Historic data – such as the amounts owed to the company by its clients, the amounts owed by the company to its suppliers, and taxes such as VAT and Corporation Tax are due to HM Revenue & Customs. Internal financial systems are needed in order to ensure this data is absolutely current. If a payment has been received from a client but not recognised in the company’s financial data the payment will have increased the bank balance but still be included in the amount owed to the company. This will lead to an over statement of the company’s projected cash position.
Predictable forecast data – this includes items such as the amount the company intends to spend on salaries, the commitments the company has to pay rent and other long term costs, and future sales that clients have committed to. This information is usually based on information the company has through its payroll reports or other agreements the company has entered into. It can be collated from these sources and then amended depending on changes such as hiring a new employee. It is important to check these amounts against historic data to ensure all the elements have been included.
Unpredictable forecast data – this relates to future unknown sales. Companies that work on a project by project basis often have little insight into what clients are likely to spend in future months. Often the only way to predict this is by reviewing historic data to see where the company has been making money in the past. By its nature this information is highly subjective. However, by monetising it the company at least will have a firm target in place and can then produce a strategy to work towards the target.
Chris is a business advisor specialising in company efficiencies and M&A. He has 27 years’ experience in business and started his own company, Flash Accounts, 13 years ago. The company has a team of 9 experts providing part time finance departments to the Marketing Communications industry.
What others say:
Value is something that Chris Lang holds dear, not just in financial terms but he values people as well. I worked closely with Chris during the growth of Vivid Brand and the subsequent sale to Publicis Groupe. Chris’s attention to detail and capacity to uncover the bear traps is exemplary. His ability when dealing with the Publicis M&A team in Paris would not go amiss in the current Brexit negotiations!
His understands the complexities of the M&A process within the creative industry, legal and financial, real and imaginary.
Andy Scott , Founder and past CEO, Publicis Groupe UK / Vivid brand