At Rodewald Consulting we handle a number of company financial turnaround assignments each year. The majority of these assignments are at the request of the company lenders.

In the main, the financial issues have been caused by failures in management and governance.

A number of common issues that arise include:

  1.  A lack of proper financial reporting on a monthly/annual basis.
  2. A lack of understanding of how a company structure actually works.
  3. A lack of working capital.
  4. A failure to properly identify the cost of individual components.
  5. A lack of proper planning, including identifying or forecasting likely taxation payments.
  6. Relying on one or two key customers.
  7. Not understanding the difference between governance and management.

The first signs that indicate financial issues exist often includes:

  1. A failure to pay PAYE or GST on time.
  2. Filing GST returns seeking refunds (except export businesses).
  3. Regularly requesting increases in bank overdraft limits.
  4. Increasing levels of accounts payables.

Secondary signs of financial issues:

  1. Creditors issuing statutory demands.
  2. Creditors requesting cash on delivery.
  3. Lenders refusing further increases in overdraft limits.
  4. The IRD refusing to enter into any compromise.

Standard Fixes:

  1. Identifying a suitable advisor in the governance area.
  2. Identifying improvements and implementing these into management and financial reporting systems.
  3. Negotiating debt terms and conditions.
  4. Identifying marketing opportunities.
  5. Identifying cost efficiencies.
  6. Identifying potential add-ons to the business.

Early EarlyEarly

Seeking expert advice at an early stage increases the likelihood of a successful financial turnaround.

For further information please contact Tom Rodewald on 021 2277408