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Example FDD Project
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Scope
Historic
Process
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Process

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Scope
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:

Key (financial) reporting structures including finance team staff and functions, systems used (finance, CRM, pipeline), monthly close process and timeline, annual accounts timeline, capex appraisal process and authority limits, expenditure approval process and authorisation limits and any other key controls in place.

1️⃣ Current processes

Form an assessment based on our experience

Finance Team

X, CEO (overall financial responsibility)
X (financial support)
X, Bookkeeper & Operations (financial processing)
Responsibilities
0
Reponsibility
Who?
Internal/ External
1
Management and oversight
CEO
Internal
2
Management accounts and reporting
CEO/ X
Internal & External
3
Daily/Monthly Bookkeeping and accounting
X/ Bookkeeper
Internal & External
4
Finance support and advice
X
External
5
Payroll
Bookkeeper (using Xero)
Internal (system)
6
Annual Accounts, Adjustments and Tax Return
X
External
7
R&D Tax Credit
X
External
There are no rows in this table
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Monthly close process and timeline
Month-close doesn't close and some invoices come in late - e.g. Dec management accounts have Nov (and sometime Oct) changes. Management packs are produced and presented by X alongside other KPIs. Taken by X to board.
Annual Accounts Timeline
Two months after year-end. 4 weeks to run through X and X, debtors/ creditors, look into the P&L (accrue/ provide).
R&D work (undertaken by an outsourced provider by X) then done: 2-4 weeks. Meanwhile accounts are presented in draft by X to the Board.
Regular Processes
0
Process
Current Process
Manual/ Automated
Comment
1
Calculating work undertaken by suppliers and for clients.
Deliveries made by suppliers are tracked on a supplier-by-supplier. Each supplier has a costlet for each client. An expectation of each job cost is calculated and compared to the invoice sent through from the supplier.
Automated with manual intervention
n/a
2
Paying suppliers for work undertaken
Suppliers invoice on a monthly basis in a variety of formats (excel, csv, pdf, etc). Based on information from their systems. Invoices are checked to expected costs. Variances (due to waiting times, etc) are checked and challenged (% materiality used). Once approved invoices are paid in the usual course of business.
Manual with reporting from system
The variations, checking and challenge of supplier invoices is mostly manual and time-consuming. In addition, delays can occur if supplier is slow to bill.
3
Invoicing clients for work undertaken
Invoices are raised to clients based on
Manual with reporting from system
Lineten wait to invoice clients once supply-side bills have been agreed - this reduces the financial risk of undercharging clients but hurts cashflow.
4
New Customer
Sales team onboard a new client and agree payment terms and client agreement. Clients are invoiced based on the fees within their agreements.
Manual
n/a
5
New Suppliers
Suppliers are onboarded and SLA put in place detailing financial metrics that are used within the system to calculate expected job costs.
Manual
n/a
6
Financial Accounting
Bookkeeping is undertaken by Bookkeeper and management accounting is produced by X. X prepare statutory accounts and HMRC comps.
Manual with reporting from system
n/a
7
Payroll
Payroll is run by Bookkeeper on a monthly basis using Xero's payroll functionality. PAYE is automatically calculated and payment made to HMRC.
Automated with manual intervention
n/a
8
Capitalisation
Capitalisation undertaken by X on an annual basis for small office purchases (e.g. laptops). No intangible asset has been created.
Manual with reporting from system
n/a
9
Expenditure approval and authorisation
Expend used by employees to manage expenditure. Central limits set on a monthly/ per trnasaction basis.
Automated
n/a
There are no rows in this table
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Systems Used
0
System
Software
Notes
1
Accounting
Xero
n/a
2
Sales Invoices
Xero
n/a
3
Purchases and Payables
Xero
n/a
4
Reporting from platform
Bespoke product
Internal reporting is used to corroborate financial information received from suppliers (e.g. delivery time, wait time, etc)
5
Receipts
Expend (moving to Pleo)
n/a
6
Other internal
Hubdoc (receipt management)
n/a
There are no rows in this table
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Assessment of Current processes

Current processes are broadly in line with our expectations for a company of this size. However, there are weaknesses in the following processes
supplier invoices
delays occur in finalising supplier invoices due to (1) delays in suppliers producing and sending these through (2) queries and amendments required when received by X. This has a knock on effect for cash-flow as cash is tied up in debtors/ creditors.
close of month-end
delays in finalising supplier invoices has a knock on effect for billing of clients and closing month-end. management accounts are often late and numbers can change 6-8weeks after the end of the month.
manual intervention
invoices received are checked manually to the X system, which is a cause of delay and potential error.

2️⃣ Future processes

Form an assessment based on our experience
Change in Processes
0
Column 1
Future Process
Manual/ Automated
Comment
1
Paying suppliers for work undertaken
Self-invoice suppliers based on the information within X system. Self-invoices raised by X and sent to the supplier on a monthly basis. Supplier checks the invoice and can query within a short time-period.
Automated.
This will speed up the process and reduce X cashflow issues from supply-side delays. Automation here will reduce errors and time taken.
2
Invoicing clients for work undertaken
Invoicing clients based on expectation of supplier costs and historical/ market data.
Automated.
Linten take the risk that costs are higher than revenue. This is mitigated by strong buying power as an aggregator of supply-side putting downward pressure on cost.
There are no rows in this table
2
Count
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Staff

Forecast staff count is to double meet the revenue growth targets. This includes, the build of a large sales and marketing team to bring on clients (up to 124 heads). In addition development team is roughly doubled from 120 to support the product development. Non-UK heads are budgeted in each territory as they go live.
Forecast of staffing are in line with the general areas that we would expect to see for this type of business with a key focus on sales & marketing teams, alongside developers.

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