Many companies suffer "hiccups" - blips in their performance that might, or might not, be easily resolved. If a business fails to meet its projections and cannot pinpoint the cause, it is imperative for stakeholders in the business to seek professional advice before the hiccup becomes deadly.*
Sudden Onset Hiccups
We recently were retained by a senior lender to work with a restructuring expert at one of the lender's portfolio companies. The lender had enjoyed a long, successful history with the company. Since the company's business was based on contracts with its clients, its performance should have been somewhat predictable. However, after an unexpected change in management, the company suffered a major financial hiccup. To exacerbate missed performance numbers, the lender believed it had been misled by its borrower, causing a loss of trust in management.
We quickly completed a thorough investigation of the company's operations, accounting and reporting systems, forecasting processes and key finance personnel. With this knowledge, we made recommendations to resolve deficiencies that contributed to the company's "hiccup," including:
- Timing of revenue and expense recognition
- Sales lead forecasting
- Financial forecasting
- Financial reporting
- Expansion of company's board of directors
- Establishment of an independent audit or advisory committee
With these controls in place, the lender should not suffer any further unexpected surprises from its borrower.
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* At best, hiccups are uncomfortable. At worst, hiccups persist for years - just ask Christopher Sands, who had them for over 4 years until a tumor was discovered on the part of the brain that controls vascular activity. While most cases of hiccups will resolve on their own within a reasonable amount of time - perhaps with the aid of a teaspoon of vinegar, drinking water, or a good "scare" - it is worthwhile to seek professional advice if they persist.
About Brandlin & Associates
Brandlin & Associates is an exclusive provider of accounting due diligence, financial consulting and strategic consulting services. We pride ourselves on offering superior technical expertise, years of practical experience and unparalleled service to decipher financial and operational performance metrics. As a result, our clients are able to make informed decisions in a timely manner.
March 21-21, 2011
San Diego, CA
We hope to see you at ACG's biggest event of the year.
April 6, 2011
We are pleased to be a Platinum Sponsor of the Commercial Finance Conference of California, the trade group for commercial finance companies, factors, banks and other financing agencies engaged in the asset-based financial services industry
April 13-14, 2011
Southwest M&A Conference
For the 3rd year, we are the tote bag sponsor for ACG Arizona's Southwest M&A Conference, featuring a Capital Connection, 2 keynote speakers and Deal of the Year Award.