Navigating Financial Complexity to Secure Investment

After a thorough financial overhaul, including uncovering $4 million in recoverable assets, the company secured $20 million in investment. This restored investor confidence and set the stage for future growth.

Problem/ Challenge

A business with a sprawling operational structure, including multiple POS systems and intricate revenue-sharing agreements across several states, faced critical financial disarray. The compounded challenge of inaccurate accounting for nearly five years, compounded by the complexities of two strategic acquisitions, left the company's financials in a state of chaos. The existing financial records were riddled with errors, including:

These issues severely undermined investor confidence, stalling the company’s efforts to secure essential funding for expansion.

Thanks to their expert guidance, we regained control over our complex financials and restored investor confidence, leading to a successful funding round and a solid foundation for growth.

Patrick Jensen

Founder

Solutions

Our intervention was multi-faceted, addressing both the immediate need for auditable financials and the long-term requirement for a sustainable accounting framework. The solution involved:

Establishing a parallel accounting system from the ground up to bypass the unreliable original books. This required over 1,000 hours of forensic accounting work to piece together accurate financial histories.
Collecting and analyzing financial statements from more than 20 banks and financial institutions, as well as liaising with over 100 business partners to reconcile past transactions.
Implementing a stringent reconciliation process that led to the discovery of significant financial oversights, including $4 million in recoverable revenues and assets.
Renegotiating terms with over 50 vendors after identifying consistent overpayments, leading to a 15% reduction in operational costs moving forward.

Download the comprehensive case study to delve deeper into the data-driven decisions and gain valuable insights into the strategies and solutions that drove success.

Results

The restructuring and outsourcing strategy bore immediate and tangible benefits

Financial Recovery

The detailed audit and reconciliation efforts uncovered $4 million in previously unaccounted for revenue, security deposits, and recoverable assets. This not only bolstered the company’s balance sheet but also played a pivotal role in restoring investor confidence.

Cost Reduction

The renegotiation of vendor contracts and rectification of past overpayments translated into an immediate cost savings of $600,000 annually, significantly impacting the company's profitability and cash flow.

Auditable Financials

The creation of a new, reliable set of financial books enabled the company to present a true and fair view of its financial position, meeting the rigorous standards required for auditing and investor review.

Investment Success

With the financial overhaul complete, the company successfully raised its next round of funding, securing $20 million within three months post-intervention. This was a direct result of the newfound confidence in the company’s financial integrity and operational stability.

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