Business Understanding
The most important step would be to spend time in gaining a sufficient business understanding and I would achieve this by interviewing all key personnel. Including an understanding of key responsibilities, customers and to confirm any finance issues or specific assistance required. Also to identify expectations and determine a plan to improve, where required financial analys
is and management information to all stake holders. Systems review
Gain an understanding of accounting system and all other systems and understand the impact on the business
Financial and management reporting
Understand local executive management, Board and Shareholder reporting requirements
Budgeting
Review the latest budget – understand the philosophy behind the process and submissions. Review the tracking to budget and determine success and risk areas. Complete review of Income Statement
Include all key income accounts and stratify income sources and the key customers. Identify profit centres within the business and ensure adequate internal cost allocations have been implemented to determine departmental / product profitability. COG and handling of work in progress (refer to Balance Sheet). Review all expense items and document where they come from, how they fit the business and identify efficiency / procurement benefits. Complete substantive review of Balance Sheet
Include a review all assets and liabilities, the key ratio’s – assets vs liabilities (current, acid test, gearing), debtors & creditors days outstanding. Assess company funding – bank overdraft, asset finance etc, including long term / asset based finance. Identify key suppliers. Contracts (including quotes)
Review contracts file / register to ensure all contracts are recorded and evaluate the efficiency and accuracy of the filing system. Reconcile all contracts to the balance sheet / income statement and ensure disclosures are accurate. Evaluate key internal controls
Review all signing authorities (Power of Attorney / Delegations of Authority including contracts, quotes, PO’s, bank). Assess the systems security / access controls – physical and all system related access are effectively designed and implemented. Review the flow of Procure to Pay and Order to Cash. Treasury management – all bank accounts, management of cash. Payroll and Employee benefits and all contract staff. Review the policies for travel and entertainment. Review the fixed assets – CAPEX budgets, procurement, recording, useful live evaluation. As part of the assessment determine which processes require Standard Operating Procedures to be documented / review the documented policies. Assess Companies Act compliance
Review the compliance with the “new” Act 2008: Director’s duties, External auditors, Company secretary, Audit committee. Ensure that the audited financial statements are completed and signed. Taxation
Review the completion and filing of all taxes – company tax, VAT, PAYE, SDL, employer declaration etc and ensure processes in place to ensure compliance and timeous completion and submission. Develop Plan for continual improvement in the efficiency and effectiveness of the finance function
