How a speedy ledger reconstruct helped avoid insolvency
We used a reconstructed collectable ledger and training to help a recruitment business to trade out of its difficulties and grow
We attended a meeting with a temporary recruitment business to undertake a ledger verification following concerns from the funder.
Our initial verification highlighted that incorrect allocations had taken place to disguise duplicated invoices, the total value of which was substantial, leaving both the business and the funder in a difficult situation with regards to cashflow.
CRM provided skilled resource into the business by outsourcing an employee of CRM, initially attending the business premises on a daily basis to support the directors to reconstruct the ledger into a true collectable position.
The directors had minimal knowledge of the accounting system and had not been involved in the manipulation of the ledger.
In order to reconstruct the ledger, we undertook the following
- Request of copy remittances or transaction history from the debtors
- Reapplication of payments as per the remittance to the accounting system
- Review of invoices that have been reapplied to the ledger following the incorrect allocations
- Training of the accounting system to the directors so they would be able to take over the accounting process
- Ongoing support by way of monitoring and guidance to ensure the correct accounting and invoice processes were being applied
The results we secured
- Gained trust from the directors and were able to provide the funder with accurate information
- A reconstructed collectable ledger
- Information provided to the funder on a daily basis, allowing the funder to continue to support the client with weekly payment
- Training to ensure the correct accounting process was adopted, allowing the business to trade out of its difficulties and continue to grow successfully
In quick conclusion
CRM involvement with the business continued for 12 weeks, providing support during a highly critical and emotional period, and ensuring that the business was able to avoid a potential insolvency. It was described as a ‘feel good’ result for all parties involved.