CFO Outsourcing and Controller Services
Maximizing Business Growth with SDG Accountant In today’s competitive business landscape, effective financial management is more crucial than ever. Companies need robust financial strategies to drive growth,
Overview
A rapidly growing manufacturing company in Ontario faced significant financial challenges that threatened its survival. By partnering with SDG Accountant, the top accounting firm in Toronto for SMEs, the company not only resolved its immediate tax and cash flow issues but also secured essential funding and established a robust financial infrastructure. This transformation was achieved through our comprehensive Fractional CFO Services and strategic business advisory, providing them with high-level financial expertise without the expense of hiring a full-time CFO.
Client Profile
Our client is a manufacturing company headquartered in Ontario. It specializes in selling wheel and tire equipment primarily to U.S. clients. On track to achieve $13 million in revenue for 2024, the company was poised for significant growth but was hampered by financial mismanagement and operational inefficiencies.
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Challenges Faced
- Tax Compliance Issues: The company had not filed taxes for 2020, 2021, and 2022, leading to mounting liabilities and compliance risks.
- Inaccurate Financial Records: Their accountant for 2023 had mismanaged their books, creating material tax liabilities and inaccurate financial statements.
- Cash Flow Problems: Owing substantial amounts to creditors, the company was suffering from severe cash flow issues that threatened its operations.
- Funding Difficulties: As a relatively new business, they struggled to secure financing to alleviate cash flow constraints and invest in growth.
- Lack of Financial Leadership: Without a dedicated CFO, the company lacked strategic financial direction and oversight.
SDG's Comprehensive Solution
1. Fractional CFO Services
- Strategic Financial Leadership: Acting as their Fractional CFO, we provided high-level financial oversight and strategic planning, filling the gap left by the absence of an in-house CFO.
- Cost-Effective Expertise: Delivered CFO-level expertise at a fraction of the cost of a full-time executive, eliminating the need for additional overhead and employment liabilities.
- Flexible Engagement: Offered scalable services tailored to their evolving needs, ensuring they received the right level of support at all times.
2. Tax Compliance and Recovery
- Completed Overdue Tax Filings: Our team promptly prepared and filed corporate taxes for 2020, 2021, and 2022, bringing the company back into compliance with the Canada Revenue Agency (CRA).
- Secured Significant GST/HST Refunds: Leveraging our expertise in Input Tax Credits and GST/HST filing and remittance, we secured nearly $100,000 in GST/HST refunds for both 2022 and 2023—the years they expanded into the U.S. market.
- Reduced Tax Liabilities: Our meticulous approach minimized existing tax liabilities, turning a potential financial drain into a source of funds to pay down creditors.
3. Financial Restructuring and Reporting
- Implemented Robust Accounting Systems: Led by Mebby Mengele and Sami Ghaith, we overhauled their financial reporting processes, introducing advanced accounting software and best practices.
- Enhanced Cash Flow Management: By establishing accurate financial records and forecasting tools, we enabled the company to predict cash flow more effectively, leading to improved financial stability.
- Creditor Management: With better financial insights, the company could negotiate more favourable terms with creditors and establish payment plans that ease cash flow pressures.
4. Securing Funding and Investment
- Structured Equity Investment Deal: Recognizing the company’s funding challenges, we facilitated a deal to sell 25% of the business equity to a private investor.
- Combination of Cash and Revolving Line of Credit: The investment included a cash infusion and a $300,000 revolving line of credit, providing immediate liquidity and a financial cushion for future needs.
- Improved Financial Position: The infusion of capital and credit transformed the company’s cash flow status from negative to positive, allowing for strategic investments and operational stability.
5. Ongoing Support and Advisory
- Continuous Financial Oversight: As their Fractional CFO, we continue to provide ongoing financial management, ensuring the company stays on track with its financial goals.
- Scalable Services: Our flexible engagement allows the company to scale services up or down based on their needs, providing financial expertise as they grow.
- Access to a Team of Experts: Beyond individual expertise, the company benefits from our entire team’s collective knowledge across various industries and financial disciplines.
Key Benefits Delivered
- Regained Tax Compliance: Eliminated the risk of penalties and legal action by bringing the company up to date with all tax obligations.
- Significant Tax Savings: Secured nearly $100,000 in GST/HST refunds, directly improving the company’s cash position.
- Financial Stability and Predictability: Implemented systems that enhanced cash flow management and financial reporting accuracy.
- Improved Creditor Relationships: Enabled better payment terms and reduced pressure from creditors.
- Secured Essential Funding: Arranged a strategic investment that provided both capital and a revolving line of credit, ensuring long-term financial health.
- Cost Savings Over In-House CFO: Provided high-level CFO expertise without the costs and liabilities associated with hiring a full-time executive.
- Strategic Growth Planning: Assisted in setting long-term financial goals and strategies, positioning the company for sustained success.
- Risk Mitigation: Proactively identified and managed financial risks, safeguarding the company’s assets and reputation.
- Stress-Free Leadership: Freed up the executive team to focus on core business operations, knowing that financial management was in expert hands.
Why SDG's Fractional CFO Services Stand Out
- Immediate Impact: We deliver quick results, addressing urgent financial issues promptly.
- Customized Approach: Our services are tailored to meet your specific challenges and objectives.
- Cost-Effective Solution: Avoid the high salary, benefits, and other costs associated with a full-time CFO.
- Flexible Engagement: Scale services according to your business needs without long-term commitments.
- Access to Diverse Expertise: Benefit from a team with wide-ranging skills in accounting, tax, finance, and business strategy.
- Long-Term Partnership: We’re invested in your success and provide continuous support to help you achieve your goals.
Is Your Business Facing Financial Challenges or Lacking Strategic Financial Leadership?
Let us help you navigate complex financial landscapes and unlock your company's full potential with our Fractional CFO Services. We provide effective accounting, tax and strategic consulting services to all kinds of manufacturing companies.
Growing Up Your BusinessConclusion
SDG offers more than just accounting services—we provide strategic financial solutions that can transform your business. Our combination of Fractional CFO Services and Business Advisory Expertise empowers companies to overcome challenges, achieve financial stability, and position themselves for sustained growth.
The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situations.
— Mebby Mengele
CPA, CGA, MBA
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