Ewan Ogilvie is no stranger to hard work. From his workshop in Fenton Barns – a tiny hamlet in East Lothian, Scotland – Ewan crafts bespoke furniture for businesses and private clients looking for something unique, original and beautifully made.
“I was approaching 40 and I had always wanted to set up my own business,” said Ewan, who retrained as a furniture maker after 11 years in the accounting business. He set up his own business, Ogilvies of Haddington, in 2013.
But even as an ex-accountant, the hard work Ewan was putting into keeping his cash flow spreadsheet up-to-date once his new venture became a limited business in 2018, never felt like the best use of his time.
A slicker way to manage cash flow
“It all got a bit more complicated and I realised I couldn’t keep tabs on things in a spreadsheet.”
With five new employees, new premises, income from a grant, and repayments on a loan to plan for – Ewan decided it was time to look for a better way to manage his business’s cash flow.
“The fact that a small business can get access to software that can do exactly the same as what a custom built internal solution used to do when I was an accountant is brilliant.”
“When you’re very small and you’ve got hardly any expenditure, you can deal with that on a spreadsheet basis. But after a while, when you’re spending such a long time updating lines and lines and making sure the links are all working correctly, then you’re far more likely to make a mistake. It was becoming such a distraction and it was just taking up far too much time.”
Ewan estimates he used to spend 1-2 days in spreadsheets every week.
“I was getting to a stage where I was constantly having to update it (the spreadsheet), but the amount of time I was spending trying to maintain this spreadsheet was just ridiculous. It was a total distraction. So I started looking for a slicker way of doing it.”
Ewan found the perfect solution in moving to Xero and Float. Today, Ewan estimates his cash flow forecasting now takes only 2 hours per week at most.
When he was an accountant, Ewan had access to a purpose-built accounting software for the organisation he worked for. There was a team of people doing upgrades to it and always maintaining and developing it. “When you’re on your own, you don’t have the money to afford something expensive. I was quite surprised that between Xero and Float, the functionality I have now feels as good as what I had before.
“The fact that a small business can get access to software that can do exactly the same as what a custom built internal solution used to do when I was an accountant is brilliant. The integration between the two is so easy in terms of not having to update multiple systems, in fact, it’s almost slicker.”
From 1-2 days to 2 hours, Ewan now has more time to focus on his growing business and the challenges faced by any bespoke furniture company emerging from a global pandemic.
Dealing with lumpy cash flow
Ogilvies of Haddington specialises in cabinets, kitchens and beds made from Scottish hardwood, specifically designed to meet a client’s brief. This isn’t your typical off-the-shelf, mass produced MDF furniture. Ewan tells us he has made several ‘ridiculous sized beds’ for children: one with 4 bunk beds and a staircase up the middle, complete with a secret compartment where the kids could pass things to each other. This is furniture you’re not going to find in your average shop.
Because of the niche nature of the product, lumpy cash flow has posed a real issue to Ewan’s business.
“Because it’s all one-off, it’s difficult to judge how long things will take. Plus we’re at the mercy of other trades, as we’re quite often the last in when someone’s refurbishing a property.”
On a large project, Ewan and his team typically get paid through a deposit, followed by a final payment. “But I can sometimes be waiting weeks or months for that final payment.
“We don’t have a lot of working capital at all so it’s a real juggle to make sure that we can afford these lumpy elements, things like VAT and PAYE. You can’t just do that on a spreadsheet, because I’d have to change all the cells so often and things change so regularly.”
“I now know precisely what amount of cash we need.”
Float has helped Ewan stay on top of this lumpy cash flow.
“With Float, it’s quick and easy to make an update. The changes (Float has) made around budget setting have been brilliant for us. The way that budgets are now, I can fine tune that much more easily and get a daily budget I can trust.”
Making plans for the future
So what does the future hold for Ogilvies of Haddington? Using Float’s scenario planning feature, Ewan has been able to work out the impact of important business decisions. From what priority to give to certain projects, to whether he has to bring a certain project forward to get the income his business needs and avoid a cash gap.
“Sitting down to scenario plan in spreadsheets would just be quite a painful experience. It’s not up to date and you’re always left with a lingering doubt whether you’ve actually factored everything in properly.
“I now know precisely what amount of cash we need, and if we fall below it over the next few months, we know we’re in trouble. If we can get over that line then we’re going in the right direction.”
Carving out more time
“Time is so difficult – I’ve got a big family and there’s just not time in the day to keep on top of things and do everything. So if there are small ways that I can make time savings by taking on something like Float, it just saves so much time and avoids things falling through the cracks.
“If I hadn’t found Float, there would have been an awful lot of unexpected, unpleasant surprises financially. Time-wise, I would have broken one way or another – I couldn’t have kept devoting the amount of time I was to maintaining the spreadsheet.”