Unnecessary Costs

Group A appointed a new legal advisor to assist with revising customer software licenses of a retail group. The advisor based his advice on emails forwarded by the owner containing license documents. When the final advice was shared with the general manager, he advised that these were not the final licenses. The differences were significant and the work was redone at significant cost.

Legal Risk and Lost Critical Documentation

D & J created a business together using a group structure that included a partnership, company and trust.
D & J became involved in a legal dispute where the clauses of the trust deed were critical in resolving the dispute. None of the partners, their lawyers or accountants were able to locate a copy of the trust deed which prolonged the dispute by over 12 months.

Financial Risk

Company Y was required to provide copies of its budgets to its bank each year. The budgets often went through several drafts before being provided to the bank in paper and PDF formats. Often there would be subsequent changes to budgets and these were not consistently provided to the bank, essentially causing a breach of covenants and the terms of the loan agreement.

Wasted Productivity

Group B significantly restructured its operations during 2016, making several finance and administration staff redundant. The team responsible going forward has spent significant time trying to locate information required to complete the restructure, having to sort through thousands of files on multiple servers, cloud-storage accounts and paper files as well as liaise with lawyers and accountants.

Incorrect Reporting

Franchisees were reporting daily progress through to the Franchisor on a daily basis. After months of manual reporting, it was noted that incorrect information had been provided by a number of stores within the Franchise group which essentially meant their daily reporting system was based on a work of fiction that was retrospectively not picked until months later through normal accounting practice rather than efficient day-to-day management.