CASE STUDY: ORGANIZATION
Unfortunately, there are a lot of bad accountants out there. Poor accounting and mismanaged books leave a business exposed to potential consequences and fines come tax season, and make it virtually impossible to be strategic in your business decisions. Occasionally a client comes to us with a set of books that require a lot of historical clean up; this case study explores how we approach a client who needs a clean slate.
The Client
The client is a full-service live-action production company that has been in business for over 8 years. Their work in advertising and entertainment is inclusive, innovative and imaginative. These core values extend to their roster which represents a diverse group of artists across several mediums.
The Beginning
Before the client began working with us, their internal operations—including accounting—were managed by another production company. As they grew and could stand on their own, they left that arrangement and hired a part-time controller to work in-house, hoping that having their own accountant would provide them the prioritized attention they were missing in their prior setup. Unfortunately, their in-house controller was not equipped to manage the workload and, after a few months, the owners realized their accounting had been severely neglected.
“We realized that our in-house controller did not have the breadth of knowledge that a firm like SYZYGY has, where their team has specialized departments and different roles in the accounting process. SYZYGY comes with more years of experience and more eyes on the work.”
A lot of production companies rely on their in-house controller to do the job of an entire accounting department. If you hire a rock-star controller, this arrangement may work just fine. Unfortunately, the production industry is niche and the hiring pool is small. There are only a handful of people in this industry that are rock-solid in both their accounting and industry knowledge. Making that unicorn hire is a challenge, and sometimes just not possible.
The Process
When they joined SYZYGY, the client’s books hadn’t been updated for many months, and they hadn’t seen a set of financial statements in nearly a year. SYZYGY did a complete review of six months’ activity, producing two quarters of financial statements and ensuring that the books were tidy and—more importantly—correct.
“They customized an outline and a plan that worked for us. And again, I can’t stress enough the attention to detail. No stone is left unturned with them.”
It was a big project, and required a full review of all the bank and credit card activity during that time, and a deep dive into each job to ensure each vendor had been paid and all receivables had been collected. SYZYGY worked closely with the client to gather all documents and information required for this review and tapped into the industry expertise of its team to reverse engineer a set of books that captured all the activity.
“We had to go back and do a lot of cleanup work on our books. They stepped in and really cleaned up a bit of a mess for us. They were on top of it pretty much from the get go.”
The Results
During the deep dive, SYZYGY discovered over $20,000 in duplicate payments—a problem that can easily happen if bank activity isn’t up to date and jobs aren’t being thoroughly reviewed. SYZYGY was able to recuperate those duplicate payments and present financial statements to the client for the first time in over a year.
After less than 6 months of partnering with SYZYGY the client now sees reporting on a monthly basis. This reporting has given the client a clear understanding of where their business stands and knowledge to confidently make plans for the future.
Determining how much cash a company has at any given time requires expert knowledge of both accounting and the intricacies of production. SYZYGY is an outsourced accounting firm with knowledge at the intersection of both. Along with CFO-consulting, we offer soup to nuts accounting so that we know your books are clean, all jobs have been wrapped appropriately, and the client’s financials are accurate.