If you work on a finance team long enough, you get to hear lots of stories. Some of them you’ll take to the grave. Some, you can anonymise a bit and share with the team. This is one such story. A customer of ours, let’s call him Gary, was tasked with incorporating a newly acquired business into the group. It was a great chance to expand into a new market as well as pocket some well deserved cash-flow. The deal was done, the CEO was happy and it was time to start bringing the new company into the fold.
The new business was a bakery and they seemed to have no problem making the dough (sorry). The bread was rolling in (that is the last one I promise). For the first six months, it seemed as though this was a great buy.
Then one day $200k worth of invoices arrived on Gary’s desk.
Out of nowhere.
It turns out that it’s pretty easy to turn a profit as a baker if you don’t have to pay for materials. Ops were happily receiving flour and equipment from local suppliers like it was Christmas. “Ops know where the bodies are” laments Gary and the new acquisition was starting to look more like the walking dead than a sweet buy.
Before long, the new acquisition was dead in the water. 20 jobs were lost and Gary started looking for a new job. “Ops were just too lazy to do the paperwork and it killed the business”, says Gary and there was nothing he could do about it.
Have a financial horror story to share? Email [email protected] or leave a comment below.
