When the COVID-19 pandemic hit the U.S. in March 2020, Sewing Incubator had just begun operations. Faced with product cancellations, Sewing Incubator quickly realized the need to diversify manufacturing and establish sound financial reporting systems in order to survive. The owners knew they had the ability to provide Personal Protective Equipment (PPE), particularly face masks, to essential workers but weren’t sure how to enter the market. They also realized they needed to find and implement a formal financial accounting system. Sewing Incubator needed a system with strong reporting capabilities to give them visibility into their profitability and to inform them of how they should price their products in this new market.
Sewing Incubator’s owners engaged CMTC in March 2020 to help them register with the System for Award Management (SAM), obtain a CAGE Code, and connect with government PPE purchasers. By being able to supply PPE to essential workers, they not only generated $750,000 in sales during the pandemic, but were able to play a significant role in protecting those on the front lines.
In June 2020, Sewing Incubator re-engaged CMTC to help them create a formal accounting system for the company and evaluate a comprehensive list of the company’s existing accounting practices to identify opportunities for process improvement. CMTC helped Sewing Incubator select and set up QuickBooks Online, create charts of accounts and a structure for the program, import existing accounting data into the program, train company leaders on the program’s use, and suggest an accounting routine for reporting. By implementing QuickBooks Online, Sewing Incubator was able to identify and execute operational upgrades based on improved cash flow as well as allocate funds to internal upgrades to increase return on investment. The accounting system implementation also saves labor time by automating previously manual processes, generating investment in new processes and offerings due to greater financial visibility and understanding, and helping avoid unnecessary investments by allowing more in-depth analysis of the investment’s impact on profitability and cash flow.
Sewing Incubator credits its survival through the pandemic to CMTC, and estimates $1,000,000 in sales revenue based on CMTC’s assistance. Sewing Incubator expects to save $50,000 in labor from the implementation of the new accounting system and related processes. In addition, they expect to invest $100,000 in new products – $85,000 in equipment, $5,000 in software, and $10,000 in other areas of its business. The increased visibility due to increased financial reporting is expected to lead to $50,000 in avoided investments.