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Post-Acquisition Restructuring

Business situation

The subsidiary firm had been officially purchased by a holding company. Three months later, a new CFO was hired to run the acquired firm. The new CFO was uncomfortable with the lack of formal policies and procedures in place within the accounting department. Early payment discounts were not taken advantage of each month, the bank reconciliation process was rarely accurate and the monthly closing took more than 20 days to complete. Other issues centered on staff members who were not being utilised effectively, were not experienced enough for their designated roles, or were considered excess staff.

Project scope

Steered by the new CFO, the interim managers provided by Robert Half Management Resources broke the project down into two distinctive phases:

• Phase 1: Discovery and Recommendation - during this phase, the project team: Identified the procedures currently in place. Determined the procedures that were effective and those with deficiencies. Gained knowledge of areas that did not have formal procedures. Made recommendations to correct each of these areas.
• Phase 2: Implementation and Documentation - the project team implemented the following solutions in Phase 2 based on their recommendations made in Phase 1: Created best practices for each business process. Made efficient use of the existing Great Plains e-Enterprise accounting system by implementing unused modules. Made changes to the existing staff by re-training certain employees on best practices, repositioning others into new roles and terminating excess positions. Created a formal manual of policies and procedures coupled with an online version containing hyperlinks to an index.

Industry: Media & Entertainment

Revenue: £175 million

Client's return on investment

The team of interim managers: Created immediate savings of more than £110,000 for the client by taking advantage of early payment discounts to vendors. Eliminated £80,000 of salary by streamlining the accounts payable department. Eliminated £43,000 of salary by consolidating the bank reconciliation and accounts payable processes. Developed an online corporate calendar and an indexed policies and procedures manual to guide all future permanent and project staff, in order to eliminate any potential errors in the newly defined accounting department. Clarified and consolidated the roles of 25 percent of the procurement department, resulting in a cost savings of more than £55,000. Overall, the project resulted in savings of more than £280,000.

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