How Laundryheap Cleaned Up their Intercompanies with Mayday

Laundryheap is a fast-growing international 7 entity group using Mayday to make managing intercompany transactions much smoother.

“It makes the month end close process a lot easier and a lot more accurate” – Jon Mahood, Finance Director at Laundryheap.

Introducing Laundryheap

Laundryheap, founded in 2014 in London, has grown to become the global leader in on-demand laundry and dry-cleaning services. They operate in 21 cities across 11 countries, providing high quality services delivered straight to your doorstep.

Expanding their corporate group, now with seven global entities, presented their financial team with a significant volume of manual intercompany transactions to deal with.

Jon Mahood has been Finance Director at Laundryheap since August 2022. He manages a team of three: a management accountant, an accountant and a data analyst.

Ironing out inefficiencies

When Laundryheap started expanding into new markets, all payments were still being made through their UK parent entity, as that’s where the funding and cash was sitting.

At the time, the team came up with a manual process to create an intercompany adjustment to make sure the cost was sitting in the right entity but this soon got out of control with the volume of transactions being made.

“Even a simple card payment for a taxi needs to be treated as intercompany.”

Jon told us: “When you're doing it manually you can't guarantee you’re going to get the exchange rates correct. You then come to a consolidation and you have these huge intercompany balances unexplainably not matching. Then even worse, is when you get to an audit process and you can't work out where to start in order to correct it.”

Cleaning up dirty data with Mayday

Jon has been constantly on the hunt for apps that could help his team improve efficiency and reduce manual errors. Luckily he came across Mayday and decided to give it a go.

“We were looking into a tool that would help us with the completely unrelated matter of customer invoice payment management, and stumbled across Mayday at a time when getting our head round our intercompany balances was also a headache, so we thought we’d explore further whether Mayday would help us tidy it up.”

With a 30 day free trial, the team had plenty of time to test Mayday’s three products, Balancer, Recharger and BRAG.

Through Mayday’s automation of intercompany transactions, the team is able to tackle consolidation with greater confidence.

“Mayday has definitely helped with reconciliation of intercompany transactions, with Balancer helping to ensure that we’ve got it right in terms of the exchange rates adjustment.
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It gives us a lot more comfort when we’re consolidating and looking at our numbers on a global level that our balance sheets are correct.
In terms of value for money, the package is very reasonable.
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Overall, it makes the month end close process a lot easier and a lot more accurate.”

Pressing ahead to the future

For a fast-growing company like Laundryheap, the benefits of using Mayday are not only for today, but in setting up operations for the future.

In the coming months and years, the team expects to need to be audited. In fact, their UAE company is already being audited, meaning that intercompany balances need to be squeaky clean.

“Mayday gives a greater confidence that when we do an audit, we will be well positioned. It also allows us to correctly and accurately allocate costs paid for by the UK across the other entities, with  an intercompany services agreement supporting it. This allows us to manage our individual P&Ls to maximise the tax benefits for us.”

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Jon’s advice: Give Mayday a spin

If you’re managing intercompany reconciliation and recharges manually at the moment, you’ll recognise Jon’s analogy that your finances can end up looking like a bunch of rubber bands, all tied together: a mess that needs untangling.

“I would suggest that Mayday would be great for a company who’s just about to expand into its first new market, or first secondary market. 
Because, all of a sudden, you’ll be paying things from the parent company into the secondary company and everything needs to be treated as intercompany. You’re going to get an unexpected surprise when you try to figure out how to manage that through Xero!
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It will be really useful to have that sorted before you make the move. If you start using Mayday from day one it will be a lot smoother and tidier - giving you a greater piece of mind regarding your finances.”

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Overall, Jon is happy that apps like Mayday are making his team as efficient as possible, so he can focus on what’s important.

“I can now be in a position where I’m comfortable with different processes and platforms, and with apps like Mayday in place, I can be confident the core finance team has everything under control.
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Now I can focus on what I need to: things like investor conversations, growing the business, business partnering and working with the CEO.”

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Want to clean up your intercompanies? Sign up now for your 30 day free trial.