CLASSROOM SECRETS LTD.

The Solution

The first thing we did was look at the previous year’s accounts and quickly discovered that due to both Covid-19 and the fact that schools had been closed, using these figures to ascertain the current allocation % would not be useful. Forecasts were then prepared which were to be used to ascertain the target % allocations and we used these figures for the 2 weekly allocations. We started to meet with the client online every two weeks to ensure the % allocations were done correctly and to 'sense check' in order to make sure that there were sufficient funds in the OPEX account to cover the overheads for the next 2 weeks. 

The client quickly discovered how important cashflow was, the direct impact of schools paying her on time and the ability to allocate money to herself and to the 'Profit Account'. The director now does the allocations once a week as it enables her to be right on top of the finances and can quickly see if there are any pending cashflow issues e.g. the schools are late in paying their invoices.  

We also discussed the issue of the schools being closed during the summer holidays and decided to open another bank account called the 'Debt Account' to put funds away to cover the summer holidays so that the wages and other overheads can be paid without causing any issues to the cashflow.  

The client has already seen the benefit in her pocket as the company paid her a bonus from the 'Profit Account' for the first time last month.