Financial & Operational Transformation for a Legacy Manufacturing Business
Situation
The client is a 75-year-old manufacturing business under new ownership. Upon acquisition, the Accounting & Finance department lacked the leadership and infrastructure needed to support the new owners’ vision. The existing Controller was not the right fit for the business going forward, and the only other team member in the department had no formal accounting or finance background. Leadership had limited visibility into profitability, both at the company level and at the project level. Financial statements were poorly organized, spanning over seven pages each, and the chart of accounts contained more than 1,350 GL accounts. There was no formal month-end close process, no cash flow forecasting, and no KPIs in place.
Approach
We began by immersing ourselves in the daily operations of the business for 30 days to fully understand the accounting and finance function. From there, we made the necessary personnel change and immediately focused on developing the remaining team member, helping her understand the purpose behind her daily activities and what the numbers meant. We drafted a formal month-end close process and trained her on account reconciliations and closing procedures.
We then turned our attention to the financial statements. We consolidated the chart of accounts from over 1,350 GL accounts to approximately 400, reducing both the Balance Sheet and Income Statement from seven-plus pages to two pages each. We cleaned out legacy data from the prior ownership to establish a clean starting Balance Sheet and Income Statement as of the acquisition date. We also conducted a physical inventory count and became the internal resource for the company’s ERP platform, routinely fielding questions from long-tenured team members.
With a reliable financial foundation in place, we began preparing weekly cash flow forecasts based on AR collection rates, planned AP payments, and recurring overhead items. We established KPI dashboards that included both leading indicators and trend analysis, partnering with a developer to build direct data feeds from the ERP. We also created a Margin Summary template used to guide pricing strategy and facilitate constructive coaching sessions during weekly production meetings when project-level targets were missed.
Results
- Necessary personnel changes made and remaining team members developed into capable contributors
- Clear visibility into monthly overhead and the gross profit threshold needed to achieve profitability
- Weekly cash flow forecasting process implemented and maintained
- KPI dashboards with leading indicators and trend analysis delivered through direct ERP integration
- Chart of accounts consolidated from 1,350+ to approximately 400, producing clean, readable financial statements
- Legacy data cleaned and accurate financials established as of the acquisition date
- Margin Summary template driving pricing strategy and accountability in weekly production meetings
- Internal ERP expertise established, reducing reliance on outside support
The business transitioned from limited financial visibility under new ownership into a well-organized, data-driven operation with the infrastructure to support informed decision-making, accountability, and continued growth.
