Dawson Insurance Brokers

Insurance brokers place a premium on good accounting advice.

How Frank helped Dawson de-risk its business and set it up for growth.

Insurance brokers have to deal with a complex and fast-changing regulatory environment. Beyond that, their entire business model is under threat. With younger customers moving online, the whole idea of buying cover through a broker is being questioned. There’s also the need to recruit fresh talent and continuously upskill current employees while nurturing profits year on year and laying the groundwork for a profitable exit. Based in the Bay of Plenty, Dawson had built a strong insurance broking brand over several decades. Transitioning to a new management team provided the perfect opportunity to re-assess the company’s accounting needs, bed-in new processes and plan for a strong future.

10-second summary

  • Challenge: How can an established insurance broking business sharpen its financial performance to reinforce its viability in a very competitive market while building long-term value for its owners?
  • Solution : Set up a new accounting system with more detailed and accurate reporting that reflects the true financial position. Develop strategic and operating plans, and keep everyone accountable for delivering them, with regular management catch-ups and quarterly board reports.
  • Result: Dawson has achieved many of its five-year goals in less than three years. With accurate real-time reporting, management can focus on growing the client base and investing in the team rather than poring over opaque and outdated financial information.
Denis Marriner  - Dawson

The challenge

Denis Marriner joined Dawson Insurance Brokers in 2001 and took over the reins when the founder retired in 2016. Frank came on board for the due diligence process and was retained by Denis and his team to build on what they had uncovered.

Until that point, the business hadn’t had transparency or depth of knowledge around their financial performance. Financial reports did not provide much useful information, and this lack of insight meant Denis was, in his own words,

“stuck inside the business, not knowing how to take a step back and work on it.”

 

Dawson Insurance Brokers

Solution

Getting smarter about income recognition and driving compliance

Insurance can be challenging for some accountants because there are large amounts of other people’s money (GWP) washing in and out of the business.

Lack of clarity about what is actually income, and when it should be recognised, can lead to incorrect reporting of revenue. Additionally, GST is often incorrectly treated, leading to vulnerability with the IRD.

Frank helped Dawson set up a new accounting system with the appropriate coding and controls to minimise the risk of a nasty surprise at tax time.

 

Accurate monthly profit reports

Frank implemented a change to reporting on a monthly basis – moving beyond a cash position to an accrual accounting basis. This gives Dawson’s managers the ability to track business performance; so insidious trends could be spotted before they became expensive problems. Denis Marriner puts it this way:

“Accurate monthly financial information lets me know on any given day where the company is at with income and expenses compared to our targets and last year’s performance.”

 

Strategic planning to define the long-term direction

Shortly after engaging Frank, the Dawson executive team sat down for a one-day strategic workshop at Frank’s office. They thrashed out a set of objectives for the business, including some easy wins plus a few ‘big, hairy, audacious’ goals.’ This was followed up with an operational planning session to divide the year into quarters, allocate owners to key objectives, and agree on deliverables and timelines. Now everyone knows what really matters beyond the day-to-day, and there’s a plan to get there.

 

Quarterly reports to drive accountability

Frank provides quarterly reports to Dawson’s board, providing transparency to their internal and external shareholders. As with everything Frank, these reports are delivered in straightforward language that connects the latest numbers to the overall health and progress of the business.

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The results

Denis Marriner and his team now have access to the financial information they need to ensure the business is growing profitably and meeting the expectations laid out in its strategic plan. As Denis says,

“It lets me as the business owner do what I do best, and that is not accounting.”

Denis also appreciates Frank’s responsive service. He says,

“Having access to our Frank accountant has meant we get professional accountancy solutions immediately. They have set up things like tax pooling and been a tremendous help with budgets.”

The strategic planning workshop with Frank identified some ambitious five-year goals. Many of these will be hit within three years, which suggests the business is on track to meet both the short-term and long-term objectives of its owners.

 

In their own words:

“Our financial reporting is much more modern, and the combination of changing to Xero and the work we have done with Frank has given us a much closer handle on our results and performance. We can look every day and know our results. We now set and report against budgets, and the monthly reports give us a good snapshot of our results.”