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Case Study

Preparing for Change in Ownership

Industry
Team Size
1 Senior Director, 1 Vice President
Project Duration
12 weeks

The Challenge

A manufacturer of custom seating solutions for cinema theaters had undergone tremendous growth with revenue more than doubling over a two year span. This growth far outpaced the investment in Company support functions, leaving it ill-equipped to handle a change in ownership. The Company engaged Accordion to assist with post-close processes, including acquisition accounting, opening balance sheet development, and building a covenant compliance model. Additionally, the Company requested our assistance with revamping deficient financial processes, accounting policies, and internal controls.

Services

Financial Statement Preparation & Analysis

Accounting Policies & Procedures

Process & Controls Implementation

The Execution

Created an opening balance sheet, including:

  • Analyzing and summarizing key components of bank and deal documents
  • Developing all relevant acquisition accounting journal entries and assisting finance team on completing and validating journal entries
  • Assisting in documentation of adjustments as back up for audit

Worked with Company to gain macro-level understanding of current entity set up and created a new structure for five new post-deal entities in QuickBooks, and developed a covenant compliance model, including:

  • Helping the Company define EBITDA calculations based on bank requirements
  • Documenting necessary data for covenant calculations and assisting in development of models/templates in addition to update processes
  • Created process for performing company eliminations
  • Facilitated knowledge transfer and documentation of ‘as is’ finance processes for key finance personnel (Inventory Manager, Controller, etc.)
  • Performed macro-level review of the business and finance organization structure
  • Enhanced/established financial account policies and procedures for Revenue/ Billings, Expenses/Vendor Management, and Inventory policy and management
  • Developed finance team internal controls structure for Order to Cash, Procure to Pay, and Record to Report
  • Transitioned and trained all relevant personnel on new policies and procedures and worked through any adjustments to procedures for business efficiency

The Results

The Accordion team worked with the CFO and other relevant stakeholders to assist with the execution of post-close accounting and perform a detailed process and controls review on the finance function. With our assistance, the Company was able to: produce an unaudited Opening Balance Sheet with documented adjustments, create entity-level financial statements from a multi-entity GL within QuickBooks, and build a robust covenant compliance model. We also identified various gaps in existing business processes and provided a comprehensive list of recommendations, complete with detailed next steps and a thorough description of the benefit of each.