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Case Study
How G-Squared Partners Uncovered Millions in Overstated Income for a Growing Manufacturer
Overview
A privately held manufacturer in the Philadelphia area had a problem its CEO could feel but couldn’t pin down. When the company lost money, the losses were always bigger than he expected. When it turned a profit, the margins came in larger than he believed they should. He brought in G-Squared Partners to find out why, and the answer turned out to be worth more than $1 million.
The Challenge
Financial Statements Leadership Couldn’t Trust
The company had a small internal accounting team led by a controller, plus an outside firm that issued review reports on its financial statements and prepared its tax returns. On paper, that’s a reasonable setup. In practice, nobody was testing whether the numbers made sense.
The controller had inherited a set of accounting practices and continued them without question, and the outside firm had failed to catch the errors. Over several years, the company overstated its net income by several million dollars and paid taxes on profit it never earned. Leadership was making decisions about pricing, spending, and growth on numbers that didn’t reflect the business.
Our Approach
Diagnose, Correct, Rebuild
G-Squared Partners Founder and CEO Gene Godick and Managing Director Jim Granja went onsite, started with the financial statements, and pulled the underlying support behind them. The gaps surfaced quickly, and it quickly became clear everything had to be rebuilt from the ground up.
Over the following months, we:
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Restated Prior Years
Our team supervised the restatement of several years of financial statements.
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Reissued Outside Reports
The outside firm reissued its review reports based on the corrected financials.
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Amended Tax Returns
The restated returns produced a refund of more than $1 million from the IRS.
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Rebuilt Internal Processes
We put new processes in place for the accounting team and evaluated controller candidates with a search firm. None proved a stronger fit, so the company kept its team and moved it onto the new processes built and overseen by G-Squared Partners.
The Results
Accurate Numbers and a Seven-Figure Tax Refund
Correcting the financials led to a seven-figure tax refund, returning more than $1 million in taxes the company should never have paid. Just as important, leadership now has financial statements that reflect how the business actually performs, along with a corrected history to measure against.
Since the engagement, the company has grown significantly. All credit goes to the business itself for, but it’s undeniable that accurate numbers have given leadership a foundation for managing growth.
When your financial statements don’t line up with what you see in the business, G-Squared Partners can help you find out why. From diagnosing problems and correcting the record to building the processes that keep it right, our team gives companies numbers they can trust.