• February 19, 2026
• By Rick Arthur
• In Accounting Department, cash flow forecasting, Chart of Accounts, Financial & Accounting Infrastructure, Profit Plan, Tax Planning
• No Comment
• 10

Client Snapshot:

A growing, closely held, specialty commercial contractor serving the Colorado Front Range with revenues of $10M+.

 Challenge:
This successful company was not unlike many of the clients I work with. The owners had been experiencing growth, but substantial gaps in financial reporting negatively impacted how they were making decisions and doing business. It was as if they were flying without instruments.

Although they were making money, the company had become more difficult to manage as it grew, with complexities manifesting themselves in both people and profits while cash flow became a problem. There were key red flags:

• The owners were doing their own bookkeeping without the necessary experience.
• There was no information to indicate whether they were profitable and if so, where those profits were generated.
• The bank account was not reconciled monthly, leaving the owners blind to where they stood financially until year-end.
• April’s tax deadlines were challenging for the tax CPA due to a lack of financial documentation.

Objectives:
The problem was evident: there was no financial and accounting infrastructure in place to generate meaningful numbers regularly and accurately. A sound foundation needed to be built, including a chart of accounts – the cornerstone of a good accounting system – which was non-existent. An experienced bookkeeper needed to be hired to manage their books.

Approach and Key Actions:

• The first decision was to start a new set of books rather than try to salvage the existing ones to know that the books going forward would be accurate.
• A new chart of accounts was created to provide the information needed to run the business.
• A qualified bookkeeper who already knew and understood the company was hired.
• Systems and processes were developed and implemented for bookkeeping and accounting, including a schedule for closing out the books at the end of each month to keep the owners aware of where they stood financially.
• The cleanup process of the old books was started to determine account balances and how much cash was available.

After almost six months of cleanup work on the old books, we had opening balances for the new QuickBooks company account. The process had been like working on a car’s engine while driving down the road at 60 miles per hour. The company couldn’t stop doing business, which meant we had to enter transactions in the old set of books for a while. About two months after putting a qualified bookkeeper in place, setting up the new QuickBooks company, and appropriate chart of accounts, we were ready to start entering transactions in the newly created books.

Results and Impact:
With books up to date it quickly became obvious that one of the company’s revenue streams was not producing. Accurate financials provided the data necessary to identify which revenues were producing the highest gross profit, enabling the owners to focus on expanding those areas and increase net income.

A profit plan, aka comprehensive budget, was developed along with cash flow forecasting – cornerstones for getting the business turned around. The profit plan was structured with the flexibility built in to allow revisions every 90 days, made possible with accurate and timely financials.

The most rewarding outcome of this focused endeavor was that the owners were able to sell the company for a price that gave them the freedom to live with less stress, do more vacationing, and start other businesses.

Key Take Aways:

• Accurate and timely financial statements inform and validate business decisions.
• Forecasting improves the ability to manage cash flow.
• The profit plan can be reviewed and revised quarterly based on the prior quarter’s results, including moving resources to growing revenue streams, and adjusting business operations.
• A solid finance and accounting infrastructure, professional bookkeeping help, and clean books that validated profitability enabled the owners to sell the business.
• Knowing your numbers facilitates business growth with the added benefit of reduced stress and a more solid financial future.
• Lesson Learned: It’s essential to have the right financial and accounting infrastructure in place from day one. If you are ever uncertain of where you stand, it’s time to take action and get your financial instrument panel working before you lose control.

Although the owners of this business expressed that, “We wish we had done this earlier,” they rose to the challenge of working the plan that was designed for them when the pain of dealing with their issues was sufficient to motivate change.

One of the greatest rewards of my work is seeing not only the positive changes in companies but the excitement of business owners who benefit and realize their goals after establishing a solid financial infrastructure. The light bulb goes on when they realize these changes make it easier to make money without having to fundamentally change what they do.

I’d welcome the opportunity to help you change not only your business operations and profitability, but change your life for the better, too. Contact me for a complimentary consultation to discuss your specific situation and needs, and the results you can expect when working with me.

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