The client, the founder and a majority shareholder of six companies based in Hong Kong and China, faced a perplexing financial situation. Despite the strategic use of assets across different legal entities for tax optimisation, the group was consistently unprofitable for a number of years. The root cause was elusive due to the absence of management accounting and the consolidation of books based solely on a financial accounting basis.

To address this, we introduced a comprehensive set of Management Accounts, segmented by LOB. This not only provided a clear picture of each LOB’s performance but also facilitated deeper analysis. For instance, while labor costs were lower in China, the inclusion of associated Travel & Entertainment expenses revealed that hiring Hong Kong-based staff could be more cost-effective.