Accounting Solutions for Early Stage Companies

Accounting Solutions for Early Stage Companies

The Struggle for Early Stage Companies

Early stage companies can often struggle to keep up with their day-to-day accounting requirements. This is especially true, as founders and management try to handle accounting in addition to all their other responsibilities. This challenge is compounded as business activity and business complexity increase. Accounting solutions for these types of companies vary of course depending on their industry; however, outsourcing accounting services can be beneficial in order to keep staff focused on core competencies and revenue-generating tasks.

Solution: Outsource

Nothing is more important or sensitive to your business than your financial position. That is why you should invest in both people with deep experience and an infrastructure with enterprise strength. Early stage companies can find solutions to their day-to-day accounting requirements by outsourcing the following services:

1. Transactional Requirements

This includes accounts payable, accounts receivable, bank reconciliations, payroll processing, asset tracking, etc.

2. Financial Control and Decision Making

This could be for a short term engagement to review processes, set up budgets or refine financial reports or on a continuing basis. Additionally, early stage companies can hire a consultant to act as the CFO/Controller that oversees daily activity, managing cash flow, communicating with tax advisers and presenting financial status at board meetings.

By leveraging resources and enterprise quality accounting applications, you will have the controls, confidence and focus to help drive operational improvements in your business. Companies in the early stages usually need to spend most of their attention on acquiring clients, developing business and performing their core competencies. The day-to-day accounting requirements can add to the stress of all the other challenges of being in the starting phase of growing your business. Deciding whether you should outsource or not depends, of course, on your situation and business; however, it undeniable that outsourcing services that are non-revenue generating can be extremely beneficial and valuable.

The right size company for AaaS?

What Size Company Benefits the Most from AaaS? Lavoie has had numerous conversations over the years with companies of all sizes regarding outsourcing or what we refer to as AaaS (Accounting as a Service).  AaaS is a form of outsourcing that combines people, process...
Read More

Technology Drives Accounting Efficiencies

Technology is Transforming Accounting & Finance The Association of Chartered Certified Accountants (ACCA) recently came out with a report last month showcasing technology's role in the future of finance. The report concludes that technology can revolutionize...
Read More

Technology Drives CFO Success

Effective Virtual or Fractional CFOs Rely on Technology Whether your CFO is full-time or fractional, CFOs are a pivotal part of your company leadership, helping you make crucial financial decisions and leading the execution of those decisions.   What makes an...
Read More

Accounting the Key Strategic Advantage?

Most companies that are thriving view accounting as a strategic function. Companies relying on bookkeeping have a hard time keeping up in today’s changing climate.   Bookkeeping by itself does not provide opportunities.  In a fiercely competitive work environment,...
Read More

10 Benefits of “Accounting as a Service”

Small and medium-sized businesses (SMBs) are often driven by a passion or cause – not spending hours on accounting and financial management. SMBs face many financial challenges that affect cash flow including hiring new employees, increasing profits, employee...
Read More

5 Myths around Outsourcing Finance Functions

Outsourced Accounting or Accounting as a Service (AaaS) provider can be the catalyst to take your organization to the next level.  For some SMBs, accounting is not looked at as a strategic function of the organization, but it should be.  It also shouldn’t take focus...
Read More

Our CPA Day of Service

For the last six years, the North Carolina Association of Certified Public Accountants (NCACPA) have challenged its members to give back to the community by participating in the CPA Day of Service. The idea came originally from one of NCACPA’s Board of Directors...
Read More

How to Improve Your FP&A Process Right Now

FP&A Teams Have the Wrong Focus According to a recent report by Adaptive Insights, CFOs want their employees to spend less time on collecting and preparing data and more time on forecasting and analysis. The survey revealed that financial planning and analysis...
Read More

8 Signs You Might Need the Cloud

If you haven't already, it is time to consider switching over to the cloud. Gartner recently released a report on cloud computing where they predicted that by 2020, a corporate "no-cloud" policy will be as rare as a "no-internet" policy is today. In order to stay...
Read More

Sage Announces Acquisition of Intacct for $850m

On Tuesday, Sage Group, a U.K. based technology company, announced that they are acquiring Intacct Corporation. It is the largest ever acquisition by Sage, who will be purchasing Intacct for $850 million. The transaction will close within the next few weeks. Going...
Read More
Engaging a Fractional CFO/Controller Service

Engaging a Fractional CFO/Controller Service

Rapid Growth Causes Increased Risk

Small to medium sized businesses that are in rapid growth also are experiencing increased financial risk as a result. Growth requires expansion of the company’s automated systems and access to additional financing to fuel the growth. Managing these financial risks may be foreign territory for the business owner and his team. The company needs a CFO to manage the bigger picture. The CFO will make sure that the systems, processes and people are in place to produce accurate financial information so that the owner of the company can make better decisions managing growth. However, many small and medium sized companies simply cannot afford to hire a full time CFO.

Fractional CFO and Controller Services are the Solutions

Fortunately, there are firms that provide fractional CFO and Controller services that are affordable. The best way for a company to identify a good service provider is to tap its network of trusted advisers, such as bankers, investors, attorneys or CPA firm. These advisers can direct their client toward a firm that provides the comprehensive accounting and financial reporting support, as well as strategic financial initiatives, that will help drive growth.

What Does the Role Entail?

Businesses who decide to engage a CFO are looking to acquire a person that can guide them with strategic initiatives, but what does that look like? In our experience, a fractional CFO can:

  • Assist companies who are preparing for an acquisition or sale and guide them through the examination phase and financial due diligence required to execute transactions
  • Provide guidance in reconciliation projects
  • Offer advice in software system reviews and recommendations
  • Review company processes and offer guidance on optimization
  • Enhance reporting setup and support

Ultimately, the role will depend on the needs of the company who is interested in engaging in controlling services. Are you interested in engaging a fractional CFO for your business, and if so, what would that role look like?

3 Ways to Drive Business Growth

3 Ways to Drive Business Growth

Being the CFO in a high growth company is challenging. Handling business responsibilities, strategies, managing people and responding to setbacks can really chew up your day. Here are 3 things I have learned from great leaders that drives business growth.

1. Empower Your Employees to Act Like Executives

By empowering employees to act as managers, you’ll free up your time to focus on your to-do list. This is a step beyond delegation. When you give trusted employees the power to make decisions, you lift the burden from your own shoulders. At the same time you fuel your staff members’ confidence in their own abilities to lead. This strategy is only successful if you let your employees what your expectations are and how they will be measured. If you have chosen the right employees, they will proudly embrace their new responsibilities and strive to exceed your expectations and drive growth.

2. Leverage Technologies That Pave The Way Toward Easy Management

Take advantage of technology solutions that integrate data and eliminate information silos that are difficult to breach. Decision making is much easier when you have a set of best-in-class applications that integrates and gives you 24/7 access to data in the office and remotely. You and your employees will spend less time struggling to generate useful data and more time analyzing your metrics. This will in turn allow you to make more informed and strategic decisions that will drive business growth.

3. Understand Your team, and Plan Around Its Strengths and Weaknesses

Every group of employees is different. Working with your employees, instead of imposing a workflow on them, will remove friction between leadership and your staff. Examine your employees and establish procedures and policies for work that allow each employee to have the opportunity to reach his or her full potential. As a result, your employees will be settled and comfortable with the company culture and the personalities on your team and can focus on strategies that drive growth.

 

Do you have any tips on how to drive business growth? Feel free to share in the comment section.

 

Why Use A Fractional CFO or Controller Services?

Why Use A Fractional CFO or Controller Services?

Identify Cost Savings and Increase Efficiency

In order to stay competitive, businesses are forced to examine all aspects of their operations to identify cost savings and drive efficiencies. The companies that do this successfully will be rewarded with increased market share and improved profitability.

The challenge for small business owners is how to effectively conduct this analysis without the knowledgeable resources to do it. Typically, small business owners will try to handle the company’s finances on their own, even though accounting is not their core strength. Consequently, owners can end up with poor financial reporting that impacts their understanding of their business operations.

Specific results of accounting and financial reporting shortcomings affecting small businesses include:
  • Inability to obtain bank financing or raise equity investments
  • The financial complexity of the business has outgrown the capability of existing staff
  • A lack of financial bandwidth on a specific project such as a M&A transaction
  • Inability to respond to growth opportunities due to misunderstanding the relevant financial implications
  • Misperceptions about the origin of profitability

Most Efficient Method for Small Business Owners

For many small businesses, hiring a full time CFO or Controller is not economically viable. However, utilizing a fractional CFO or Controller service to access the financial expertise they need is affordable. On average, most small businesses (subject to size) should only spend between $15,000 and $60,000 annually for fractional services, compared to $90,000 – $120,000 annually to hire a full time CFO or Controller. Clearly, utilizing fractional CFO/Controller services makes sense for small businesses who are looking to identify cost savings and drive efficiencies.

Making the Shift: Four Secrets Behind Great Budgeting and Planning

Download the eBook to learn how to challenge the Status Quo; set targets for continuous improvement, how CFOs can lead improvements & how to set rolling forecasts.

GET FREE REPORT
4 Steps for Driving Business Agility and Growth

4 Steps for Driving Business Agility and Growth

Software executives know they need to operate their businesses with more agility because of the pace and volume of change due to innovation and new competitive offerings. C-suite executives grappling with how to turn plans into action faster than ever before need to focus on four steps in order to achieve agility and growth.

1. Rapid Decision Making

Driving business agility requires that leaders have accurate information to make fast, informed decisions. In a recent Sand Hill Group study underwritten by Intacct, CEOs and CFOs ranked “delivering real-time relevant financial information and KPI performance to all stakeholders to drive the business” as most important to their organization. With real-time financial data and KPIs, senior management and board members are in an advantageous position for sound decision making.

Knowing what’s working in the business and what’s not allows leaders to take immediate action, rather than waiting weeks for any real business insight. Having real time KPIs allows an organization to make decisions at the point of need for improved results. The difference between a three-day financial close and a three-week financial close may be the speed advantage a company needs to capitalize on a new opportunity and beat the competition. CFOs and finance teams can make their company more agile by speeding up the delivery of accurate, insightful financial data to key stakeholders.

2. Forecasting and Investing

Another process that is nearly as important to software CEOs and CFOs is quick and accurate revenue and expense planning/forecasting. Accurate forecasts rely on a variety of data sources, and CFOs that can unite disparate financial, business and market data in a single ERP application, automatically and in real time, can rapidly deliver holistic forecasts that enable business leaders to stay agile and ahead of the competition.

Let’s say, for example, a CEO wants to forecast the revenue impact of potential product features in order to prioritize engineering and marketing resources. A modern cloud ERP system lets the CFO analyze, in one place:

  • The revenue impact of recent product releases by line of business, by customer, by channel and more, creating a solid foundation for building a forecast
  • The revenue and profitability of new customers by size and vertical to assess the effectiveness of marketing spend

With this depth of visibility into different aspects of the business in a single location, the CFO and CEO are able to make an informed decision on critical investment priorities.

3. Cloud ERP Systems

When it comes to adding and improving financial systems, software business leaders in the Sand Hill Group study indicated their most likely action in the next 12 months would be to implement business process changes, and their second most likely action would be to implement a business intelligence/data analysis solution. Both of these choices make sense for fast-growing companies.

Growth requires change, and business and finance systems that are inflexible or cannot scale at the same pace as the company will not do. By changing business processes, software companies attempt to add speed and reduce wasted efforts, particularly in the finance function, in order to be more agile and responsive.

Likewise, growing companies require business intelligence solutions because they struggle to find the information they need to make informed decisions in a timely manner.

However, there is a way to solve both challenges. Modern cloud ERP systems allow the finance team to efficiently complete the processes they have to do, yet move beyond those processes to the visibility-creating activities that finance teams need to do such as data analysis, forecasting, and operational reporting. This creates a better outcome for the finance team as well as the company than either process change or adding business intelligence alone.

There are real-world examples of finance teams that take advantage of a modern cloud ERP system to streamline processes and perform deeper financial and operational analysis for more accurate forecasting and greater visibility into the entire organization’s performance. A fast-growing U.S. software company implemented a cloud ERP system that delivers segmented reporting and profit and loss statements by multiple dimensions like department, item, customer, vendor, location, project and employee. The system enables the finance team to be more productive by automatically and proactively providing each department with standard reporting for revenue by customer, spending by vendor and costs at a project level.

This allows business leaders to increase agility and optimize their performance by managing against plan and refining the forecast in real time. As a result of this insight, departments can get instant answers without having to ask finance for key financial information, and executives benefit from deep, real-time insights into the sales pipeline and collections for better forecasts. The added efficiencies from a modern cloud ERP system help a company’s finance team spend less time on transactional bookkeeping and compliance tasks and more time empowering the entire company to focus on strategic, proactive planning, and enhanced execution.

4. Raising New Capital

Software businesses at one point or another need to raise new capital. Surveyed executives in the Sand Hill Group study reported their biggest challenge in this area is modeling future revenue and net income growth. As noted above, accurate forecasts rely on a variety of data sources, and CFOs that can unite disparate financial, business and market data in a single ERP application, automatically and in real time, can rapidly deliver holistic forecasts that demonstrate the full value and potential of the company.

In addition, the study participants rated establishing and enforcing financial processes and controls as their second top challenge in raising new capital. Establishing a robust set of internal controls is something a company has to do in order to demonstrate the effectiveness of the company’s accounting and reporting for a financial statement audit and to earn investor and lender trust.

Proper financial controls ensure no single individual has control over all parts of a financial transaction — and generate the audit trail to prove it. A modern cloud ERP system enables CFOs to deliver error-free financial statements and forecasts built on well-documented, carefully organized and approved transactions that support a realistic forecast and high valuation. Well-documented and enforced financial processes and controls make it easier for software companies to raise capital because of the accurate, trusted financial data provided to investors.

With these four enablers of agility and growth in place, C-suite executives and their boards and investors can be confident that the business will perform to expectations – or even outperform.

Four Crucial Enablers for Driving Business Agility and Growth was originally posted on Sandhill.com.

How Do CFOs Keep Up with Technology Changes?

How Do CFOs Keep Up with Technology Changes?

Changing Technology and Financial Pressure

Rapid change in technology has put a lot of pressure on finance and accounting teams. CFOs have increased responsibilities and their role is evolving. As a result, boardroom-level strategy is now as much of a focus as the balance sheet. Robert Half Management Resources recently released a survey with over 2,200 US companies of all sizes where they asked CFOs the following question:

“In general, what would you say is the single greatest pressure facing your accounting and finance function?”

Their responses were:

  • Keeping pace with changing technology
  • Meeting regulatory compliance mandates
  • Harnessing and managing big data
  • Finding and keeping skilled staff

Thus, based on the survey conducted by Robert Half, it seems that the greatest pressure CFOs are currently facing is changing technology. Leading financial managers should be able to look at a problem from many points of view and find a solution among disparate notions as a result. Therefore, gaining visibility into data and turning it into information is key. If data isn’t accurate, information and perceived solutions are flawed, or even worse, your solution only leads to further problems and you lose credibility.

7 Ways for CFOs To Keep Up with Technology

Paul McDonald (senior executive director for Robert Half), James C. Bourke (CPA/CITP/CFF, a partner in a large CPA firm) and Jeff Drew (Senior Editor at CGMA Magazine) have come up with seven tips that are especially relevant for CFOs to keep up with changes in technology.

  1. Hire financial staff with strong technology knowledge.
  2. Interact with in-house IT staff and outside consultants who are trusted technology experts.
  3. Attend conferences featuring sessions on current and emerging technologies.
  4. Set up RSS feeds with specific technologies as keywords.
  5. Join and become active in technology user groups.
  6. Collaborate with other CFOs at companies that use the same technologies.
  7. Meet with fellow CFOs to discuss technology issues.

How do you keep up with the pace of change in technology at your business? Do you employ any of the methods listed above?