The difference between a traditional reactive bookkeeper and a modern bookkeeper, who works proactively in partnership with their clients, is plain to see in this case study:
Duncan Vercoe from Talbot Homes is a very successful property developer. He runs multiple property projects at the same time with each project involving different building developments at different stages in their project lifecycle.
To start with, he looks for some available plots of land, cost analyses the feasibility of building a profitable development on this land, and then seeks planning permission. With planning permission granted, the project can proceed and he would then set up a Special Purpose Vehicle. This is a type of company that many property developers use when seeking finance as it limits the risks of potential investors to this individual development project.
With funding secured, Duncan then starts the build process for the project and, as each stage of development is reached, he draws down the agreed amounts from his lenders. When each project is fully developed and successfully sold, profits are shared with his investors and the individual SPV is closed down.
Duncan did have a bookkeeper to assist him but became unhappy with the service he was receiving. Their approach was solely transactional and reactive. They were simply doing his VAT returns on time and keeping him legally compliant etc. They showed no interest in his business and Duncan received no feedback on the state of his cash flow, his cash in bank, or any of the vital financial information that Duncan really needed.
However, despite this lack of information, Duncan is a shrewd businessman and was very good at keeping his own financial records himself as Excel spreadsheets. He meticulously kept spreadsheets for each SPV project and would then manually reconcile these multiple spreadsheets together to gain an overall picture of his business. This arduous process worked.
However, there were three significant problems with this approach:
- Firstly, doing this manually meant that there were always opportunities for costly mistakes that were often not spotted until a later date.
- Secondly, the sheer amount of time needed to maintain and update these spreadsheets manually was huge and having a real impact on his business time and also on his work/life balance.
- Thirdly, this time-consuming approach limited the number of SPVs he was able to work on at the same time. His business was completely tied to his available time and therefore was not scalable.
Fortunately, he met Clare from CJ Bookkeeping, who immediately started to help. She started by ensuring that she understood the whole business and closely analysed each step in his current business processes.
She then examined his spreadsheets and his VAT returns and quickly identified the exact position of his business. She then added all of his financial information on to Xero™ so that all invoices for his main company and his currently active SPV projects were online.
Working closely with Duncan, Clare then compiled a brand new Operations Manual that detailed every step of his new online business model. A key component of this new way of working was combining project scheduling, project management, financial management, customer management and service management into a single suite. Clare is currently helping Duncan to integrate these areas with Xero™ and into his daily operations.
As a result, Duncan will have full visibility of the live real-time financial information for every active SPV and also for his overall company at the touch of a button. His time will no longer be constrained by manually managing multiple spreadsheets.
“Clare has completely transformed my business. With these new operational processes in place, my business will be completely scalable and there will be no time limit that restricts the number of SPV projects that I could run each year. I’ll be able to spend more time looking for more land, finding the best subcontractors, working with the best estate agents and generally growing my business.”
“With the full financial visibility of my key metrics at my fingertips, I can always see my financial position and can make better business decisions in terms of cash flow, forecasting and invoice payment. It also helps me keeps my investors better informed, which increases their confidence in investing in my development SPVs. My business will grow faster and more smoothly thanks to CJ Bookkeeping!”
For full financial visibility, please contact Clare and her team on 01327 262453 or firstname.lastname@example.org.