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Debt management advice, cash flow and financial planning

Case Study: Debt management advice, cash flow and financial planning

Whichever industry you are in, we make it our business to understand yours. Here are just a few examples of how we’ve helped our clients.

A professional cleaning company that needed help to clean up its own act

A professional cleaning company with 350 staff that provides services to upmarket restaurants and prestigious hotels had a good reputation, numerous customers and a strong turnover.

On the face of it business seemed good with a busy workload and steady revenue. However, the company was in crisis and had been struggling to pay VAT and PAYE for some time, and turned to us for help.

We met the managing director and took an in-depth look at their company and business model.

 

Staff’s hourly costs outweighed the company’s hourly charges

We discovered that their profit margins weren’t as good as they thought they were.

Although their hourly charge-out rate seemed significantly higher per hour than their employees’ hourly pay, they had failed to account for the cost of employer’s National Insurance contributions and their staff’s annual holiday. When these costs were factored in, it became apparent that employees’ pay was higher than the company’s charges – they were losing money every time they were called out.

 

Big debts to HMRC

To compound the problem, the company’s long-term pricing agreements with customers meant that restructuring pricing in line with costs would be a lengthy process. Even worse, the business had serious debts with HMRC and was still operating at a loss.

 

A new and improved pricing structure

Our solution was to create a new corporate identity with a fresh and clearly defined pricing structure for new business. Simultaneously we liaised with HMRC to negotiate outstanding debt and agree a payment plan. We also arranged factoring finance to help the business through the transition period from unprofitable to profitable operations.

Three years later the company has paid off HMRC, has a strong turnover and is operating on healthy margins.

 

A pleasure working with us

The company’s managing director appreciates our efforts.

He says: “Morgan Berkeley helped my business survive when we were in a difficult financial crisis. I’m proud to have them as my accountants.”

If you want more information, call us on 020 8868 2435.
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