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Financial transition amid cultural barriers

December 13, 2016 Case Study 3 min read
Food manufacturer achieves a smooth financial and accounting transition with new acquisitions, while improving culture and communication with Japanese parent company.

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The client

A Japanese-owned food manufacturer with a 200+ year heritage acquired two large food brands from a U.S. food manufacturing conglomerate, instantly tripling its annual sales and adding over 150 employees. This acquisition positioned the manufacturer as the largest U.S. market share leader in its food category. 

The challenge

The food manufacturer formed a new U.S.-based company to house the acquired brands but lacked the infrastructure and resources required to absorb the acquisition, and provide the financial reporting demanded by the Japanese parent company. The complexities faced by the manufacturer were myriad: extracting the brands from a large conglomerate, maintaining business continuity with its customers and supply base, and establishing a new entity consistent with the parent company’s culture.
The food manufacturer desired a smooth financial and accounting transition while maintaining a culturally diverse environment consistent with the parent company customs and values. The new venture was in need of a trusted advisor — a “go-to team” with the necessary expertise and experience to help identify issues, and solve problems.

The solution

Our cross-functional team of experts quickly identified and addressed issues related to the client's accounting processes, financial reporting, and internal controls. Leveraging resources from our financial support services, enterprise risk services, Japanese business services (JBS), and food and beverage industry teams, we helped the new company to  hit the ground running. 
Our collaborative approach delivered a smooth transition, created efficiencies, and eliminated redundancies. Our culturally and technically diverse team worked with the manufacturer’s leadership team to create a well-rounded, insightful strategy that went beyond the project to solve increasingly difficult accounting challenges and complex financial issues. We provided project management, communication, team building, and coaching to help decrease costs, shrink cycle times, and capture efficiency savings. 
Our team identified other gaps that required urgent assistance. 
  • Our JBS team quickly identified cultural and language gaps between the parent company and the new company. Our experts acclimated the two companies with the business customs of each other’s cultural environment to remove barriers in the areas of: language preferences, written communication, oral presentations, and the other interoffice norms. 
  • After the implementation of a new ERP system, specific gaps in the new system were discovered. When more granular user-acceptance testing of the new system was performed, large gaps between its system capabilities and enterprise needs were identified. Our experts helped fill in the gaps and troubleshoot all scenarios to provide updated IT-related configurations, allowing the new system to provide management with accurate financial reporting. 
  • While the company’s due diligence had confirmed the assets purchased, its management team quickly discovered a lack of detail on the exact nature of the fixed assets and the composition of its book values. To comply with the Japanese parent’s accounting policies, and to ensure it had appropriate insurance coverage, we developed a physical inventory of fixed assets at their most critical manufacturing facilities. 
  • The employee benefits package of the U.S. entity included a 401(k) plan as part of the compensation package. We reviewed the plan for compliance with U.S. laws and quickly addressed the need to complete an annual audit, keeping the plan in compliance. 
  • We performed an audit of the client’s $250 million in trade spend promotion marketing. Leveraging our advanced data analytics capabilities, we analyzed trade promotion data from multiple disparate systems. Our analysis supported a sample audit of the client’s trade promotion activity which resulted in detailed, actionable recommendations to strengthen internal controls and improve data quality. 

The benefit

A smooth, quick, financial transition for the food manufacturer provided several benefits, including:

  • The assembly and transformation of a new financial and accounting function.
  • Ongoing, timely, and accurate monthly accounting services.
  • Established accounting policies, internal controls, and procedures for the new entity.
  • SAP user acceptance testing.
  • Financial reporting functional transformation and improvements.

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