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Finance Presentation Aidan O’Byrne OBK Accountants/ The Food Accountants :

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Presentation on theme: "Finance Presentation Aidan O’Byrne OBK Accountants/ The Food Accountants :"— Presentation transcript:

1 Finance Presentation Aidan O’Byrne OBK Accountants/ The Food Accountants :

2 Background Ex Finance Director Batchelors/Ex CFO Valeo Foods

3 Founder director of Love Irish Food 80% Mark Identification Significant Annual Media Spend

4 Food Accountants Accounting & Advisory to Food Companies of all Sizes Mentor Role Fundraising M & A Non Exec Director Restructuring

5 Contents Recap on Food Academy Start Capital & Funding Structure Internal Business Controls Preparing for Growth

6 Recap on Food Academy Start C – Cash I – Information P – People

7 Cash Cash will always be King Financial Activity not valuable until it delivers cash Cash allows founders to deliver on their goals

8 Cash – Lack of Cash leads to Firefighting Compromising Quality Scrambled Thinking Business Failure

9 How to Maximise Cash - Debtors Bill Promptly Bill Accurately Understand your Credit Terms Have Credit Check Procedures Have Credit Limits

10 How to Maximise Cash - Debtors Debt Review Procedures Payment by Direct Debit Process Credit Notes Have Rapport with Payer KPI Days Sales Outstanding

11 How to Maximise Cash - Stock Buy in Economic Quantities Trade Off Price & Holding Costs Use all Stock before Changing

12 How to Maximise Cash - Creditors Understand Pressure of Suppliers Extend Terms

13 Understand your Cash Flow Annual Cash Forecast in Months Split into Component Parts Identify Peaks/Troughs Monitor every Month & Amend

14 I - Information Profitability Flash Reports Accounts

15 Information :Profitability How to make Profit Understand all the Moving Parts

16 Profitability Sales LTA/Rebates Net Revenue Direct Costs – Variable Direct Costs – Fixed Promotional Costs Logistics Costs Brand/SKU Contribution Fixed Overheads EBIT Interest & Tax Profit

17 Breakeven Always understand how much you need to Sell to Breakeven Breakeven INCLUDES your expected Return from the Business

18 Sales Know what your Net Revenue per SKU is from Each Customer Consider all LTA’s – Rebates

19 Costs Always have an Up to Date Bill of Materials Review before each critical business decision Sign off each month

20 Direct Costs - Variable Raw Materials incl waste : Can you resell waste Packaging Materials incl Waste Logistics Inwards for Raw/Pack Currency Implications Direct Labour Direct Energy

21 Direct Costs – Fixed/Quasi Fixed Plant Insurance Supervisory Labour Factory Consumables

22 Promotional Costs Reduced Margin Racks/Ends Fees Multibuy Accruals/Costs

23 Logistics Case cost of Warehousing Case cost of Transport/Distribution to Retailer

24 Fixed Overheads Administration Costs (incl Wages) Rent/Rates Selling & Marketing Costs/Salaries Training Safety & Compliance

25 Information – Flash Reports : Daily Sales – by product / customer Service Levels Stockouts Cash

26 Information - Accounts Monthly P&L, Balance Sheet, Cash Flow Compared to Budgets/Forecasts & Variances noted & explained

27 Information – Accounts : KPI SKU Growth Retailer Growth Average Order Size New Order as % of First Order Debtor Days Working Capital Investment

28 P : People Founders spread themselves too thin Learn to trust others with your Business Have Key skills internally – (Production/Sales/Finance) Outsource your weak areas

29 Capital & Funding Structure Most small businesses have poor capital structures which leads to cash problems when unforeseen issues arise

30 Capital & Funding : Equity Own Equity : Shares & Loans F & F Equity EIIS Scheme Venture Funds/Angels/HBAN Crowdfunding

31 Capital & Funding : Debt Overdrafts Term Loans Asset Finance Invoice Discounting Micro Finance Ireland Covenants : Read Them & Comply!!!

32 Capital & Funding : Trade/Revenue Understand Terms of Trade : Fine line between good creditors management and annoying suppliers Use Revenue – PAYE/PRSI/VAT can be paid at different intervals

33 Capital & Funding : State EI/LEO – myriad of opportunities Priming Assistance Web Site Assistance New Frontiers Programme HPSU Competitive Start Fund Innovation Vouchers Mentors

34 Capital & Funding : State (Grow) Strategic Marketing Market Access Internationalisation International Selling R&D Funds Lean Programmes Green Programmes

35 Internal Business Controls Starts at the Top Owner attitude drives Company Philosophy If a LTD co remember it is not your cash it is the company’s cash and you own shares in the company – not the same Do not treat company funds as your own

36 Internal Business Controls – Why ? Safeguard Assets Prevent Fraud Improve Reporting Encourage Good Management

37 Safeguard Assets Physical Security Access Controls in IT – Passwords/Firewalls

38 Prevent Fraud Most fraud is internal Have Segregation of Duties No one should control all the process (Order to Payment or Despatch to Receipt) Regular Reconciliations – Bank/Stock Compulsory Annual Leave Authority Levels Review & Investigate

39 Improve Reporting Chart of Accounts Regular Management Information Compare to Forecast Do Timely Review, Measure and Manage Staff Competency

40 Improve Reporting VAT Rates Signoff – Issues Cash Payments – Know Implications thereof : For less than 30k provide about 20% for Tax Subsistence/Mileage

41 Encourage Good Management On Site Statistics Sales Growth Days since last accident Improves Morale/Transparency

42 Food Academy Advance - Growth Production Sales & Marketing Distribution Accounting & IT Compliance & Tax

43 Advance - Production Capacity Manpower Maintenance Costs/Shutdowns Availability of Raw/Pack Food Safety Compliance

44 Advance – Sales & Marketing Resources (HQ, Field) Self Service or Distributor Promotions – Costs Promotions – Mechanisms Promotions – Synchronising Accounts & Sales/Marketing

45 Advance - Distribution National Distribution Warehouse – Rotation, Pick Rates, Traceability

46 Advance – Accounting & IT Larger volumes Technical Skills Front End Sales Reporting Budgeting & Forecasting Daily Dashboards Checklists – BOM’s/Revenue/Promo Calendars

47 Advance – Compliance & Tax More scope for difficulties

48 Compliance & Tax VAT Rates Signoff – Issues More scope for Difficulties Cash Payments – Know Implications thereof : For less than 30k provide about 20% for Tax Subsistence/Mileage

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