Case Study: Transforming MetalFab Solutions' Financial Performance

MetalFab Solutions, a specialist in custom metal fabrication for industrial clients, faced growing pains. While orders were increasing, profitability wasn't keeping pace, and cash flow pressures were mounting. They partnered with Schapira CPA to gain financial clarity and build a foundation for sustainable growth.

The Challenge: Growth Without Profitability

MetalFab Solutions encountered several key challenges:

• Inaccurate Job Costing: Difficulty tracking the true cost of materials, labor, and overhead for each custom job, leading to inconsistent pricing and potential underbidding.
• Poor Cash Flow Visibility: Unpredictable cash flow cycles made it difficult to manage supplier payments, payroll, and investment decisions.
• Inefficient Tax Planning: Not fully leveraging available deductions, such as Section 179 for recent equipment purchases, resulting in a higher tax burden than necessary.
• Lack of Actionable Reporting: Standard financial statements didn't provide the specific insights needed by management to understand profit drivers and identify issues quickly.

Schapira CPA's Solution: A Strategic Financial Overhaul

Our team worked closely with MetalFab Solutions to implement a multi-faceted strategy:

• Implemented Robust Job Order Costing: Developed and integrated a system to accurately track direct materials, direct labor, and allocate overhead to each specific fabrication job.
• Developed Cash Flow Forecasting Tools: Created a customized, rolling cash flow forecast model to anticipate inflows and outflows, identifying potential shortfalls and surpluses in advance.
• Optimized Tax Strategy: Conducted a thorough review, identifying opportunities for Section 179 deductions on qualifying equipment and implementing proactive year-round tax planning.
• Created Custom Management Reports: Designed reports focusing on key performance indicators (KPIs) like gross profit per job, machine utilization rates, and labor efficiency, providing actionable insights.
• Provided Ongoing Advisory: Regular meetings to review financials, discuss strategic decisions, and adapt plans as the business evolved.

The Results: Measurable Improvements and Renewed Confidence

The partnership yielded significant positive outcomes for MetalFab Solutions:

• Achieved a **15% increase in average gross profit margin** per job through accurate costing and informed pricing.
• Successfully utilized **Section 179 deductions, saving over $50,000** in taxes in the first year.
• **Reduced cash flow volatility** and eliminated surprises, improving supplier relationships and reducing borrowing needs.
• Empowered management with **clear, actionable financial data**, leading to better resource allocation and strategic decision-making.
• Established a **solid financial foundation** enabling confident planning for future expansion and investment.

"Working with Schapira CPA was a game-changer. Their expertise in manufacturing finance helped us finally understand our true costs and unlock significant profitability. We now have the financial clarity and confidence to take our business to the next level."

Key Takeaways for Manufacturers

MetalFab Solutions' success highlights the critical importance of accurate cost accounting, proactive tax planning, and robust financial reporting for manufacturers. Investing in financial expertise provides the visibility and control needed to navigate growth challenges and maximize profitability.