Category: Case studies

The Problem

An upstream Nigerian oil and gas company faced persistent financial leakages that significantly impacted its cash flow. Despite generating substantial revenue from crude oil exploration and production, the company struggled with high tax liabilities and inefficient tax processes, leaving little room for reinvestment in critical projects and operations.

The company’s challenges included unclaimed capital allowances, over-remittance of withholding taxes (WHT), underutilisation of available tax incentives, and poor tracking of recoverable Value Added Tax (VAT). Frequent tax audits revealed inconsistencies that led to substantial penalties and interest on overdue taxes. These inefficiencies created a liquidity crunch, necessitating a robust tax strategy to eliminate financial leakages and stabilise cash flow.

The Solution

Our tax experts conducted a comprehensive review of the company’s tax processes to identify inefficiencies and implement a strategic tax planning framework. We began with an in-depth analysis of the company’s tax compliance records over the past five years and assessed its effective tax rate. This included a detailed tax health check covering areas such as overpayment, unclaimed capital allowances, missed incentives, and audit triggers.

We recalibrated the compliance framework to ensure accurate reporting of deductible expenses, maximisation of capital allowances, and proper tracking of WHT credits. The fixed asset register was reviewed and restructured to align with the Nigerian Petroleum Profits Tax (PPT) Act and Petroleum Industry Act (PIA). This involved categorising assets appropriately and updating depreciation schedules for accurate tax computations.

To build the company’s internal capacity, we conducted regular training sessions for the finance team, equipping them with the knowledge and tools for proactive tax management.

The Result

Through these interventions, the company achieved substantial financial savings within the first fiscal year. Over $15 million in overpaid taxes was recovered from the Federal Inland Revenue Service (FIRS) and used to offset subsequent liabilities, significantly improving cash flow.

The utilisation of tax incentives and allowances reduced the company’s effective tax rate by 15%, freeing up additional resources for capital reinvestment. Outsourcing tax filing eliminated manual errors and reduced the average time spent on tax compliance by 40%, allowing the finance team to focus on strategic activities.

Our streamlined tax management framework ensured full compliance with regulatory requirements, minimising audit risks and penalties. This not only plugged financial leakages but also created a sustainable pathway for growth and resilience in a volatile industry.

 

The Problem

A prominent Nigerian multinational in the manufacturing sector, operating subsidiaries across the globe, faced significant challenges with its transfer pricing practices. As the group expanded its cross-border operations, tax authorities in Nigeria and other jurisdictions scrutinised its intercompany pricing for goods, services, and intellectual property transfers.

The client faced allegations of non-adherence to the arm’s length principle, a cornerstone of global transfer pricing regulations. These allegations led to disputes with the Federal Inland Revenue Service (FIRS), claims of profit shifting, underreporting of revenue, and potential tax evasion. This not only jeopardised the client’s compliance standing but also exposed it to substantial financial risks, including penalties, double taxation, and erosion of investor confidence.

Additionally, the client’s existing transfer pricing practices were misaligned with its broader financial strategy, hindering optimal profitability across subsidiaries. The lack of a consistent pricing framework also complicated financial reporting, audit compliance, and intercompany transaction monitoring.

The Solution

Our team of transfer pricing specialists developed a strategic approach to resolve the issues, ensuring full compliance with regulatory requirements while aligning transfer pricing practices with the client’s broader financial goals.

We conducted a detailed diagnostic, including a functional and risk analysis of intercompany transactions, to identify discrepancies between the client’s pricing structures and transfer pricing standards, such as the Nigerian Transfer Pricing Regulations (2018) and OECD guidelines. Using economic comparability analysis, we benchmarked transactions against industry standards to establish arm’s length pricing for goods, services, and royalties.

To address these issues, we developed a comprehensive transfer pricing policy tailored to the client’s unique operational and financial structure. This policy standardised pricing mechanisms across the group, ensuring consistency and transparency in intercompany dealings. Robust documentation, including local and master files, was prepared to capture the economic rationale behind each transaction, minimising the risk of future disputes.

Our team also facilitated negotiations with the FIRS to secure Advance Pricing Agreements (APAs), providing clarity and certainty over critical intercompany transactions and significantly reducing audit risks.

The Result

The implementation of the new transfer pricing policy and APAs resolved all ongoing disputes with tax authorities, enabling the client to achieve full compliance with local regulations. The streamlined policy aligned transfer pricing practices with the client’s financial strategy, optimising the allocation of profits among subsidiaries and improving group-level profitability.

The enhanced transparency fostered stronger relationships with regulators and boosted the client’s compliance reputation. The resolution of disputes and reduction in tax-related risks reassured stakeholders, significantly improving investor confidence.

By minimising tax risks and aligning transfer pricing practices with financial goals, the client achieved greater global competitiveness and positioned itself for long-term growth and sustainability.

 

The Problem

A medium-sized manufacturing company needed to transition from its outdated payroll software to the use of custom software for its payroll processing. The company had around 80 employees at the time of transition. As the business expanded, the HR team faced increasing challenges in processing payroll efficiently. With a combination of manual calculations and outdated payroll software, they struggled with frequent errors, delayed payroll cycles, and frustration from employees about payment discrepancies.

The Solution

The team commenced a review of the existing software of how payroll is operated and collection of required information needed for the update of the custom payroll software. The key features of the new system included:

• Smooth Transition: The transition and transfer of information from the manual calculations to the customized payroll system was seamless and easy.
• Automated Data Integration: The system integrated directly with the company’s time-tracking, ensuring that period worked, and other variables were correctly accounted for.
• Real-Time Tax Calculation: The custom payroll software was designed to update tax rates, benefits, and deductions based on the latest local, state, and federal regulations. This minimized the risk of compliance errors.
• Self-Service Portal: Employees were given access to a secure self-service portal where they could view their pay slips. This reduced the volume of HR inquiries regarding payroll.
• Customizable Reporting: The system allowed the HR team to generate customized payroll reports for auditing purposes, which saved time when preparing for year-end tasks.

 

The Result

After implementing the custom payroll system, the custom payroll software saw improvement across these key areas:

• Payroll errors dropped as a result of using the custom system.
• The time spent on processing payroll was reduced. What used to take several days now took only a few hours, allowing the HR team to focus on other strategic tasks.
• With automated tax calculations, deductions, and benefit updates, the HR team no longer had to manually check for errors, which also saved valuable time.
• Timely and accurate payments led to a noticeable increase in employee satisfaction, with fewer complaints about payroll issues.
• The payroll system’s automatic updates ensured that the client was always in compliance with the latest tax and labor laws, significantly reducing the risk of costly fines and penalties.
• As the company continued to grow, the custom payroll solution was easily scalable to handle additional employees without the need for major system changes. The software could accommodate different employee classifications, benefits structures, and multiple tax jurisdictions.

 

The Problem

Our client is a reputable and highly professional logistic, shipping, clearing and forwarding company that provides full logistic support for airfreight, seafreight, warehousing, storage and many more logistic services across the whole Niger Delta and all other states in Nigeria recently underwent a significant reorganization, reducing its workforce from 30 to 16 employees.

During this transition, the Chief Accountant abruptly left the organization, resulting in a lack of adequate financial oversight. Compounding these challenges were technical difficulties encountered during the migration of historical financial data into newly implemented SAGE One Accounting software. These issues have led to inefficiencies in financial record-keeping, accounts receivable management, and compliance with International Financial Reporting Standards (IFRS).

To address these challenges, the firm required a robust solution, including:

• Accurate migration of financial data to SAGE One Accounting.
• Implementation of internal control procedures for checks and balances.
• Review and enhancement of accounts receivable management processes
• Recruitment of a Chief Accountant to stabilize the finance team.

The firm turned to Stransact for a comprehensive business advisory and accounting solution.

The Solution: How We Helped

Stransact employed a systematic approach to address the firm’s needs, leveraging expertise in financial management, data migration, and internal controls.

1. Data Migration to SAGE One Accounting

We initiated the migration process by extracting historical data from the firm’s previous accounting system, Sage 50 (formerly Peachtree). This involved mapping entity accounts (e.g., banks, customers, vendors, and tax categories) and processing the source data for seamless integration into SAGE One Accounting. To ensure accuracy, we reviewed and reconciled imported data, such as trial balances, aged receivables, and payables.

Key steps included:

1. Updating the Chart of Accounts to align with IFRS.
2. Analyzing imported records for discrepancies.
3. Recommending adjustments and journals to maintain data integrity.

2. Maintenance of Current Accounting System

We reviewed the firm’s accounting policies to ensure consistent classification, measurement, and recognition of transactions. Post-migration, we validated financial reports, reconciled variances, and implemented necessary updates to the accounting framework.

3. Accounts Receivable Management

Stransact conducted a thorough review of the firm’s accounts receivable to identify factors contributing to low turnover and overdue invoices. Key actions included:

• Reviewing credit policies and evaluating customers’ creditworthiness.
• Circularizing customers to confirm balances.
• Recommending automated invoice reminders and proactive monitoring.

4. Provision of Loaned Staff

To address immediate staffing needs, Stransact provided a qualified loaned staff member to act as the interim Chief Financial Officer. This professional ensured continuity in financial operations while complying with the firm’s procedures and policies.

Key features of this arrangement included:

1. Supervised financial reporting and operational oversight.
2. Regular collaboration with the firm’s leadership to address gaps.
3. Prompt replacement of the loaned staff if performance expectations were not met.

5. Business Processes and Internal Control Check

We assessed the firm’s existing operational processes, identified areas of non-compliance, and proposed improvements. Our team developed an updated procedural manual and trained the firm staff on implementing enhanced processes, including:

1. Delegated Levels of Authority (DLA).
2. Payment authorization and vouching.

6. Recruitment of a Chief Accountant

Stransact facilitated the recruitment process to secure a permanent Chief Accountant. Our services covered:

1. Sourcing and screening candidates.
2. Conducting reference checks and interviews.
3. Managing onboarding to ensure a smooth transition.

The Result

Through a collaborative approach, Stransact delivered a comprehensive solution, achieving measurable improvements:

1. Enhanced Financial Accuracy: Successful migration of historical data and implementation of IFRS-compliant processes improved financial reporting accuracy.
2. Streamlined Processes: Updated internal controls and automated reminders reduced accounts receivable aging and improved operational efficiency.
3. Staff Stability: The provision of a loaned CFO and the recruitment of a Chief Accountant stabilized the firm’s finance team.
4. Cost Savings: By identifying inefficiencies and optimizing processes, achieved significant cost savings.

This holistic approach to strengthening compliance and financial accuracy positioned the firm for sustainable growth and operational excellence.