As a management tool timely production of monthly management accounts helps make informed decisions on both the past performance and helps to anticipate future problems that lie ahead. The poor sales in one month will ultimately have a detrimental effect on cash flow in future months as excessive sales will also have implications.
It is not only important to understand the effects of the financial performance of the business but to measure efficiencies against budgets. It is often said that any budget or forecast is out of date immediately it is agreed. Likewise a constantly moving budget does not give any structure to planning. It is therefore important that when measuring performance against budgets the information is relevant and often refers back to the strategy and planning agreed.
Cedar offer both preparation and analysis of monthly management information and review these figures with clients on a monthly basics. This identifies areas of concern and highlights future planning and development issues. From these meetings targets are set and monitored for future periods.
The monthly management accounts are also supplied to lenders who request these as part of their security. These reports can be especially useful when produced by someone not directly employed by the business as they are able to offer impartial conformation of the figures. Because every business is different a short explanation as to why something has changed in the figures can provide comfort rather than questions if supplied in isolation.
On occasions there is an event which requires “Crisis Management” We have put together a team who are able to respond immediately to this type of event. If you are an existing client Cedar Business Solutions will have built up a strategic plan for this type of eventuality and be able to respond quickly and with good sound knowledge and judgement.
However on occasion the reason there is a crisis situation is that a business has not considered this eventuality and no plans are in place. As an example, A business is an owner managed business with all key decisions made on a day to day basis by the Managing Director. The 20 people employed by the business do not have authority or knowledge for the financials of the business. The Managing Director is taken ill and will be off work for a number of weeks. The business needs to continue making decisions but the key decision market is not available. “Crisis management” allows someone with authority and experience to maintain the business whilst the Managing Director recovers. They are able to record what needs to be done and depending on the authority give implement things if required.
We have a number of clients who we meet on a quarterly basis to retain knowledge of the company’s performance and key personal. It also allows the Director to share his plans and vision often months before his staff are aware of planned changes. In most cases we are at the end of the telephone when they take holidays to liaise with the business if required if there is a critical action required in their absence. It not only helps provide a strategy for “Crisis Management” but also piece of mind for holidays and time away from the office.
It is often misunderstood that all mergers and acquisitions are completed by large corporate businesses. There are numerous deals completed every month. Many of these are done quietly and confidentially.
One of the key elements of such deals is that the management do not get distracted from the day to day running of their business. Cedar provides the external solution to this problem by acting with clear instruction during what in some cases can be a long process.
We tailor every deal to the client and make sure that expectations are realistic from both parties. When required we will also remain involved in the business to see the deal through for a period post completion.
Where additional professionals are required we will help in instructing them and negotiating fees as required to provide value for money wherever possible.
All businesses in one form or another require finance at some time. This can be a simple as investment from the shareholders to formal banking facilities.
Our experience tells us that correctly funding the business has the biggest single effect on any business. If you are short of cash in the business decisions are made with this in mind all of the time. If you have surplus cash it is important to manage how this is used for the benefit of the shareholders. As in some cases a double tax liability can be created
Below are some of the finance options available
Traditional Bank Loan
Letters of Credit
Plus a number of other options. If you would like further information please give us a call.
When a business is leant money by a bank or individual one of the many items discussed is the security offered for the injection of cash. Unfortunately although advise is normally given when documents are ready for signing and there are no options left the security requested and that available are not always identified early enough for all parties to consider their options.
When a Director is asked to invest further funds into the business to secure further support from his bankers it should always be a consideration if the company is able to provide the Director with security for the investment. At the time of the money being introduced there may not be any tangible security available but this may change and if the correct procedure is not completed when the investment is made security will be less effective in the future.
We would urge all Directors to make sure they understand both their current responsibilities and security arrangements and to review these at least once per year.
Her Majesty Revenue & Customs are now insisting almost all communication with them is done on-line. Likewise it is now possible to view your personal and corporate information on-line providing the appropriate security access has been completed. Although we encourage all clients to be responsible for the accuracy of information supplied to HMRC we are happy to complete the filing on line for you using the latest software.
Planning for the future in any SME business is one of those jobs that is always put at the back of the queue. We spend years building our management team and often forget the value they bring to the business. Likewise when we come to replace them we are surprised by how difficult it is to find a suitable candidate.
The same can be said for the future ownership of the business. Is there planning in place for either the next generation of ownership or a sale pre or post retirement. The value of any business is subjective but if the return can be achieved for the owners by carful planning this is much better than having to take the only offer on the table.
The time and cost involved in buying or selling a business often has a much larger impact on the business than is expected. No purchaser wants to find that the first few months of trading after acquisition is well below expectations. But this is often the case with Key people from both sides spending time on the “deal” rather than continuing to run the business. Cedar Business Solutions are able to assist on either side of the transaction taking on the work required for the Due Diligence by either side. This allows the deal to happen without hours being spent in meetings with solicitors and the other side. It also allows for information to be filtered carefully so that there is no ambiguity involved when questions are asked.
It is often underestimated how much the costs of both a sale and purchase will final end up costing both parties. There are three key steps that will help to manage costs.
Firstly agreement from both sides what they are buying and selling. What is included and excluded and on what basis this transaction will complete or fail.
Secondly what is the consideration price? Again this appears to be a simple question but one that often is confused by events. Having agreed the price an agreement what events will affect this in the Due Diligence process.
Thirdly a detailed heads of terms document setting out clearly each parties understanding of what is agreed and what is subject to negotiations. Only after this is agreed should formal contracts be drafted. It is also at this point that fees are confirmed as up to this point both parties should have been responsible for their own costs and advise.
A fair equitable deal is always easier and cheaper than a contentious one sided deal. Although on occasion the process can be very quick, it often will take weeks and sometime many months for a deal to be finalised. The longer the deal takes the more costs that are ensured as information has to be confirmed and re-confirmed more than once.
If you would like to explore the purchase or sale of a business with us we will be happy to explain the process and provide a valuation if required. We also have access to funding options as required.