Rebuilding the Finance Function

Case Study: Rebuilding the Finance Function for a PE-Backed Consumer-Focused Business

Challenge

During an interim assignment for a private equity (PE) backed consumer-focused business, the finance function had lost all credibility, presenting a serious risk to the organisation’s stability. Several critical issues had emerged:

• Loss of control over ledgers: Debtors were mismanaged, resulting in a significant and ageing debt liability. Despite having ample cash reserves, the finance team consistently failed to pay suppliers on time. This created reputational damage and strained the company’s supply chain.
• Missed deadlines and inaccurate financial data: The business faced challenges with meeting key accounting deadlines, including year-end filings. Inaccurate financial reporting had also eroded trust with the company’s bankers, further compounding financial risks.
• Internal disarray: Financial information was both difficult to obtain and frequently unreliable. As a result, department heads resorted to creating their own financial data, leading to discrepancies and confusion, and distorting the overall financial picture.

Solution

NorthCo was engaged to rebuild the finance function entirely from the ground up, and this involved:

• Key hiring initiatives: We recruited crucial roles, including a Finance Director (FD), a Financial Controller (FC), a Financial Planning & Analysis (FP&A) Manager, and several core processing staff. Each position was filled with experienced professionals with a track record of managing challenging financial environments.

Outcome

Within three months, the following milestones were achieved:

• Finance Director (FD): NorthCo recruited a highly experienced FD who brought strategic financial leadership to the business. This new FD led efforts to reintroduce robust financial controls, spearheaded improvements in financial reporting, and rebuilt trust with internal and external stakeholders.
• Financial Controller (FC): The FC took charge of revamping the entire accounting process, focusing on accuracy and compliance. They introduced systematic financial reporting procedures and improved the timeliness of monthly, quarterly, and year-end financial reporting.
• FP&A Manager: We appointed a capable FP&A Manager to overhaul the company’s financial planning and forecasting. By implementing advanced financial models and conducting thorough performance analyses, they provided invaluable insights into business performance, supporting strategic decision-making.

Outcome Summary

Through strategic hiring, process improvements, and tighter controls:

1. Restored credibility: The finance function regained the trust of key stakeholders, including investors, suppliers, and bankers.
2. Timely and accurate reporting: The business met all critical accounting deadlines, and the finance team began delivering reliable and accurate financial information, eliminating internal discrepancies.
3. Strategic insights for growth: With the newly formed finance team in place, the business was equipped with actionable insights and financial clarity, empowering leadership to make informed decisions that supported the company’s growth objectives.

NorthCo’s intervention stabilised the finance function, transforming it from a weak link into a strong foundation for the company’s future growth and success.