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Larx leads successful turnaround for struggling distributor


A large and well-established electronic test and measurement equipment distributor adopted a new cloud-based accounting system without adequate planning, execution or training. The botched implementation resulted in significant problems across multiple business units and it created serious issues with the company’s more than 20,000 B2B customers and numerous partners.

The poor system implementation caused severe financial challenges ranging from incorrect billing and extreme past due accounts receivable to financial reporting problems. There was a breach of financial covenants with a lender that needed to be addressed. And operations were adversely affected by a lack of key business information, untimely and incorrect order fulfillment and inventory management issues.

In addition to bleeding money at an alarming rate, management was concerned as relationships with customers, partners, vendors and employees were quickly deteriorating.


The company needed outside help to adequately address the problem, so it engaged a team of Larx finance, operations and technology experts with extensive experience in turnarounds. The Larx team had to act fast and was able to tackle the most urgent problems right away.

To address the breach of contract, a forbearance agreement was negotiated to provide a runway for a turnaround. During this time the team conducted a thorough accounting review and restated eight months of financials. It helped create new accounting processes to ensure accurate invoicing and reporting, as well as to reconcile and collect past due receivables.

The Larx team also developed procedures to improve warehouse operations and order fulfillment and guided a staff reorganization. It created a flash report to give management insight into margins and profitability.


With help from Larx, the client was able to turn around its business by negotiating debt forbearance, accelerating collections, returning financial reporting to a timely and accurate cycle and increasing margins.

Specifically, Larx helped the business collect $6 million in past due accounts receivable in a six-week period and increase its margins by 300 basis points (BPS) in just three months. Larx also created a 13-week cash flow model to advise management on the cash required on a roll-forward basis. From an operational standpoint, Larx also helped the client achieve same-day order fulfillment.

Through close collaboration with the client and swift action, the Larx team was able to successfully get the business running smoothly and restore trust with internal and external stakeholders.


Poor implementation of a cloud-based accounting system threatens liquidity, lender relationship and operational performance.
  • Loan forbearance negotiated
  • Past due accounts receivable collected
  • New policies and procedures for accounting, warehouse and fulfillment
  • Staff reorganization
  • New reports/dashboards for management
  • Accurate invoicing and reporting restored
  • Warehouse operations and fulfillment significantly improved
  • Margins increased
  • Visibility of margins, profitability, required cash
  • Trust restored with customers, partners, vendors, staff
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