The provision for credit losses (doubtful debts), which was around NIS 2 million at the end of 2023, jumped to an unprecedented NIS 18 million in less than two years.
For a company with annual revenue of around NIS 50-60 million in its Israel operations, this number raised significant questions about customer quality and/or revenue recognition policy.
We needed to understand whether this was a widespread credit failure or a deeper operational problem. Our thorough professional examination revealed the gap between the automated systems and the actual business reality in the field.
We worked closely with the company’s management to identify the complex issue and trace the structural and operational failures that caused these gaps. As part of our professional guidance, we helped the company prepare and present the corrected data, managed the required reporting processes with the authorities, and presented the examination findings and correction methods to the company’s audit committee.
Beyond the specific accounting correction, this process strengthened the company’s organizational systems. By implementing improved internal controls and better synchronization between operational systems and financial reporting, we ensured that the information presented to decision-makers and investors is not only accounting-accurate, but also accurately reflects the company’s business dynamics and economic potential going forward.
Links to articles:
https://www.globes.co.il/news/article.aspx?did=1001527246
https://www.calcalist.co.il/market/article/hyernlb1111l
