J & B Recycling Limited

Background

J&B Recycling Limited was established in 1994 in a bid to reduce the amount of waste sent to landfill and increase recycling. Now, more than 20 years later, the company has expanded to three UK sites that collectively process over 150,000 tonnes of waste each year.

The requirement

J&B Recycling Limited needed to introduce a system that would enable the business to forecast weekly profit and loss accounts for all of its sites and cost departments.

Due to the weekly change in commodity prices, the managing director was keen to monitor gross profit per site and cost department, which would enable any concerns and potential issues to be identified in a timely manner.

We were tasked with:

  1. Creating a job costing template that incorporated the expected outputs, labour requirements and fixed and variable costs. The template needed to be manipulated based on the trial material received to ensure that the tender price included the agreed margin set by J&B Recycling Limited.
  2. Producing financial forecasts based on two scenarios: financial outputs without new plant investment and financial outputs that took a new plant and process, that had been identified by the managing director, into account.

The solution

We took a comprehensive approach to meeting J&B Recycling Limited’s requirements which spanned leadership, financial accounting, management accounting and fundraising. The specific actions we took in each of these areas included:

• Conducting a business health check
• Identifying points of reconciling financial data
• Introducing a system that is robust and accuate and provides J&B Recycling Limited with timely information for reporting
• Designing reports and setting KPIs that enable the managing director and senior managers to measure outputs, labour hours and gross profit

• Preparing financial budgets based on identified KPIs, benchmarks and expected outputs
• Introducing weekly forecasting of profit and loss accounts from financial data to monitor the weekly outputs against expectations
• Reporting actual monthly profit and loss accounts against financial budget to identify variances

• Designing a pricing model that incorporates actual fixed costs, allows for variable costs to be manipulated for hours, output and labour hours and reflects the company’s KPIs
• Measuring the ongoing tenders against the new model with updated KPIs, benchmarks and labour hours to review for ongoing profitability
• Introducing a pricing model throughout various departments within the organisation

• Identifying any requirements for capital expenditure and the level of funding required
• Investigating the various options for raising money through local and national grants and raising investment monies through venture capital funds
• Producing financial budgets

Results

J&B Recycling Limited has ultimately been provided with the necessary reporting tools to maximise its profits by measuring its KPIs against outputs, labour hours and gross profit.
It’s also been given access to a central pricing model that can be used throughout the entire company to ensure gross margin is achieved in line with its financial forecasts.
We’ve also generated £360,000 in successful grant submissions, which has enabled the managing director to further invest in staff training, media coverage and capital expenditure.
Last, but not least, we secured an unconditional offer of £1.75 million in capital expenditure support from the Regional Growth Fund.
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