Serving Phoenix, Glendale, Surprise, Goodyear, Avondale, Litchfield Park and Buckeye


Case Study:

Situation:
A $25M construction subcontractor was unable to produce first quarter 2008 financial statements in July of 2008 after a system conversion on January 1st. The banking relationship became strained due to a number of outstanding loans combined with the banks decreased appetite for risk given the economic downturn and credit crisis.

Solution:
Sidell and Company was hired with less than a week’s notice before a key bank meeting to review the first quarter statements. Due to the time constraints, Sidell and Company had to prepare the first quarter statements outside of the system. The financial statements were prepared and reviewed with the bank to their satisfaction. The bank asked for several additional supporting schedules which Sidell and Company had prepared by the next day. The bank was impressed with the timeliness and accurate information provided and the banking relationship with the client has been restored.

Sidell and Company then concentrated on the system issues which had prevented the preparation of accurate system generated financial statements. After correcting the system issues, Sidell and Company was able to prepare second quarter 2008 financial statements in the system. The borrowing base calculation and financial statements for the second quarter were submitted to the bank on time meeting the deadlines in the loan agreements. The owner commented, “this was the first time in fifteen years that the financials and bank reporting was on time.”

Sidell and Company was asked by the client to remain in an interim role to complete many tasks requested by the owner which included:

  • Pro forma financial statements for the year 2008 based upon the operation managers projections
  • Weekly cash flow projections to accurately forecast cash availability for equipment purchases
  • Review of payroll, payables and billing/collection procedures to improve efficiencies in the accounting department

The client was very satisfied with the services performed by Sidell and Company. Timely financial statements and bank reporting is now the norm when it had never been done in the Company’s history. The quality of the financial statements is improved as all required journal entries are recorded monthly instead of quarterly or annually as had been done in the past. The client also has better visibility in his business due to the timely financial statements and the financial and cash flow projections prepared by Sidell and Company.