Assisting with a PROFIT ISSUE

An army sergeant and three of his friends retired after twenty plus years transporting munitions and other dangerous cargo.  They started a trucking company specializing in hauling hazardous materials and were an immediate success.  After five years in the business, the sergeant hired Smith Group Consulting because as he said, “We continue to grow and we are having fun but we are not making any more money than when we were in the army.”

After a careful review of business operations and practices, Smith Group Consulting uncovered the problem.  The sergeant was not making money because he had no strategy for using money.  Budgeting was a principle that said when there is cash in the bank you buy what you want.  Pricing was also an issue.  The pricing schedule was five years out of date and no one could remember how the original hauling fees were determined.  The company’s only clerical person sent out billings when the service was provided but sent past due notices only when there was time.  The bookkeeping system was primitive thereby making it virtually impossible to determine who owed what to the company and for how long.

Using spreadsheets modeling we were able to demonstrate the financial advantage of automating the accounting, billing and pricing systems; hiring a skilled bookkeeper to provide timely financial statements, improve collection of past due accounts and update pricing as warranted; and the development of a budgeting system to control spending and forecast earnings.