Current Business Review

The Client

An Air Conditioning and Mechanical Services engineering firm with a C. £6m per year turnover. Involved in the installation and servicing of plant in mainly commercial premises. The company also has a division that specializes in service and maintenance of all related heating, air conditioning and mechanical services.

Situation

The Company had grown rapidly in the previous thirty six months and was considering expansion of its scope of services. The Board was unsure of the future direction or the type of structure required. The rapid expansion had led to credit control problems with some £1.6m of uncollected debt. A mentality had developed, within the installation engineers, who had difficulty accepting, that the methods of control and implementation acceptable in a £1.5m company where not suitable for a larger organization.

Implications

The lack of an agreed internal structure meant that senior executives had a tendency to "cross over" into each others areas of responsibility and to not delegate to well informed subordinates. The failure of the credit control procedure ensured that the company's Bankers where unhappy with breaches in lending agreements. The reporting methods and management structure for each project led to a lack of financial control.

Needs

The Board needed to review its core business, to understand how its customers viewed the company, where the company stood in the marketplace, where its intended expansion could take it and at what cost and to bring its credit control procedures into line, thus repairing its Banking relations.

Solution

PTC spent ten days within the company and with its clients, reviewing management's perception of their current situation, their customer's perception of their company and where the Board believed their expansion plans would take them. PTC prepared a discussion document that set out A WAY FORWARD to put in place New Standard Procedures to bring about increases in efficiency, an internal structure with relevant job descriptions and produced a Company handbook. The new credit control procedure assisted the accounts department in redefining the company's trading terms and conditions. Debtors were reduced in the following five months to £720,000.