry out the tasks. First and foremost Jade will work with clients to achieve specified requirements. However when it appears to us that other actions may be appropriate we shall draw clients’ attention to these.

Initial

Initial meeting with directors/proprietors to consider requirements (no fee for first hour)
Review of business to confirm viability and create proposals for financial management
Discussion with directors/proprietors on proposed actions

Planning

Jade can substantially assist with the formal Business Plan setting down the relevant criteria under which the new concern will operate including:-

Detailed description of the idea(s)/project(s)

Who will direct/manage the business

What volumes and values of sales are projected and when they will be achieved

What resources (people, premises, equipment etc) will be required, when and at what cost

What permissions will/may be required to allow the business to operate

Financial projections incorporating projected sales, costs and resultant profit/loss

Projections of cash required to start and develop the business including observation on likely sources.

This planning stage will also require discussions and agreements with external parties including banks, solicitors, surveyors, insurers etc. Input from Jade may be essential.

Setting up

Financial structure of the business. Identify, to the extent not already established in the Business Plan :-

Resources required – identify in detail the staffing, premises, equipment and other assets, including timing, location and cost
Sources of cash and other funding and the cost of these
Detailed budgets for both revenue and capital
Cash Flow Projections

Business Finance

Set up bank account(s) and get finance in place as applicable - cash, grants, bank overdraft facilities, loans, asset leasing arrangements, venture capital etc.

Business Assets

Acquire what is necessary, affordable and within established criteria and budget:-

Premises – commitment should be for no longer than can reasonably be projected in trading terms and it is possible best option may be very short term accommodation. Avoid onerous leases.
Plant, equipment, vehicles and IT hardware & software – obtained as and when required ensuring only what is necessary rather than desirable, eg expensive cars. Ensure most appropriate financing relevant to the business and avoiding onerous terms.
Initial Stocks of raw materials and components as applicable

Staffing

Recruit and induct key operational and sales staff

Create and organise finance function, suitable to the size and type of business:-

Recruit and train staff as applicable, (the finance function of small businesses will often be carried out by the proprietors) see below
Acquire suitable business and accounting software and computer hardware
Establish accounting systems and routines to suit the business
Written instruction on required accounting and administrative procedures to include basic accounting routines, “checks and balances”, reconciliations, Credit Management, internal control
Ensure systems are compliant with requirements of Inland Revenue, Customs & Excise and other regulatory bodies

Establish optimum levels of stock and work in progress, if applicable
Registration with Inland Revenue and, as applicable, with Customs & Excise and any industry-specific regulatory body.
Discussion with suppliers, banks, solicitors, surveyors, insurers etc leading to suitable, cost-effective arrangements with each.
Assistance in dealing with formal agreements from suppliers and others and in drafting agreements with client’s customers.

Financial Staff Recruitment & Training

Establish with client the structure and budget cost of the finance department as applicable together with job specifications for the people who may staff it.
Obtain and interview suitable candidates and present short list to client for final interview and approval. To include from internally and/or outsourced as appropriate.
Engage on behalf of client approved candidates and introduce to business.
Establish and provide as necessary suitable training and induction, both initially and ongoing.

Ongoing

Monthly management accounts with explanations and commentary
Monitor actual performance against business plan and budgets, reforecast where necessary.
Annual budgeting.
Annual accounts.
Review and advise on effectiveness of accounting, systems and controls
Advise commercially on dealings with customers, suppliers, bankers, solicitors, insurers and others. Liaise with these as required.
Review current business operations with client and recommend actions where appropriate, see Focus on profit and Focus on Cash and Credit Management.
Other financial management techniques, such as Resource Utilisation, Business Health Checks and Asset Management & Security.

Development

Strategic planning – longer term plans for expansion and improvement

Financial modelling for “what if” scenarios.

Feasibility studies – will a proposed product or venture be profitable?

Having been set up and brought into continued profit, the directors/proprietors may well want to develop the business so as to increase its profitability and worth. It may be possible to achieve this by:-

Indigenous growth within the business by increasing the range of products/services and/or by increasing the number of outlets through which they are sold.
Growth by acquisition of other businesses, usually which either have similar products or alternatively whose products are complementary to those of the existing business.

These developments require much consideration and research as to their real benefits – many businesses have faltered at this stage because the directors’ attentions have been diverted to the new ventures, allowing existing operations to deteriorate. The acquisition of a business by purchase can be particularly testing, especially in its valuation and price, legal agreements and post acquisition performance.

Jade can assist and advise on the various aspects of these developments.

Sale of Business and Exit strategy

There will be various possible reasons for one or more of the directors/proprietors ceasing to be involved in the business. These fall into two categories, normally the first but occasionally the second:-

Voluntary, for example Sale due to:-

Retirement
Desire to do something else
Simply wishing to cash in the investment

Forced, for example:-

The untimely death or serious illness of one of them or one of their dependants
Failure of the business due to poor trading, losing an expensive court case or prosecution by an external authority for an offence or failure to comply with regulation.
Ousting a director by his fellow directors or sharholders due to disagreements or hostile acquisition or insistence by a backer.

It is important in every business for the directors/proprietors to have an exit strategy. This should recognise all of the above cases and make provision accordingly as far as is feasible. Voluntary departures should be addressed early and in comfortable time so that they can be achieved in as beneficial manner as possible. A proprietor will usually have some plan of when to retire - best to properly plan and execute a sale at good value rather than allow the business to disintegrate on an unplanned departure. Depending upon the size and value of the departee's investment in the business substantial tax savings may be available providing the departure is properly planned.

Forced cessation might not be avoidable but the unfortunate affects may be lessened by suitable insurances and/or very sound management and systems.

Jade is able to contribute substantially to the planning, systems and management by which departures from a business are achieved as beneficially and with the least disturbance possible.

Focus on Profit - Review

A business needs to produce profit unless of course it exists as a pure hobby. Jade helps to provide that focus, not only by creating accurate measurement of profit actually being made; we also look closely at the business activities which are or are not really viable. We examine the costs of a business to identify possibly unnecessary expense and waste.

Focus on Cash - Review

If a business intends making profit then that profit is probably of little value unless it also generates cash for the proprietors and for future development of the business. Perhaps the business has a cash flow problem. Maybe it is in danger of running out of cash and being forced into receivership. Jade understands and can advise on various methods of maximising cash generation.

Credit Management

This area is critical to cash generation. Simply it is about ensuring that a business gets paid for the goods and/or services it sells. Jade has considerable experience in credit management and in its three critical areas:-

Vetting customers as to their ability and preparedness to pay.
Creating systems for ensuring as far as possible that goods/services are delivered according to the customers' requirements and at the agreed price. This includes formal terms of business agreements.
Debt collection techniques ranging from simple telephone calls and e mails through to court proceedings and bailiff action.

Resource utilisation

Allied with costs examination Jade considers the resources available in a business (people, premises, equipment etc) to identify the most productive uses of those resources. This can lead to increasing output and/or reducing costs.

Business health checks

Jade can review a business in terms of its financial stability and viability, correctness of application of PAYE and other tax rules and compliance with VAT requirements. Such reviews are naturally confidential. All reviews undertaken will be carried out to our highest standards and a report provided to the client on the findings and recommendations, including any reservations which may apply. However no guarantee or warranty attaches to this work and no responsibility or liability is accepted by Jade for any claim by the client or any other party.

Asset management and security

Tangible assets are those with physical form, such as premises, plant and machinery, tools, furniture and equipment, computer systems and equipment, stocks and work in progress. These assets have two common features – they have a monetary and practical value, they are also vulnerable to various risks, such as fire, theft and vandalism.

Insurance is an important requirement of business which is usually put in place from the outset and reasonably maintained. However insurance can be very expensive and in any case will rarely compensate for the inconvenience and distress caused by a significant loss. Some losses are largely uninsurable such as stock inventory losses.

Jade can assist with systems of management, control and security of these tangible assets which can significantly reduce losses attributable to the above risks. The benefits of this could be:-

Reduce the level of risks and the incidence of individual losses.
Reduce the cost of those losses both in monetary and in distress terms.
Reduce insurance premiums due to fewer claims and demonstration of improved security and controls.

Business/Financial Problems – Diagnostics and Solutions

Some Businesses do not succeed - fact.

They may be making inadequate profit or even losses.

Even if they are profitable they may still be running out of cash and have the bank and other creditors knocking on the door.

They may have lost a major customer or a key supplier or staff member.

Or they may be in an already challenging industry in which all but the most efficient do not survive.

The correct diagnosis of the problem itself is frequently not obvious let alone the underlying reasons. Jade can assist and advise here. More importantly Jade can work with the proprietor to identify and implement practical solutions.

Like some illnesses the early diagnosis of the problem can be vital so that the business can be put back on track before it is too late.

Interim Management

Unfortunately major problems can befall the financial operation of a business. A serious fraud occurs, an official investigation by Inland Revenue or Customs & Excise is launched concerning alleged under payment of tax etc or the finance director has eloped with the call centre manager. These things do happen and they can cause much disruption in the short to medium term possibly jeopardising the entire existence of the business.

Jade can provide interim financial management solutions to help the business recover.