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Case Studies

From Profitability Blindness to Clarity

The Problem

This client came to me for help in understanding how to improve profitability. Understanding profit-per-client was essential for this client, because of the nature of their business. 

My Process

First, I worked with their bookkeeper to set up new processes and documentation of those processes for everyone who might need to learn the new system.


Once we started collecting the right data — and in the right way — I created a dashboard that showed which jobs and clients were profitable at a glance.

The Solution

Using this information, the client implemented multiple strategies to improve profitability. They changed their pricing structure to reflect the size of the job, making sure that every job was profitable, no matter the size.


They also incorporated the data into their sales process so that all future jobs would be profitable. But even more impactful, seeing which clients were profitable allowed this client to profile their best (i.e. most profitable) clients and find more clients that fit the same profile, leading to more profitable client relationships.


With the right data and the ability to visualize the right data, they were able to improve profitability without increasing their expenditures.

Accelerated Cash Flow for Business Success

The Problem

When cash flow wasn’t fast enough for this business to keep up with its expenses, I stepped in. They already had an efficient bookkeeping system in place, so I was easily able to set up a system to see what was straining their financial liquidity. The problems I saw were:

  1. An Invoicing Delay: Completed jobs weren't getting invoiced for up to two months. This led to a significant lag in cash flow.

  2. A Discrepancy between Accounts Receivable (AR) and Accounts Payable (AP): The company paid its bills in about 60 days, yet collected on their invoices in roughly 90 days. When coupled with the invoicing delay, there was a five-month waiting period for cash inflow, while cash was being expended in just two months. This imbalance was critically straining the company's cash reserves, with payroll expenditures exacerbating the issue.

The Solution

Together, we came up with some solutions. To speed up invoices, we created a process that had the company invoicing jobs within a week of completion. We also talked about various ways to speed up the collection of newer invoices and tactics to collect old invoices. The tactics are still being implemented, but we expect to cut off 3–4 months of waiting for money.

Finding the Source of the Cash Leak

The Problem

This client found themselves in a financially precarious situation, sustaining losses for nine out of twelve months, and incurring a significant net loss for the year. Despite a sense of activity and engagement among the staff, the company was overextended, particularly in the realm of compensation costs relative to revenue.

My Process

To remedy the financial crisis, I went through the following steps:


  1. Bookkeeping Review: The first task was to validate the existing financial data, ensuring a solid foundation for all subsequent analyses.

  2. In-depth Analysis: Once the data was confirmed as reliable, I began my analysis. This analysis included comparing revenue to Cost of Goods Sold (COGS), scrutinizing various categories of costs relative to gross profit, and evaluating numerous metrics and ratios.

  3. Forecasting: I developed a forecast to provide a future-oriented perspective on the financial trajectory of the company, considering all the metrics and measurements analyzed.

  4. Identification of the Cash Flow Leak: The meticulous analysis revealed that the company's compensation costs were significantly high relative to their revenue. They had hired beyond their actual needs.

The Solution

Working together, we implemented a few tactics to return the company to profitability. First, the client made the necessary adjustments to its compensation structure to align more appropriately with company income. Also, using the forecasts, they were able to make hiring decisions based on future months instead of just historical data. These changes allowed my client to earn more in the first 4 months of the following year than they had lost the year before. It also allowed them to catch up on overdue debt payments and accounts payable.

Try It Out Yourself

I regularly meet with companies that may need help but aren’t exactly sure what help they need. Let me figure that out. On just a brief call, I can usually give 2 or 3 suggestions that will have an immediate impact on how you run your finances. Let’s see what we can accomplish together. Schedule an appointment today.

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