The right size company for AaaS?

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 and technology to help companies gain a strategic advantage.  Some companies think they are too big to outsource any function. Others think they aren’t big enough.  So, what is the right answer?  They are both wrong!

FAO (finance and accounting outsourcing) started nearly 20 years with BP outsourcing its accounting functions to Accenture.  FAO has traditionally been a horizontal offering with a value proposition driven by cost reduction and efficiency gains targeted at large organizations.  So clearly the argument of an organization being too big has its flaws.

Smaller companies have been outsourcing payroll for years so they are already participating in a form of FAO outsourcing.  The next concern we hear from clients is that they will outgrow services.  This is certainly a possibility if you select the wrong partner that does not have the technology or staff to grow with you.  For example, if a company is only providing bookkeeping services, it is certainly likely you would outgrow them.  However, if a strategic partner is selected they will be able to grow with you and help you scale faster.

Large organizations are most often driven to outsourcing for cost reduction. However, as market requirements intensify, FAO solutions are increasingly becoming more industry-specific to provide strategic advantages and not strictly cost reduction.  In smaller companies outsourcing can also reduce costs, but more importantly it enables them access to a full finance and accounting team that leverages economies of scale.   Most SMBs can’t afford to hire an entire F&A department.  So, what often happens is the company may only have a senior level person and they are stuck doing daily tactical activities or they may only have a junior level person and they are responsible for critical items such as cashflow analysis.  Both have obvious weaknesses that prevent a company from reaching its potential.

AaaS solves this dilemma for SMBs.  Companies don’t have to worry about daily tactical items that keep them from focusing on the company.  In addition, they are provided with senior level advisory.  To further maximize efficiencies, Lavoie services also include access to the leading cloud technologies.  By combines people, process and technology we know AaaS can benefit companies of all sizes. info@lavoiepllc.com

Accounting the Key Strategic Advantage?

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, companies that properly manage finance can grow and protect themselves from risk.

The opportunities are exciting for the future but it also comes with lots of challenges.  Too many companies are stuck looking into the past because of lack of expertise and or technology.  It is important to understand the past, but essential to have the knowledge and tools to be able to see in real-time and make educated predictions into the future.  As companies grow, hiring and retaining qualified employees can be a difficult task with lots of uncertainty.

A growing number are relying on Accounting as a Service (AaaS) to gain a competitive advantage. AaaS combines tactical and strategic accounting and includes leading software.

Top 3 benefits of Accounting as a Service:

  • Focus on Core
    • Concentrate on growing the business
    • Efficiency gains
    • Eliminate staff turnover complexities
    • Ability to scale as you grow
  • Professional Expertise
    • Qualified controlled/CFO leading accounting and finance department
    • Improve cash flow
    • Reduce financial risk
    • Audit ready at all times
  • Technology
    • Real-time visibility into your business performance
    • Increased security
    • Reduced IT headaches
    • Integration with other applications to eliminate information silos

Forward thinking companies put themselves a head of the curve.  Interested in learning more about Accounting as a Service?   Contact us.

10 Benefits of “Accounting as a Service”

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 healthcare, growing revenue and properly managing expenses.

Fortunately, technology has changed the game for SMBs. In the last decade, new technologies have enabled SMBs to compete with large enterprises.

Technology is only part of the equation.  Accounting as a Service (AaaS) is a hybrid solution that combines services with software; thus, the client can enjoy the benefits of professional expertise and leading cloud technology. This lays a great foundation, allowing companies to focus on revenue generating activities.  They are able to focus on future growth instead of being stuck analyzing the past.

10 Benefits of  Accounting as a Service

  1. Real-time visibility to your business performance via dashboards
  2. Reduce financial risk
  3. Increase productivity
  4. Be audit ready at all times
  5. Improved process flow and automation
  6. Eliminate staff turnover
  7. Cost savings
  8. Increased security
  9. Reduced IT headaches (upgrades and maintenance)
  10. Integration with your other applications to eliminate information silos

Interested in learning more?

5 Myths around Outsourcing Finance Functions

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 away from growing your core business.  Lots of SMBs don’t consider Outsourcing.  Here are 5 main reasons why.

1) They think it is too expensive

By using Accounting as a Service, you have access to shared service center.  Providers have put a lot of investment, thought, and execution into their model and have staffed accordingly.  With an AaaS provider you now have access to a full accounting department that often is less expensive than one full-time FTE.  This doesn’t even figure in technology costs that come with the service.

2) It is the same as bookkeeping services

Bookkeepers are responsible for recording daily financial transactions.  Controllers are responsible for financial reporting, internal audit and internal controls. CFO are responsible for financial planning, financial data analysis and strategic planning.  By relying only upon a bookkeeper you are stuck looking in the past and cannot see into the future to effectively make critical decisions for your business.  AaaS providers ensure daily transactions are done correctly but also greatly reduce risks and provide necessary forward-thinking strategy to help growth your business.

3) We can just do the same in-house

For most SMBs it is hard to justify the expense of having a bookkeeper, controller, VP of finance and CFO.  All positions have importance.  You don’t want to pay a senior level person to do daily transactions and you definitely don’t want to ask an entry level person to manage financial risks.

4) We cannot have any finance staff in-house

Often AaaS providers work with internal staff to fill voids.  Yes, providers can function as the entire finance department but often work with existing staff to help maximize their production.

5) We have more control and stability by utilizing in-house staff

Employees turnover and training are always on the minds of companies.  If you don’t have a defined professional develop plan for each employee, you are at risk of losing your top talent to other opportunities.  By using an AaaS provider you eliminate the risk of employee turnover.  You also will not miss a beat when people people are out sick, on vacation, or on leave.

What do I get with an AaaS?

  • Enterprise software platform (workflow, automation, dashboards etc)
  • Vendors paid on-time
  • Customers billed on-time and accurately
  • Employee expenses captured and reimbursed
  • Cash transactions reconciled
  • Timely payables collection
  • Accounts analyzed and reconciled on an ongoing basis
  • Financial and management reports delivered on-time and accurately
  • Scalability and rapid deployment, when needed
  • Regulatory compliance delivered
  • Audit ready
  • A finance and accounting function that is STRATEGIC
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.

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