How Comprehensive Cashflow Management Allowed a Construction Company to Grow During the Covid-19 Pandemic

Published - Jun 09, 2022

Higginsongrey is a construction company that works on high-end residential refurbishments and developments. The company was started in 2013 and has since worked on some of London’s most prestigious residential real estate projects. They are one of the most sought-after specialists for period-listed properties in central London.

GMT Finances COO Taylor Parmenter started working with Higginsongrey 5 years ago. They had been doing their books themselves with some oversight by an accountant. At that time, they had approximately 400-500 transactions per month. The company directors brought Taylor on board because the time they were spending on their bookkeeping was hampering their business growth. Connections are important in the construction industry, so their goal was to reclaim some time for networking.

With extra time on their hands, Higginsongrey was able to develop valuable relationships with related businesses. This has been key in establishing themselves as a premier residential developer for period-listed London properties. Outsourcing their bookkeeping meant that they could focus on the tasks that grew their business instead.

Cashflow Is King In Construction

In the construction industry, cash flow is king. It determines not only the longevity of a business but the projects the company can take on. Without positive cash flow, a construction company does not have the resources it needs to complete their current projects or to win future projects.

Taylor could see opportunities where Higginsongrey could improve their cash flow management and streamline their invoicing process. He had started GMT and presented a pitch to demonstrate how GMT could support Higginsongrey in understanding their cash flow and manage it in a way that aligned with their goals.

“Prior to having GMT on board, we had a good idea of company performance but not in granular detail as we did not have the time to grow our business. So looked at the option of a full-time staff member to manage the accounts department, we then came across GMT, who offered a greater service, at almost 50% of the cost of a FD/CFO level resource. The service that GMT provides goes above and beyond a full-time staff member. They came onboard and quickly understood our needs and challenges. They have implemented a fantastic monthly KPI reporting pack for our monthly board meetings. We now have a full 360-view of our company performance. We have since gone through a period of huge growth which is not slowing down, GMT have given us full confidence in our financial position the targets we need to hit.”

Higginsongrey signed on for comprehensive financial services, including:

• • KPI reporting
• • Management accounts
• • Balance sheet management
• • VAT returns
• • CIS returns

This monthly reporting has allowed the directors of Higginsongrey to gain a full understanding of their financial position. GMT implemented a monthly board meeting to present the financial reports and allow Higginsongrey directors to ask questions about their business finances. In addition to gaining a better understanding of how finances affect their business, this has allowed Higginsongrey to evaluate their financial needs in order to achieve their current and future business goals. These monthly board meetings allow the directors to focus on the future of the business instead of tracking the finances day-to-day.

“GMT have a fantastic customer service. They have also implemented a monthly board meeting to cover all aspects of the business. This allows us to make informed decisions on recruitment and growth of the business. Cashflow is key to the health of any business especially within the construction industry which is a fast-paced environment, GMT manage our operational cashflow giving us a great picture on when we have a surplus of cash to reinvest into our business and when there we expect a slight pinch point.”

GMT Finances introduced a purchase ordering tool to allow Higginsongrey to better track their budget for each project and handle paperwork more efficiently. Ordering materials takes a fraction of the time, and the paperwork is stored securely to make bookkeeping and invoicing more efficient.

Covid-19 Pandemic

The Covid-19 pandemic was a difficult time for the construction industry. In London, all construction businesses had to halt work for 2 months during lockdown. Cashflow management was more important than ever before because Higginsongrey needed to be able to pay all ‘business as usual’ costs.

GMT offered regular consultations to discuss cash flow and discuss contingency plans if construction was halted for longer. These consultations gave Higginsongrey directors confidence in their financial position during a very stressful time. They were reassured that they had options available to them. GMT helped Higginsongrey apply for a CBILS loan to minimise the impact of the pandemic on their business. They prepared the management accounts and financial reports required for the applications.

Quadrupled Business in 5 Years

Taylor came on board as a bookkeeper 5 years ago, and in those 5 years, Higginsongrey has quadrupled their business. They went from 400-500 transactions per month to 2,000 transactions per month.

Taylor’s bookkeeping services allowed Higginsongrey to reclaim time for networking. GMT’s financial services have given them the financial data they need to grow a successful, sustainable business. In the monthly financial meetings, Higginsongrey directors can examine the impact of business decisions on their finances. They can examine the ROI of hiring new staff or taking on particular projects. This financial data has allowed Higginsongrey to accelerate their business growth because they have confidence in the financial viability of their decisions.

“GMT have introduced us to their network of clients which could lead to future work. This comes back to the fact that they go above and beyond for their clients”

Posted in Case Study on Jun 09, 2022