Challenge: Accounting System Conversion
This medium-sized, professional service business was preparing to implement a new accounting system, which would address all of the organization’s financial information and business operations, including accounts receivable, accounts payable, payroll, and time keeping functions. When CFO for Hire first met with the client, the client’s understanding was that the system would ‘go live’ in the immediate future, as they believed the system was 90% ready. Upon examination by CFO for Hire, it was determined that the system was significantly deficient. Rather than going ‘live,’ the system needed a complete overhaul to match the business model and the financial accounting needs of the organization. Further, it was discovered that the financial picture of the organization had serious omissions and errors. An additional mitigating factor was the recent departure of a business partner, who had been largely responsible for the design and implementation of the new accounting system. Accounts receivable was at one time overstated by as much as hundreds of thousands of dollars; accounts were not set up and balance sheet accounts were not reconciled.
CFO for Hire’s initial work involved discerning an accurate representation of the client’s finances. Also, the client required a thorough analysis of their proposed new software system to determine if it would in fact accomplish their objectives of moving from a cash-based to an accrual-based system.
CFO for Hire accomplished the following:
• Balanced cash accounts and reconciled current system’s data
• Developed system procedures for accounting practices
• Established time keeping and departmental efficiencies
• Set up new productivity models
CFO for Hire helped the client avoid a certain failure of their new accounting system which was not properly designed according to the client’s actual needs and business model and, initially, was about to go ‘live’ with a misrepresentation of the client’s true financial data.
The client continues to seek the input of CFO for Hire for cash management, account reconciliations, financial consulting, and ‘fine-tuning’ of their business and accounting processes and systems. Future goals include new productivity models, acquisition analysis, upgrading the systems to accommodate additional resources, and determining cash-basis statements each quarter.