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What is financial turnaround?
Understanding the underlying causes of financial difficulties, operational under-performance and seeking advice early are key to securing a company’s long-term future. In doing this and engaging in our financial turnaround service our team can help you achieve recovery of your organisation. We do this through:
- stabilising the business;
- identifying the causes of underperformance;
- preparing a robust action plan and options; and
- keeping management in control.
When is financial turnaround needed?
Financial or operational underperformance can often be a contributor to distress within a business. Without quick decisive action a company may see its value destroyed or ultimately fail.
Signs that your organisation should look for turnaround advice include:
- reduced profit margins;
- increased debtor/creditor days;
- working capital increasing; lack of management information to manage a growing or shrinking business;
- overtrading;
- constrained or lack of free cash flow;
- high staff turnover;
- declining credit rating or reducing credit limits;
- market changes or sector issues; and
- inability to service loan or debt repayments.
Why is it important to seek financial turnaround advice early?
The earlier our clients seek our turnaround team’s help, the more time there is to implement short and long-term solutions. While we appreciate that this is easier said than done, it is important to obtain advice on current or forecast operational or financial challenges early.
Seeking advice too late can remove options which may have been appropriate causing a company to:
- move into terminal decline;
- suffer a detrimental loss in value;
- lose control to external stakeholders; and
- become insolvent.
How can RSM support your financial turnaround?
A turnaround can comprise a number of components which require multiple skills to deliver a successful outcome. We quickly identify challenges and leverage RSM’s local and global resources to:
- support management removing stress or pressures to allow them to focus on the day to day running of the organisation;
- stabilise cash and operational performance to give time to implement a turnaround identifying quick wins;
- manage stakeholder and creditor relationships;
- assess the underlying viability of each component of an organisation including its operations, finances and strategy; and
- secure funding to support the turnaround.
