The Client
This e-commerce retailer selling gourmet, international food and beverage items was established in 2014 by a husband and wife team. Thanks to a strong market for their products and assistance from external investors, the company now has $6.5 million in annual revenues and 13 employees.
The Challenge
The retailer has grown rapidly since the business was established, with an average annual growth rate of more than 200 percent. However, their explosive growth was causing some operational challenges. The company’s owners found themselves wearing too many hats, including trying to operate in a CFO capacity by handling most of the financial and accounting functions themselves. The president was spending his time and resources on bill pay software through their bank but did not have adequate insight into what expenses those cash disbursements were paying for. Plus, they did not have a consistent view of their sales transactions, resulting in a lack of valuable insight into why products were trending in a particular direction.
At the same time, the company was experiencing poor customer service from their accountant. They had engaged their accountant to provide a year-end compilation, but found they were a low priority relationship for the accountant and were having to wait an excessive amount of time for the compilation – leading to some friction with their external investors who were expecting timely financial statement data.
The Solution
The retailer was introduced to Kreischer Miller by one of their investors, and they decided to engage us to provide outsourced accounting and finance services. Our team quickly set the company up on QuickBooks Online and developed a solution to accurately report monthly accrual basis income and accounts receivable rather than cash basis income from data obtained from third-party e-commerce software systems. We also established processes to monitor bank transactions on a regular basis as well as to verify the accuracy of orders and invoices.
The goal of establishing these processes was to provide more accurate and timely data and a better handle on cash flow so they were in a position to make more informed business decisions. Monthly financials are now available the first few days of the following month, with minimal input from management. Proper approvals and segregation of duties are now in place. And, the president no longer has to log on to bank software to make payments to vendors, as payments can be scheduled directly through their bill pay software, which is available as a mobile app with all bill information easily visible prior to making payment.
Plus, by having Kreischer Miller involved on a regular basis, as opposed to only once a year to produce compilations, we are better able to spot potential issues before they become a problem and also make recommendations on ways to enhance the business.
The Outcome
Owners running a new business often find themselves wearing too many hats. Add in a rapid level of growth during the company’s first few years, and the owners can quickly find themselves in reactive mode with their hair on fire, running from one issue or task to the next.
Thanks to working with Kreischer Miller and our outsourced accounting and finance services, this retailer is now more organized, and the owners can access much-needed information more quickly, allowing them to make more proactive business decisions and provide financial statements to their investors more quickly. Knowing that their accounting and finance function is running smoothly, the owners can now focus on growing and building their business for the long-term.
For many companies today, outsourced services for accounting and taxes simply make more sense than in-house endeavors. Allow our team to be a part of your team – reach-out to us today and let’s have a conversation.