The Situation
Growth outpaced governance
The client was a high growth strategy consulting firm. While the Management was exceptional at winning business, their back office was, in their own words, “a shoebox of receipts.” They approached us four weeks before a critical bank renewal meeting. Their previous “audit” was a basic compliance exercise, from a low-cost provider, that was not fit for purpose. The books showed significant unreconciled differences, and to make matters worse – they had a tax issue! VAT on certain standard rated cross border advisory services had been incorrectly zero-rated for two years, creating a hidden liability.
Our Approach
A three-week high-intensity engagement
Our experienced team deployed a structured, intensive engagement across three workstreams running in parallel.
VAT Health Check
We immediately isolated the zero-rated services and quantified the voluntary disclosure liability. We posted the necessary adjustments and worked with management to submit a voluntary disclosure statement to the FTA promptly.
Revenue Recognition Reset
We identified errors in revenue recognition and provided live feedback on the correct treatment under IFRS 15. The consultancy fee was billed in stages. Based on our feedback, management implemented a strict input vs. output method for work in progress, shifting the balance sheet from a vague estimate to a precise reflection of unbilled revenue with a formidable audit trail.
Live Feedback Throughout
We held multiple progressive meetings and a closing session with management to walk through the normalisation of adjustments. Management was able to present and rely on the numbers far more confidently than in previous periods.
Outcome
From shoebox to credible asset
The stakeholders relied more heavily on the audited numbers. More importantly, the Management now receive a monthly management reporting pack that actually helps them run the business rather than just satisfying the regulator. They no longer fear the “shoebox” at year-end.
Key takeaway
RAA Perspective
Due to a hands-on Partner involvement that is distinct to a mid-tier practice, we actively seek to provide feedback rather than leaving it for the end. The outcome transcends basic compliance; it is the conversion of financial disorder into a clear and credible asset.