Outsourced Fractional CFO Case Study

Case Study: Transforming Profitability for XYZ Company

Industry: Third-Party Logistics (3PL)

Provided Service: Fractional CFO

The Challenge:

XYZ Company, a growing third-party logistics provider, was dealing with chronic financial uncertainty. Despite having a controller and bookkeeper on staff, the CEO lacked insight into the company’s financial health.

Departments like Fulfillment, Shipping, and Rent/Storage operated in silos, making it difficult to track costs and profitability. The result was frequent fundraising and financial instability.

Enter River Edge Advisors.

Our Approach:

1. Financial Restructuring: We overhauled financial reporting by creating department-specific profit-and-loss statements as well as profit and loss by each warehouse. This gave clarity on the performance of critical areas: Fulfillment, Shipping, Projects, and Rent/Storage by location.

2. Identifying & Implementing Cost Savings:

• Fulfillment Department:

  
  

  By observing the inefficiencies with current staff and differing margins across locations, River Edge recommended investing in new technology streamlined operations, reduced staffing needs, which resulted in increased margins from 20% to 48%.

  
  

• Shipping Department:

  
  

  By studying the carriers cost by packaging and location. River Edge recommended a review of freight carriers which led to strategic partnerships and volume-based discounts as well as rebates, increasing margins from 18% to 35%.

  
  

• Rent/Storage Department:

  
  

  By studying different warehouses and efficiencies/inefficiencies in each. River Edge was able to recommend operational efficiencies and with renegotiations raised margins from 25% to 38%.

  
  

3. Cash Flow Optimization: With River Edge managing cash flow, the company transitioned from survival mode to a proactive financial strategy.

Results:

1. Profitability Gains:

   
   

   Department margins improved across the board, with Fulfillment, Shipping, and Rent/Storage showing significant increases.

   
   

2. Growth Over Time:

   
   

   Revenue growth and profitability trends showcased a clear upward trajectory.

   
   

3. Transparency:

   
   

The best client is one that understands our value. At River Edge we walk our clients through their financials so that they can make decisions based off detailed and analyzed information.

4. Strategic Exit:

   
   

   With enhanced profitability and financial stability, River Edge Advisors facilitated a smooth sale of the company, maximizing value for the stakeholders.

   
   

Why River Edge Advisors?

River Edge Advisors doesn’t just provide fractional CFO services; we transform businesses.

At River Edge Advisors, we provide comprehensive financial services tailored to meet the unique needs of your business. Our offerings include:

1. Bookkeeping Services

   • Accurate and timely recording of financial transactions.

   • Bank and credit card reconciliations.

   • Maintenance of the general ledger for reliable financial reporting.

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2. Accounts Payable Management

   • Efficient vendor management and payment processing.

   • Expense tracking and categorization.

   • Ensuring compliance with payment terms to optimize cash flow.

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3. Fractional CFO Services

   • Strategic financial planning and budgeting.

   • Cash flow forecasting and management.

   • Profitability analysis and growth strategies.

   • Financial reporting and presentation to stakeholders.

     
     

Our team ensures that your financial operations are streamlined, enabling you to focus on growing your business while we handle the numbers.

📍 Ready to elevate your business? Visit www.riveredgeadvisors.com or call us 516-284-0112.