Case Study Overview: This case study demonstrates our experience with earth moving, plant hire, and related services. While it includes some forecasting and analysis it highlights our understanding of the complexity of management accounts and forecasting in mining services, civil construction and plant hire industries, particularly in regard to accounting for fixed plant, leased assets and WIP.
The client is an earth-moving, haulage and transport company with an annual turnover of $80-$100m. The project engagement length was 2 months with an extension of 6 months for ongoing management accounting support.
Project Trigger: Based on conversations with management, it became evident that two parallel events – delivery of a $30 million+ civil contracting project and an ERP system replacement – had significantly impacted management’s ability to accurately view the business’s current financial position.
Scope of work: We developed a scope of work that provided clear outcomes in assessing gaps in the finance function’s capabilities, processes and ERP system. We also provided recommendations across other business functions and services where we believed there were significant opportunities for improvement. We continued to oversee the finance function over a 6 month period to resolve critical issues.
Review Outcomes: Our review identified a number of high priority issues across the key core business functions – namely to build an accurate view of the financial position and to develop a day by day plan to overcome the significant risks across finance. The 90-day action plan aimed to:
- Assist the client to achieve end of month reporting within 8 days (reduction from 60 days),
- Provide clear and precise recommendations to continually deliver accurate progress reporting, and
- Allow the client to deliver accurate forecasts across the key service lines.
So what was the real value? Working hand in hand with the client over a 2-month period and an extra 6 months allowed Active Directions to lead the client from a critical situation to being able to access accurate financial reporting and forecasting, as well as to implement standardised end of month processes.
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