Only two years old but thisYorkshire company had grown from zero to three quarters of a million in sales. We thought this company had great potential but poor management accounting information. Also there was no real plan for the future.
The board could not understand why after a successful and profitable first year it was then losing so much money in the second year. The answer was its cost accountancy was non-existent. They had won some new contracts and saw this as salvation; we saw it as a threat! The costs had been guessed at and each delivery was losing money.
Using a CVA to reorganise the debts, (no bank debt here) which was PAYE and VAT in the main allowed us to provide assistance to the board in marketing, cost controls, and or course the accounting. We helped reorganise the contract to a more profitable level.
Now, the Yorkshire company is growing under control and they have monthly accounts, monthly board meetings and are actually more profitable than the modest CVA forecasts. With one main customer it does however need new customers and there is a marketing plan in place to drive this.
During the CVA we reorganised the vehicle finance, removed some under performing drivers and helped the company relocate to more appropriate offices/depot.
Categories: CVA, What is a CVA or Company voluntary arrangement?