An unreliable financial reporting process can undermine business operations, strain customer relationships, and impede strategic decision-making. When reports are untimely or difficult to interpret, and when core processes like invoicing and collections are inconsistent, the entire organization suffers. This case study examines how a company resolved these critical issues by partnering with the PBMares’ Outsourced Accounting team, ultimately improving customer satisfaction and revitalizing its financial framework.

Challenge

The client was facing significant difficulties with its financial reporting and accounting functions. The core problems were multifaceted and deeply rooted in their daily operations:

  • Delayed Financial Statements: Key financial reports were not being produced in a timely manner, leaving leadership without the current data needed for informed decision-making.
  • Lack of Actionable Insights: The reports that were generated were prepared in a format that made it challenging to identify trends, opportunities, or red flags.
  • Inconsistent Invoicing and Collections: There was no standardized review process for issuing invoices, leading to errors. Furthermore, the procedures for accounts receivable (AR) collections and payment application were inconsistent.
  • Negative Customer Impact: These internal issues had external consequences. Customers grew frustrated due to incorrect invoices and a lack of responsive support from the accounting department.

The client understood the importance of dependable financial data and had previously attempted to solve the problem by outsourcing to another accounting firm. However, that engagement did not produce the desired results, leaving the core issues unresolved.

Our Approach

Our Outsourced Accounting team initiated the engagement by conducting a thorough needs analysis to understand the client’s specific concerns. It became clear that a two-phased approach was necessary: first, address the most urgent issues impacting cash flow and customer satisfaction, and second, strategically optimize the underlying financial processes for long-term health.

Phase 1: Stabilizing Core Accounting Functions

The immediate priority was to address the problems that were directly affecting revenue and customer relationships. The team focused on two key areas:

  1. Improving Invoicing and AR Collections: Correcting the invoicing and collections process was paramount, as this is the origin of the company’s operating capital. The team implemented standardized procedures for invoice creation, review, and distribution to eliminate errors.
  2. Resolving Outstanding Accounts Receivable: A significant amount of old, outstanding AR needed to be addressed. Our team worked with the client to systematically review each overdue account, identify potential accounting errors, determine which balances were collectible, and recommend write-offs for those that were not.

Phase 2: Optimizing Financial Reporting and Strategy

With the immediate fires put out, the focus shifted to building a more efficient and strategic financial framework. This phase was designed to enhance decision-making and improve profitability. The key actions included:

  • Pricing Model Analysis: We investigated and discussed potential price increases based on industry-specific indexes and performance metrics.
  • Pricing Structure Redesign: The pricing model was streamlined and reformatted to account for critical variables such as location, fluctuations in operating costs, and necessary overhead coverage. This led to a more predictable and reliable revenue stream.
  • Financial Reporting Enhancement: The financial reporting processes were redesigned to be more efficient. Reports were reformatted to be more user-friendly, providing decision-makers with clear, actionable insights into the company’s performance.

Managing the Human Element of Change

Implementing significant changes to financial processes can create uncertainty for the employees involved. Our team managed this by holding weekly meetings with the client. While these meetings typically involve one or two key contacts, in this case, almost the entire client-side financial reporting team chose to attend.

This high level of participation stemmed from two primary motivations: anxiety and curiosity. Some team members were understandably concerned about how the changes would affect their daily tasks. We took the time to listen to these concerns and explain each step of the process, ensuring everyone felt heard and informed.

Others were deeply invested in the improvements and wanted to observe the process of rebuilding workflows, identifying errors, and addressing challenges as they arose. As the project progressed and employees became more comfortable with the new systems and their roles within them, attendance at these weekly meetings naturally decreased. This transparent and inclusive approach was crucial for ensuring a smooth transition and fostering buy-in from the client’s team.

Learn More
Explore how PBMares can support your nonprofit organization with outsourced accounting and financial services. Contact us today to learn more.