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Case Study 3

Case Studies

Pacific Resources Group Combined Service Offerings, Simple P&L and Simple Settle, to Support the Needs of a Northern California Home Builder

Introduction

A Northern California Home Builder faced significant financial hurdles, including a debt related legal issue that threatened its operations. Recognizing the need for professional financial guidance, the client engaged Pacific Resources Group (PRG), a firm offering Financial Systems Management, Virtual Bookkeeping Services and Debt Negotiations through their subsidiaries Simple P&L and Simple Settle. This case study explores how PRG’s comprehensive financial support, including Financial Systems Management expertise provided by Joe and ongoing bookkeeping and accounting management by Orm, helped the client navigate challenging financial times, streamline financial operations, and gain valuable insights into the company’s financial health.

Background

The construction industry is characterized by intricate financial management due to project-based accounting, fluctuating costs, and regulatory compliance. This company operated within this challenging landscape, and the added pressure of a lawsuit further complicated its financial situation. The client needed a reliable partner to manage the company’s finances, provide strategic guidance, and ensure compliance with accounting standards.

PRG’s Simple P&L Services

PRG offered a tailored solution that combined Financial Systems Management services with comprehensive bookkeeping support. Joe, a seasoned financial expert with a deep understanding of the construction industry, served as the Financial Systems Manager. Orm, a skilled Client Services Manager with expertise in bookkeeping and accounting, provided ongoing support in managing day-to-day financial tasks.

Financial Analysis and Insights

Joe initiated a thorough financial analysis, focusing on cash flow, profitability, and risk exposure. This analysis, combined with Orm’s meticulous bookkeeping, provided the client with a clear and accurate picture of the company’s financial health. Key areas of focus included:

Cash Flow Management: Joe worked with the client to optimize cash flow by analyzing revenue and expense patterns, identifying areas for improvement, and implementing strategies to enhance liquidity. This included streamlining invoicing and accounts payable processes, and closely monitoring project budgets. Orm’s role in maintaining accurate and up-to-date bookkeeping records was essential in providing the necessary data for the analysis and recommendations.

Profit-First Analysis: Joe conducted a detailed profitability analysis by project and company-wide, examining revenue, costs, and margins. This analysis helped the client identify high-performing projects, areas where costs (and time) could be reduced, and opportunities for pricing adjustments. Orm’s ongoing bookkeeping support ensured that project costs were accurately tracked and allocated, enabling Joe to provide reliable profitability insights.

Risk Assessment: Joe assessed the company’s operational risk exposure and helped quantify certain elements into their respective impacts on profitability. Some of those elements included proper bidding procedures, change order policies, time management & slippage, inventory management, and subordinate (in-the-field) leadership improvements. The client gained a variety of fresh perspectives, enhanced business leadership characteristics, a comprehensive understanding of the company’s risk profile, and worked hard with PRG to develop risk mitigation strategies. Orm’s role in maintaining organized financial records and ensuring compliance with accounting standards was crucial in supporting the risk assessment process.

Financial Workflow Optimization: Joe, Orm, and the client worked together to enhance and optimize financial workflows, ensuring that all financial processes were efficient, accurate, and aligned with industry standards.

Strategic Financial Planning

Building upon the financial analysis, Joe collaborated with the client to develop a strategic financial plan. This plan addressed both short-term challenges, such as managing cash flow during challenging times, and long-term objectives, such as improving profitability and ensuring sustainable growth. Key elements of the plan included:
 
Financial Forecasting: Joe created financial forecasts that projected revenue, expenses, and cash flow under various scenarios. This allowed the client to anticipate financial needs, make informed decisions about resource allocation, and proactively address potential challenges. Orm’s accurate bookkeeping data served as the foundation for these forecasts, ensuring their reliability and relevance.
 
Budgeting and Cost Control: Joe assisted the client in developing and implementing a budgeting process that aligned with the company’s strategic goals. This included setting project budgets (time & money), monitoring actual costs against budgeted amounts, and identifying variances. Orm’s role in tracking expenses, reconciling bank accounts, and providing regular financial reports was instrumental in maintaining budgetary control.
 

Ongoing Support and Collaboration

Joe and Orm provided continuous support to the client and the company throughout the engagement, which continues to this day. A key component of this is regular financial reporting. Every month, Orm generates timely and accurate financial reports, including profit and loss statements, balance sheets, cash flow statements and various Key Performance Indicators (KPIs). These reports provide the client with a real-time view of the company’s financial performance and enables informed decision-making. 

Successful Navigation of the Problematic Debt Issue

PRG’s subsidiary, Simple Settle, along with their outside referring attorney network played a crucial role in aiding the client through complex negotiations.  By effectively managing the financial aspects of the settlement process and minimizing its impact on operations, PRG provided comprehensive support while the outside referring attorney managed all litigation aspects. The combined financial management services of Simple P&L and the negotiation expertise of Simple Settle optimized the company’s performance on multiple fronts. This integrated approach ensured that both the financial and legal challenges were addressed efficiently and properly, allowing the client to focus on core business activities while mitigating risks and enhancing overall stability.

Results and Benefits

PRG’s Financial Systems Management and Virtual Bookkeeping Services through Simple P&L, along with, Negotiation Services through Simple Settle have delivered significant benefits to the client and the company, including:

Successful Navigation of a Troublesome Debt Issue: With PRG’s support, the client was able to manage the financial aspects of the claim effectively, minimizing its impact on operations, and ultimately reaching a financial settlement.  

Improved Financial Performance: Joe’s financial analysis and strategic planning helped the client improve cash flow, profitability, and risk management.

Enhanced Decision-Making: The client gained valuable insights into the company’s financial performance and risks, enabling informed and strategic decision-making.

Focus on Core Business: By outsourcing Financial Systems Management and bookkeeping responsibilities to PRG, the client was able to focus on their core business.

Conclusion

PRG has over 15 years of experience in debt negotiations and settlements. However, please note that results may vary. Each case is unique and influenced by multiple factors including, but not limited to, the amount and type of debt, the debtor’s financial situation, and the creditor’s willingness to negotiate. Therefore, while we strive to provide the best possible outcomes, we cannot guarantee specific results.

About Pacific Resources Group (PRG)

Pacific Resources Group is a leading provider of settlement negotiation services. They are committed to helping businesses resolve problematic debts quickly and efficiently. With a team of experienced negotiators, PRG has a proven track record of success in transforming financial challenges into opportunities for growth.

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