Rebuilding Broken Systems for a 10X Return

ABC Service Company Rebuilds Its Back Office

Client:

ABC Service Company runs an on-site field service operation across a large multi-territory region, carrying parts and supplies inventory to support it. The business serves 200+ active accounts, from small independent operators to national chains. Dispatch, invoicing, inventory and month-end were all handled internally by a small team.

Challenges:

The owner's core problem was that no number could be trusted without someone re-deriving it by hand. The job-management system and the accounting system were nominally integrated, but the connection dropped the detail needed to invoice jobs correctly, and new parts created in the field landed in the wrong accounting categories. Margin looked healthy because cost wasn't landing where it belonged.

Month-end took weeks, produced numbers that had to be restated, and arrived far too late to act on. There was a budget, but no reliable way to know whether the business was hitting it until the quarter was already gone.

Other Considerations & Issues:

• Inventory nobody believed. Hundreds of items sat at negative quantities, with a material gap between the item ledger and the general ledger.
• Receivables drifting past collection. Well over $100,000 sat beyond 50 days with no systematic follow-up, alongside unapplied payments and floating credits.
• No management reporting. The owner had a profit and loss statement and nothing else, no variance against plan, no trend, no view of which parts of the business were actually making money.

Solution:

The engagement started with diagnosis rather than cleanup: find the mechanism generating the errors and fix it before fixing the symptoms. From there the work ran on two tracks at once, repairing the systems feeding the books and then building reporting on top of numbers that could finally be trusted.

• Rebuilt the integration between the job-management platform and the accounting system so job detail, purchase orders, deposits and payments flow through correctly, with every failure surfaced on an error log a human actually reads.
• Fixed the costing at source by correcting the item setup that was misfiling parts, so revenue and cost land in the right accounts and margin reflects reality.
• Built a monthly reporting package delivered on a fixed schedule: an executive summary, full profit and loss, balance sheet, cash flow, and variance against budget on every line.
• Put the recurring reviews on a calendar, covering receivables ageing, payment reconciliation and inventory tie-out, each reviewed before anything is posted.

The Reporting They Get Now:

Every month closes on schedule and lands as a single package. The front page answers the only question an owner really asks, whether the business is ahead or behind and on what, before any detail is opened.

Underneath it sits the detail the business runs on: profit and loss by month across the full fiscal year, a rolling balance sheet, cash flow, and performance against budget. That last one changed behaviour the most, arriving every month while the month can still be influenced.

Impact:

Correct costing changed what the business could see, and seeing it changed what the business did. Once labour and parts carried their real cost, the true margin turned out to be recoverable rather than imaginary, rising from 56% to 70% as pricing and cost capture were corrected against numbers that finally tied out. And because variance now arrives while the month is still live, the company has held the line against plan month after month instead of discovering the miss a quarter later.

Performance Against Budget, 9 Months

Measure	Budget	Actual	Variance
Revenue	$1,788,750	$1,958,068	+$169,318  (+9.5%)
Gross Profit	$1,029,750	$1,322,949	+$293,199  (+28.5%)
Net Profit	$184,540	$280,196	+$95,656  (+51.8%)

Year Over Year, Same 9 Months

Measure	Before	After	Change
Revenue	$1,484,565	$1,958,068	+31.9%
Gross Profit	$836,096	$1,322,949	+58.2%
Gross Margin	56.3%	67.6%	+11.2 pts
Net Profit	$89,789	$280,196	+212%
Net Profit Margin	6.0%	14.3%	+8.3 pts

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Conclusion:

ABC Service Company didn't grow its way out of the problem. It stopped guessing. The company had been running on numbers that were confidently wrong, which meant every pricing, staffing and inventory decision was being made half-blind. Fixing the systems that produced those numbers returned nearly ten times their cost in the first nine months.

The more durable win is structural: a close that finishes on time, a margin the owner can explain line by line, and a monthly report that shows exactly where the business stands against plan while there is still time to do something about it.