New model for Accounts and Finance

Overview

Champion and Belmont Packaging have worked together for a number of years. So when Belmont decided to embark on a company wide improvement programme, it seemed the natural thing to involve Champion when considering improvements to its accounts function.

The company pride themselves on working as efficiently as possible, but felt their accounts and finance function could be better managed and organised. Champion’s brief was to create that improved accounts and finance function within the business.

The work carried out has cleansed and upgraded the company’s day to day management information, enabling the company’s management team to use the clear and accurate figures provided by Champion, to make business decisions and drive the company forwards. The second benefit has been the transferral of the financial management to a trusted partner.

This case study outlines how this ‘out-sourced’ finance model was developed and adapted to meet the client’s needs. It also underlines how, when trust and mutual benefit are established, a radical new way of working can evolve.

The Brief

The company first needed its accounts programme and practices updated, and to generally make improvements throughout the function. The old system was out of date and inefficient, so Champion installed and implemented a new financial solution, Sage (Line 50) Financial Controller. Champion then transferred the existing balances over, which created a clear picture of the overall financial situation of the business.

Using Sage to interpret the figures, a number of problem areas were highlighted and dealt with accordingly:

• Customers records were cleansed, debts chased and monies collected. Debtor days were reduced from 95 to 70 and brought in line with agreed terms.
• Suppliers were notified of system changes. Strict new procedures for payment were put in place. This resulted with increased creditor days as supplier confidence grew.
• Automated bank systems were introduced and a simple banking structure was created. Adopting this method made cash flow management easy.

This was all achieved by systemisation - regular statements, remittance advice notes, chase letters, legal letters and on-stop notifications. Where possible these were sent out electronically to cut costs and improve efficiency.

These improvements have resulted in a substantial increase in cashflow for the business.

As a result, Champion have been able to develop a clear and accurate set of monthly Management Accounts, and from the client’s point of view this financial information is essential. Mike Moloney, MD at Belmont Packaging comments,

"We had always worked with monthly management accounts but felt the information could be better presented with more useful detail, to assist in the effective management of our business."

As a consequence of the work carried out by Champion’s Management Accounts team, Belmont decided to engage Champion and take the unusual step of handing over full responsibility for the entire accounts and finance arm of their business on a permanent basis.

Making It Work for Belmont

The team at Belmont operate an open communication policy throughout the factory, and the culture is built around team work. As a result, we as ‘outsiders’ at Champion had to integrate within the company, and adapt our product to fit into their business. This integration was only achievable with a high level of trust between client and provider, and the full support of the management team.

Champion’s Simon Blackburn, team member responsible for managing the project at Belmont Packaging comments:

"This is not simply an ‘out-sourcing’ product but a service offered that becomes an integral part of our customer’s operation. The way we implement the product is flexible, and we had to adapt the way we work to suit Belmont’s business philosophy and working practices"

This bold move to bring in an outside company to control the accounts and finance arm has proved to be a success. Mike Moloney, MD at Belmont Packaging comments,

"This may be a radical approach but I believe the combination of inside and outside knowledge and expertise is a fresh mix that works for us. Champion are now part of the day to day working and the strategic thinking at Belmont Packaging. Isn’t that how the customer/accountant relationship needs to be for the future?"

"This approach works for both customer and provider. The fixed fee arrangement encourages fresh thinking and drives efficiency."

As a result of this trust relationship between accountant and client, Champion have been able to develop this product into a business-model that can now be rolled out to other SME clients in a similar situation, and they are fully aware of how Belmont have been the catalyst of this development. Simon Blackburn comments,

"We didn’t know what to expect when we set out on this project, but the end result is that we now have an opportunity to go out and demonstrate how this model can help other businesses. We can use our experience at Belmont to push this out to other SMEs, and also evolve the model even further which is great news for us and clients."