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. A small bench of field technicians is supplemented by subcontractors. The business holds roughly 5,800 inventory SKUs and serves 200+ active accounts, from small independent operators to national chains. Dispatch, invoicing, inventory and month-end were all handled internally by a team of about a dozen people.

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 purchase-order numbers and billing notes entirely, so jobs closed without the detail needed to invoice them correctly.

New parts created in the field defaulted to the wrong accounting categories — 224 items ended up routing revenue to a generic "Services" bucket and cost to a generic "Purchases" bucket. Because those items were set up as non-inventory, sales never relieved stock. The result was a margin that looked spectacular and wasn't: in one month, a segment showed $125 of cost against $22,000 of sales. Month-end took weeks, produced numbers that had to be restated, and told leadership nothing they could act on while it still mattered.

Other Considerations & Issues:

• Inventory nobody believed. Roughly 200 items sat at negative quantities worth about −$35,000, with a $19,400 gap between the item ledger and the general ledger — caused by unit-of-measure errors, duplicate SKUs and uncounted oversells, not the receiving failure everyone assumed.
• Receivables drifting past collection. 164 invoices totalling $128,693 sat beyond 50 days with no systematic follow-up, alongside unapplied payments, floating credits and invoices mailed to the wrong contact.
• Payments reconciled by memory. 546 card-gateway charges worth $386,000 had never been systematically matched to the accounting system.
• Benefits leaking. Eleven people were covered by group insurance; only four had payroll deductions set up. About $24,000 a year was flowing straight to expense uncollected — including premiums for two people who no longer worked there.
• Costing gaps at the item level. Of 5,824 inventory items, 409 were paired to the wrong cost-of-goods account and 1,093 carried no purchase cost at all.

Solution:

The engagement started with diagnosis rather than cleanup: find the mechanism generating the errors and fix the mechanism before fixing the symptoms. That distinction mattered — the original theory about the negative inventory turned out to be wrong for the main vendors, and acting on it would have double-counted stock and made the costing worse. From there the work ran on two tracks at once: build the systems, and clean the history they would inherit.

• Replaced the off-the-shelf integration between the job-management platform and the accounting system with a custom webhook-driven sync carrying purchase-order numbers, billing notes, deposits, two-way payments and tax codes — with every failure surfaced on an error log a human actually reads.
• Fixed the item-creation defaults that were misfiling new parts, then repointed the historical items to the correct income, cost and inventory-asset accounts — restating cost of goods sold to what it should always have been.
• Rebuilt month-end into a repeatable, scripted close producing three standing reports every month: operations, travel and cost-to-serve, and a financial report with budget-versus-actual variance on every line.
• Put the recurring reviews on a schedule — receivables ageing, card-payment reconciliation, inventory tie-out and benefits recovery, each producing a reviewed worksheet before anything was posted.
• Instituted a review-before-post rule. Every proposed correction is issued as a dry-run worksheet for sign-off first. Nothing hits the ledger unreviewed.

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 in that book turned out to be recoverable rather than imaginary — it rose from 56% to 70% as pricing and cost capture were corrected against numbers that finally tied out. A small recurring revenue line that had been an afterthought grew 270% once it was visible. And because variance now arrives while the month is still actionable, 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%)

The two months that missed plan were both explained by one-time events — a subcontract coverage spike and a one-time trade-show investment.

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

More Profit From a Smaller Team:

Partway through the year the field bench halved, from four technicians to two. The three months that followed were the strongest of the year — with subcontractors covering peaks as variable capacity instead of fixed salaried heads.

Measure	First Quarter (4 Techs)	Final Quarter (2 Techs)	Change
Service revenue	$195,007	$302,260	+55%
Total revenue	$624,786	$675,806	+8.2%
Net profit	$77,053	$113,163	+47%
Employee wage cost	$169,685	$153,840	−9.3%
Wages as % of revenue	27.2%	22.8%	−4.4 pts

Service revenue per technician went from roughly $48,700 a quarter to $151,100 — a threefold lift.

The Rest of the Wins:

• Gross margin recovery worth about $220,000. Had margin stayed where it was, this year's gross profit would have been roughly $220,000 lower.
• $20,000 of inventory cost recovered through corrections to mis-received and mis-valued stock — including a single unit-of-measure error on one line that had distorted cost by $10,500.
• Receivables down $79,851 (−20%), with balances over 90 days down from $50,999 to $39,901.
• Bad debt down 27.9%, from $9,461 to $6,819.
• Benefits recovery formalized — historical cross-company premium invoiced back, payroll deductions extended from four employees to seven, and true monthly company cost cut from roughly $2,600 to $1,100.
• A reporting cadence that actually holds — three standing management reports every month on a repeatable process, replacing a manual close that ran weeks late.

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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 budget the business has now beaten four months running — while carrying half the field team it started the year with.