My monthly business reports are crystal clear, and have directly resulted in saving large sums of money, and increased profitability.

Tree of Life Wellness Systems
Case Study

Tree of Life Wellness Systems is a medical practice that uses holistic and natural techniques to treat chronic health conditions and recommends a regimen of exercise, diet and nutritional supplements to create and maintain wellness. Dr. Todd Nelson, ND, owner, is also an accomplished author and radio talk show host.

Dr. Nelson started as a solo practitioner and built the business to one with four practitioners at its peak. While blessed with many years of growing revenue, net profits were never high and Dr. Nelson’s take home pay did not come close to matching the effort he put in. TLWS suffered a severe downturn because it lacked the accurate business data to react quickly and strategically when unforeseen circumstances arose. Cash flow fell sharply and caused bills to go unpaid, forced the business to take on additional debt and prevented Dr. Nelson from taking a salary for four months.

Professional Financial Management Needed

Dr. Nelson came to the realization that the people he hired to manage his business were caring and well-intentioned, but they lacked the knowledge and experience to get him out of his predicament and then set him on the right path. His bookkeeper, for example, did not know how to properly record complex sales transactions. As a consequence, TLWS was unable to complete sales tax returns timely and accurately. The business was audited and had to pay additional taxes along with interest and penalties.

Dr. Nelson decided he needed a professional financial manager who was also skilled in operations.

Information Challenges Faced First

Mindful’s first task was one of its most challenging. TLWS had inaccurate accounting records and its technique for using QuickBooks made it impossible to tell where the business stood. Dr. Nelson assumed he was losing money, but could say how much or why. Without this and other critical information he couldnot hope to devise a successful turnaround plan.

Mindful first re-configured QuickBooks. We established a chart of accounts that classified revenue and expenses by category. At a glance, Dr. Nelson could see how much money was being spent on employees, marketing and other important areas. He could also determine which products were the best selling and the amount of margin earned on each. When compared the amount of inventory on hand, Dr. Nelson was able to make vital choices that allowed him to reduce inventory by more than half.

Once the reporting structure was built, attention turned to correcting errors. A new technique for recording sales was invented. Accurate posting of these daily transactions made it possible to track sales by category and quickly produce sales tax returns.

On-Going, Proactive , Financial Management Final Piece of Puzzle

With the ship righted, TLWS needed help figuring out its profitability path and then staying on it. These goals were accomplished by Mindful providing bookkeeping and CFO services. Financial reports were now accurate and prepared according to proper accounting principals. Weekly cash flow projections helped Dr. Nelson to match cash inflow with outflows. Late bill payments became a thing of the past. Learning the minumum amount of weekly revenue required to fund operations was an important byproduct of the service.

The Global Business Review™, was introduced on a monthly basis to regularly analyze the business from the ground up and articulate the big financial picutre in easy to understand language. Specific recommendations for improvement were provided and a variety of financial, operational and proprietary reports helped Dr. Nelson view his business from many perspectives. All this support helped him to reduce inventory by 40%, increase the size of the average product sale by 70% and improve his liquidity by almost two times.

Dr. Nelson knows he is on the right path and has commented that “My monthly business reports are crystal clear, and have directly resulted in saving large sums of money, and increased profitability.”.