Monarch Medical operates in a highly regulated and competitive industry, where the quality of products and services directly impact patient care. At the outset of the engagement with Lavoie, Monarch (which was purchased by Eigen Capital in 2012) had minimal processes especially in terms of accounting systems. Lavoie took responsibility for the entire back office support function of the company, with Eigen Capital’s leadership noting of Sharai Lavoie “she just knew what to do.” Monarch doubled its revenues, increased its workforce and improved its systems relative to invoicing, purchase orders and preparing financial statements. This resulted in many positive outcomes, with Monarch’s senior leaders noting, “The business is running like a well-oiled machine.”
Outcomes
Annual revenue doubled
Headcount increased from 12 to 35 employees
“[Sharai] takes pride in what she does. [Lavoie] is not a giant firm where there’s no sense of ownership or sense of pride. For us, that was extremely important.”
Solutions
Implemented cloud-based ERP solutions
Set up software to track commissions
Built a system of internal controls
Created a new purchase order process
Supported payroll and HR functions
The Client: Monarch Medical
As a medical software company, Monarch Medical creates algorithmic dosing products associated with insulin for hospitals and other healthcare clients. These products help save lives and improve patient care while giving healthcare providers the tools to treat patients more efficiently.
In 2012, Eigen Capital purchased Monarch’s IP product and services while integrating the existing workforce into its operations. The existing business consisted of 12 employees and minimal accounting and business infrastructure. Also, Monarch’s products exist in an FDA-regulated industry and must meet rigorous standards of quality and reliability.
The Problem: A Lack in Structure
Monarch Medical’s baseline accounting processes lacked structure. Leaders of Eigen Capital noted, “All of the mechanics of administering the company, from an structural standpoint, didn’t exist.”
As a result, accounts payable and document retention policies were not well-defined. Also, purchase orders and purchasing processes were not in line with industry best practices.
Monarch did not have an accountant or financial professional on staff to help improve operations. For Monarch to provide better service to internal and external customers, while maximizing shareholder value, it was necessary to create policies, processes, and procedures to run the business.
The Need: An Experienced Outsourced Accounting Firm
Monarch needed an outsourced accounting service provider to set up the entire back office function of its business. This service provider needed to be self-sufficient and low maintenance while having the tools and expertise to revamp current operations and support future growth.
Also, Monarch and Eigen Capital were looking for a service provider experienced with private equity clients. Lavoie’s holistic approach, software applications and experienced personnel were an ideal fit to establish, improve and expand Monarch’s processes. Given the entrepreneurial mindset of Lavoie’s founder, Sharai Lavoie, and Monarch’s leadership team, there was a commonality of mindsets.
Sharai Lavoie also has a background in the healthcare industry. This proved critical for understanding the dynamics of Monarch’s operating environment. There is a wide spectrum of accounting applications, cloud-based technology solutions and add-on modules to standard accounting systems. Knowing how to parse through this array of systems to find the optimal solutions, based on the industry, size and nature of a company’s operations, is no simple task. Lavoie had the flexibility and knowledge base to do this effectively while having the acumen to communicate with private equity professionals on complex matters. Eigen Capital’s leaders appreciated Sharai Lavoie’s work ethic noting, “She takes pride in what she does.”
The Solutions
System Optimization and Process Improvement
To meet the objectives of the engagement, Lavoie implemented tools to make the company’s accounting systems more robust. These included cloud-based applications to streamline accounting and payroll tasks. Processes were standardized, measured and tracked to improve performance. For example, customer contracts were standardized. This led to the better management, evaluation and recording of important transactions that directly impacted the revenue cycle and cash management.
Internal Controls
A system of internal controls was implemented to meet the regulatory demands in this industry. Whether it was document retention policies, a series of account reconciliations to verify the accuracy of balance sheet accounts, or protecting confidential information, this system of controls was coordinated with all company personnel for maximum effectiveness. Lavoie participated in HIPPA training and integrated those guidelines relative to the tasks and accounting procedures they completed. Without an effective system of internal controls, a myriad of risks can impact the continued viability of Monarch Medical, which is why Lavoie placed emphasis on the integrity of the solutions implemented.
Commission Tracking
Recommending and establishing the use of software to track commission, resulting in more clarity and accountability for the sales team to see commissions building up in real-time, was a beneficial best practice. It brought alignment and transparency for all stakeholders in the organization, improving morale, sales, accounting and other processes. Aligning business units is critical for efficiency and the continued growth of an organization, as well as for maintaining a competitive advantage in the global economy.
Attaining Purchase Order in Advance
Another significant achievement was a new process to coordinate with hospitals to attain purchase orders in advance. Proof of purchase orders allows for bank funding alleviating funding concerns or restrictions. This process was integral for growing the business and was facilitated by Lavoie’s staff members. Fine-tuned processes are critical for enhancing the speed and capabilities of operations, as accounting supports management decision-making and helps attain the resources necessary to achieve organizational objectives.
The Result: Doubled Revenue
Over the course of the engagement with Lavoie, Monarch doubled its revenues, increased its headcount from 12 to 35 employees and improved cash flow through effective accounting and treasury procedures.
While some hospitals tend to be slow payers, Lavoie’s team worked with these customers to speed up payment and make more cash available for Monarch’s ongoing operations. Lavoie’s team undertook the many labor-intensive tasks required to streamline operations and establish a month-end-close for financial statement preparation.
Lavoie has proved to be a trusted advisor and strategic partner in the running of day-to-day operations of the business while building the infrastructure for future growth. Lavoie also participated in the interview of the CEO for Monarch Medical with Eigen Capital. This type of insight, combined with a clear illustration of company performance and the management of operational tasks, is where Lavoie’s added value really shows. Having a trusted partner to look to for advice and practical experience can yield a significant return on investment.
In Summary
Monarch Medical engaged Lavoie to perform outsourced accounting services, and help support the growth of their business while improving the efficiency, effectiveness and accuracy of Monarch’s financial reporting processes. The engagement was a success, with Monarch Medical doubling its revenues.
If you’d like to explore how Lavoie can help your business, set up a consultation today.
The accounting industry continues to quietly undergo a transformation that will be revolutionary once the history books are written. This transformation is mainly the fruit of rapid developments in the technological infrastructure that powers the day-to-day functions of accounting practice.
Those organizations who are adaptable and among the early adopters of these emerging accounting trends stand to capitalize significantly over their competition. On the other hand, organizations that are resistant to change will fall farther behind and may even become obsolete.
In this article, we take a closer look at three emerging trends in accounting practice for 2022 and how they can help your business.
1. Accounting Automation
Accounting automation is enabled by cutting-edge software programs that allow daily accounting functions to be completed with minimal human involvement. Any routine accounting function that has a clear set of rules can now be designed by software and executed by these programs automatically without human intervention.
The automation of accounting functions will be a rapidly growing trend in 2022. There are tremendous benefits for organizations who adopt automation technologies in their accounting practices. The two most significant benefits are increased efficiency and reduction of errors.
Increased Efficiency
Prior to automation, many daily accounting tasks were done manually. These manual tasks were time-consuming and required substantial amounts of human resources. With accounting automation, these tasks that were once done manually are now done automatically by software programs. The result is that those tasks are completed much faster and with much fewer human resources.
This increased process efficiency enabled by automation allows the members of your team to focus on activities that are more valuable to your organization. These high-value activities include delivering better customer service and spending time on strategy and planning. Since the manual tasks are now automated, your accounting team is freed up to delight your customers more as well as spend time and energy planning how to make your business even better for the future.
Reduction of Errors
If your accounting team is overwhelmed by a mountain of daily tasks that they have to do manually, they will have to work faster to try to get everything finished on time. This rushed process will inevitably result in more errors in their work. Accounting errors are not only a source of liability for your company, they also take up a considerable amount of extra time by having to diagnose, correct, and readjust downstream books and records that were impacted.
By implementing automated accounting technologies in 2022 your organization will experience tremendous benefits because the automated programs will be able to detect and even prevent accounting errors from occurring. Furthermore, if an error is detected by the automated accounting program, it will be much easier and less time consuming to fix because once the error is corrected, the software will take care of adjusting all downstream books and records that were affected by the error.
2. Agile Accounting
A recent survey found that 54% of CFOs plan to make remote work permanent for their accounting teams even after the coronavirus pandemic is over. This phenomenon represents a major shift in thinking about traditional processes within accounting departments.
One of the most significant consequences of this shift is that accounting teams will need to be more agile in 2022 than ever before. In short, an agile accounting team is one that can have its members working in different locations at different times, but still meeting the goals of the accounting practice.
One of the keys that is going to enable agile accounting is cloud storage technology. Prior to the dawn of agile accounting in the industry, firms stored their accounting data on local servers within their organizations. As a result of this local storage, team members generally needed to be onsite to access the accounting data. With cloud services, an organization’s accounting data can now be securely stored within the cloud and accessed from anywhere in the world. In this way, cloud storage is a game-changer and has revolutionized the approaches businesses are now taking towards implementing more lean and agile accounting processes in their organizations.
In addition to bringing increased agility to accounting teams themselves, agile accounting is also going to have an impact on hiring and retaining top accounting talent in 2022. Agile accounting methods have obvious attractions for potential new team members. With an agile model, job candidates are attracted by the ability to work from their current cities and not have to move to a new location. They are also enticed by being able to work at different times during the day or night depending on what best suits their lifestyle.
In short, agile accounting methodologies—enabled by cloud storage technology—will be a major disruptor in 2022. Accounting teams will become more agile and leaner than ever before. Organizations who don’t adopt agile methods may encounter problems hiring and retaining top accounting talent in 2022.
3. Outsourced Accounting
The year 2022 will also see a continued increase in outsourced accounting. Outsourced accounting encompasses many accounting functions including:
Accounts payable
Account receivable
General ledger accounting
Budget projections
Payroll
Time and expense reporting
With outsourced accounting, these standard accounting functions—as well as many others—are outsourced by businesses to specialist accounting firms.
Many organizations will continue to realize in 2022 that outsourced accounting firms bring a wealth of experience to their business. Additionally, by entrusting their standard accounting functions to qualified experts, businesses are freed up to focus on high-value activities such as revenue generation via more sales and better customer service.
Two additional benefits that businesses will realize from outsourced accounting services are the application of advanced technologies to their accounting processes and consultative financial expertise. Third-party outsourced accounting firms are experts in the latest accounting software programs. These outsourced partners can help businesses build valuable accounting software ecosystems that will automate many of their accounting functions.
Outsourced accounting partners also bring tremendous value to their clients in the form of consultative financial guidance to help their business planning and strategy. With outsourced accounting, you get access to a highly-experienced controller or CFO who can leverage their decades of experience to help you optimize the accounting and financial aspects of your business even further.
Staying Ahead of the Accounting Curve in 2022
As you can see, 2022 is going to be a year of rapid progress for the accounting industry. Accounting teams who are quick to adopt automated accounting technologies will make leaps over their competition in terms of vastly increased efficiencies.
Additionally, companies who become leaner and more agile will enjoy higher employee satisfaction and be able to attract top accounting talent. For organizations who are feeling overwhelmed by the demands of running a top-notch accounting practice, outsourced accounting services will be more necessary than ever in 2022.
For more information on how Lavoie can help Charlotte businesses stay ahead of the accounting curve in 2022, reach out to us today by calling 704-481-6699.
Lavoie CPA has added Jirav, an all-in-one business planning software for small and medium companies, to its lineup of preferred cloud solutions for the accounting profession.
At Lavoie CPA, we leverage accounting as a service and cloud-based technology to streamline clients’ accounting, payroll, and analytical processes. Implementing software solutions is critical for improving financial reporting and making businesses scalable over the long term. We work closely with clients to identify the right software solution that supports strategic objectives while making operations more efficient and effective.
Through this partnership, Lavoie CPA and Jirav aim to give clients a competitive edge in their accounting and administrative processes.
Jirav is an all-in-one financial planning and analysis solution that maximizes the collaborative value of forecasting, budgeting, reporting, and analytics so leaders can drive their businesses forward with confidence and speed.
Jirav integrates natively with leading accounting or ERP platforms such as Xero, Quickbooks, NetSuite, and Sage Intacct. With Jirav, you are up and running your forecasts using templates in minutes.
This powerful business planning software helps companies:
Maximize Growth: Model the outcomes of investing in sales, marketing, or other areas. Scenario test to optimize your growth strategy and track results to plan.
Operate With Financial Excellence: A key to growth is having a plan and measuring against it. Manage detailed KPIs and collaborate with owners to keep the business on track.
Focus on Strategy: Finance teams at growth companies lose too much time to spreadsheets and generating reports. Automate the tasks and focus on being strategic.
Founded in 2009, Lavoie has served as a reliable Charlotte CPA firm that specializes in strategic financial and operational planning for businesses of all sizes. By delivering state-of-the-art strategic support, Lavoie’s clients can focus on growing their business and soar to the next level of greatness. In addition to providing customized solutions for clients, Lavoie prioritizes social justice issues and is extremely involved in the local Charlotte community.
About Jirav
Jirav is a comprehensive business planning solution for small and medium companies that maximizes the collaborative value of forecasting, budgeting, reporting, and analytics so leaders can drive their businesses forward with confidence and speed. The all-in-one financial planning and analysis software offers faster implementation and a more intuitive interface, allowing finance leaders to build financial models in hours (not days) and generate financial reports in minutes (not hours). Jirav is headquartered in San Francisco with offices and teams across the world including Seattle, Austin, and Poland. Learn more at www.jirav.com.
The accounting industry continues to quietly undergo a transformation that will be revolutionary once the history books are written. This transformation is mainly the fruit of rapid developments in the technological infrastructure that powers the day-to-day functions of accounting practice.
Those organizations who are adaptable and among the early adopters of these emerging accounting trends stand to capitalize significantly over their competition. On the other hand, organizations that are resistant to change will fall farther behind and may even become obsolete.
In this article, we take a closer look at three emerging trends in accounting practice for 2022 and how they can help your business.
1. Accounting Automation
Accounting automation is enabled by cutting-edge software programs that allow daily accounting functions to be completed with minimal human involvement. Any routine accounting function that has a clear set of rules can now be designed by software and executed by these programs automatically without human intervention.
The automation of accounting functions will be a rapidly growing trend in 2022. There are tremendous benefits for organizations that adopt automation technologies in their accounting practices. The two most significant benefits are increased efficiency and reduction of errors.
Increased Efficiency
Prior to automation, many daily accounting tasks were done manually. These manual tasks were time-consuming and required substantial amounts of human resources. With accounting automation, these tasks that were once done manually are now done automatically by software programs. The result is that those tasks are completed much faster and with much fewer human resources.
This increased process efficiency enabled by automation allows the members of your team to focus on activities that are more valuable to your organization. These high-value activities include delivering better customer service and spending time on strategy and planning. Since the manual tasks are now automated, your accounting team is freed up to delight your customers more as well as spend time and energy planning how to make your business even better for the future.
Reduction of Errors
If your accounting team is overwhelmed by a mountain of daily tasks that they have to do manually, they will have to work faster to try to get everything finished on time. This rushed process will inevitably result in more errors in their work. Accounting errors are not only a source of liability for your company, they also take up a considerable amount of extra time by having to diagnose, correct, and readjust downstream books and records that were impacted.
By implementing automated accounting technologies in 2022 your organization will experience tremendous benefits because the automated programs will be able to detect and even prevent accounting errors from occurring. Furthermore, if an error is detected by the automated accounting program, it will be much easier and less time-consuming to fix because once the error is corrected, the software will take care of adjusting all downstream books and records that were affected by the error.
2. Agile Accounting
A recent survey found that 54% of CFOs plan to make remote work permanent for their accounting teams even after the coronavirus pandemic is over. This phenomenon represents a major shift in thinking about traditional processes within accounting departments.
One of the most significant consequences of this shift is that accounting teams will need to be more agile in 2022 than ever before. In short, an agile accounting team is one that can have its members working in different locations at different times, but still meeting the goals of the accounting practice.
One of the keys that is going to enable agile accounting is cloud storage technology. Prior to the dawn of agile accounting in the industry, firms stored their accounting data on local servers within their organizations. As a result of this local storage, team members generally needed to be onsite to access the accounting data. With cloud services, an organization’s accounting data can now be securely stored within the cloud and accessed from anywhere in the world. In this way, cloud storage is a game-changer and has revolutionized the approaches businesses are now taking towards implementing more lean and agile accounting processes in their organizations.
In addition to bringing increased agility to accounting teams themselves, agile accounting is also going to have an impact on hiring and retaining top accounting talent in 2022. Agile accounting methods have obvious attractions for potential new team members. With an agile model, job candidates are attracted by the ability to work from their current cities and not have to move to a new location. They are also enticed by being able to work at different times during the day or night depending on what best suits their lifestyle.
In short, agile accounting methodologies—enabled by cloud storage technology—will be a major disruptor in 2022. Accounting teams will become more agile and leaner than ever before. Organizations that don’t adopt agile methods may encounter problems hiring and retaining top accounting talent in 2022.
3. Outsourced Accounting
The year 2022 will also see a continued increase in outsourced accounting. Outsourced accounting encompasses many accounting functions including:
Accounts payable
Account receivable
General ledger accounting
Budget projections
Payroll
Time and expense reporting
With outsourced accounting, these standard accounting functions—as well as many others—are outsourced by businesses to specialist accounting firms.
Many organizations will continue to realize in 2022 that outsourced accounting firms bring a wealth of experience to their business. Additionally, by entrusting their standard accounting functions to qualified experts, businesses are freed up to focus on high-value activities such as revenue generation via more sales and better customer service.
Two additional benefits that businesses will realize from outsourced accounting services are the application of advanced technologies to their accounting processes and consultative financial expertise. Third-party outsourced accounting firms are experts in the latest accounting software programs. These outsourced partners can help businesses build valuable accounting software ecosystems that will automate many of their accounting functions.
Outsourced accounting partners also bring tremendous value to their clients in the form of consultative financial guidance to help their business planning and strategy. With outsourced accounting, you get access to a highly-experienced controller or CFO who can leverage their decades of experience to help you optimize the accounting and financial aspects of your business even further.
Staying Ahead of the Accounting Curve in 2022
As you can see, 2022 is going to be a year of rapid progress for the accounting industry. Accounting teams who are quick to adopt automated accounting technologies will make leaps over their competition in terms of vastly increased efficiencies.
Additionally, companies who become leaner and more agile will enjoy higher employee satisfaction and be able to attract top accounting talent. For organizations who are feeling overwhelmed by the demands of running a top-notch accounting practice, outsourced accounting services will be more necessary than ever in 2022. For more information on how Lavoie can help Charlotte businesses stay ahead of the accounting curve in 2022, reach out to us today by calling 704-481-6699.
Accounting is one of the most important ingredients of success for private equity firms large and small.
When accounting is optimized for the best practices of private equity, it becomes an additional catalyst for success. On the other hand, if accounting is not done properly based on the unique aspects of a private equity firm, the results can seriously hinder performance.
In order for private equity accounting to be a catalyst for success, it needs to be competent and actually bring value in several key areas including:
Leveraging next-generation automated accounting technologies to enable scale
Seizing any and all opportunities to put in place real-time accounting reporting
Extracting value from accounting practices to support strategic growth
While the goals for private equity accounting teams are clear, reaching them can prove challenging. In this article, we want to take a closer look at a few of the most common accounting mistakes made by private equity firms and how those mistakes can be prevented.
3 Private Equity Accounting Mistakes & How To Avoid Them
1. Failure To Scale Accounting Systems
One of the primary accounting mistakes made by private equity firms is the continued use of manual accounting processes while trying to scale growth. If your accounting team is spending most of their time manually performing tasks, the growth of your portfolio companies will be hindered.
The key to avoiding the failure to scale accounting systems is by implementing clearly defined workflows across intradepartmental teams, which are backed by automated accounting technologies.
There is an increasing number of accounting software-as-a-service (SaaS) platforms covering a wide range of accounting functions. It can be helpful for private equity firms to consult with qualified accounting SaaS experts to help build an ecosystem of these platforms for your firm.
This accounting SaaS ecosystem will bring automation and scale to the accounting operations across your portfolio. Instead of hindering growth, this automation will help scale and empower your firm’s growth.
2. Making Key Decisions Based on a Lack of Real-Time Information
Private equity firm principals and partners need to have the most up-to-date accounting data as possible.
Prior to the entrance of SaaS accounting platforms, private equity leaders had to rely heavily on the CFO for the pulse on the accounting state of affairs. And often, the CFO themselves did not have the most up-to-date accounting reports. With the introduction of an automated accounting software ecosystem we previously discussed, it is now possible for all leaders of the firm to have access to real-time accounting data.
This real-time view of accounting reporting and performance is a game-changer for the private equity industry. Leaders of private equity firms can now make the most informed decisions possible about their portfolio companies.
Often events can unfold rapidly in the mergers and acquisitions world, and vital decisions about the future of a given portfolio company need to be made quickly. In these situations, the old method of having to wait weeks for accounting data to be compiled is a thing of the past. With the current software ecosystems properly implemented, private equity leaders have the key information they need in real-time to make important decisions.
It is imperative that CFOs and accounting leaders avoid the mistake of allowing delays in their accounting reporting systems due to outdated technologies and processes. If these delays aren’t remedied, the leaders of these firms could end up making poor strategic decisions about their portfolio companies and that could prove very costly.
In order to ensure you are taking advantage of all the opportunities to put in place real-time accounting reporting systems, it is helpful to partner with a consultant that has the ability to understand your unique portfolio and where those opportunities exist. Doing so will result in tremendous benefits for the leaders of your firm when it comes time to make big decisions about the future.
3. Mismatched CFOs
Selecting a CFO for your private equity firm is one of the most important decisions you will make. One of the key roles your CFO should play is in knowing how to use accounting practices to aid rapid growth.
As we discussed earlier, many private equity firms have a growth focus. The mistake that is commonly made is when a private equity firm hires a CFO who does not have robust experience in running the accounting practice to maximize the growth of the organization.
The reality is many CFOs come from backgrounds that are focused more on accounting for mature companies. In these contexts, the CFOs have not spent enough time in a high-growth environment. They may be very capable CFOs—even coming from very large enterprises. However, if they have not had experience in running a successful accounting operation towards growth, they will likely be unqualified as the CFO of a private equity firm.
In order to avoid these mistakes, private equity firm leaders should search for CFOs with demonstrated experience in creating and running accounting systems for high-growth companies.
For CFOs to be successful with accounting practices in a growth environment, they need to have the ability to bring meaningful strategic guidance to the leaders of the firm. This ability to bring guidance can only come from significant past experiences in running the accounting operations in sometimes volatile and chaotic growth environments.
These CFOs are not expecting to show up on day one and have tightly organized systems in place. On the contrary, they have had past experiences taking a somewhat disorganized, rapid growth situation and cleaning up the accounting operations—streamlining and scaling them in order to foster further growth.
The best way to find a CFO who could be a potential fit for your private equity firm is to ask them during the interview process what strategic growth-related guidance they have given from an accounting perspective in the past at their previous organizations.
Let Accounting Help Grow Your Private Equity Firm
At a big-picture level, the accounting practice for your private equity firm needs to be just as growth-focused as the rest of the firm. CFOs with a maintenance-only mindset who lack the ability to bring strategic accounting guidance to the table when it comes to growth, will not let your firm realize its full potential.
Similarly, sticking with outdated accounting technologies and processes will hinder the growth of your firm as you try to scale your portfolio. Not only should you seek the assistance of a qualified consultant to help you select and implement an accounting SaaS ecosystem, you should also have this advisor help you bring real-time accounting reporting to all the leaders of your firm.
In the midst of rapid growth, it can be difficult to find the time and resources to take the appropriate steps you need to take to ensure the success of your accounting operation. That is why it can be helpful to find a consultant you can trust to aid you in these important initiatives for the future success of your firm.
To learn more about how Lavoie can help your private equity firm avoid making the mistakes in this article, contact us online or give us a call at 704-481-6699 today.
Every business needs reliable financial reporting and management in order to make sound company decisions. That means every company needs an accounting team that’s skilled in financial processes, reporting, and compliance. For the highest quality accounting, many businesses, including those with in-house accounting departments, turn to outsourced accounting firms. These firms are a tremendous resource for companies, helping them overcome some of the biggest accounting challenges.
So what are some of the accounting challenges that outsourced accounting firms can help solve?
IT literacy is no longer a nice-to-have competency. Accountants and their firms can no longer provide client write ups as their sole activity. They need to embrace a host of new technologies brought on by the digital transformation that has changed the way companies conduct business and how consumers interact with them for at least the past decade.
An outsourced accounting firm, like Lavoie, can ensure that your company is using the most up-to-date CPA software and that you’re maximizing the tools and efficiencies within that software.
CPA software automatically categorizes incoming data and uses that data to create a personalized and automated experience. This streamlining of information allows accountants to spend less time on manual data crunching and more time on interpreting the data to make savvy business recommendations to clients.
Cash Flow Management
Accounting clients expect their accountants to advise them on many issues, and one of the most important is successfully managing cash flow. Freeing up cash flow is particularly important during times of economic uncertainty or hardship. Small business owners realize cash management is crucial, but many don’t know how to accurately estimate future levels of cash on hand.
An outsourced accounting team can focus on improving cash flow, identifying cost-cutting measures, and creating processes to streamline accounts receivable and accounts payable, all while keeping a close eye on expenses, overdue invoices, and other cash flow metrics.
Furthermore, because outsourced accounting utilizes cloud-based software, critical cash flow data can be accessed from anywhere at any time. Further, because the client’s data is hosted in the cloud, people don’t have to pass it around via emailed spreadsheets. Security is enhanced.
Recruiting and Hiring Talent
One of the biggest burdens of managing accounting in-house is that when employees leave the company, they often take their knowledge of the company’s accounting practices with them. That leaves the company with the task of finding a replacement. Plus, the company has to patiently wait as new hires learn the ropes before becoming proficient in their role.
The benefit of an outsourced accounting firm is that you can skip the hassle of finding and retaining talent. And you don’t have to endure periods of onboarding new employees when new hires are prone to making mistakes. With an outsourced accounting firm, there are no disruptions to your financial capabilities due to employee turnover.
Diversifying Accounting Skills
An accounting team is only as good as its employees. Meaning, if a company is confined to a small accounting team, they can only benefit from the skills of a handful of employees. That can make it difficult to adopt emerging trends, software, and efficiencies.
If your in-house accounting team is struggling to stay ahead of your clients, offering services reactively upon client request versus proactively, an outsourced accounting firm can help. Outsourced accounting firms are solely dedicated to one thing: accounting. These firms are made up of leading experts that bring a broad range of skills to the table. They possess the technical and accounting knowledge to create better forecasting and analytics, as well as the insight to interpret the data accurately.
Managing Compliance and Regulations
Changing accounting standards have long been a challenge for in-house teams. Many in-house accounting teams have experienced the ever-changing rules, and penalties, within the accounting industry.
The benefit of an outsourced accounting firm is that they are at the forefront of accounting changes. It’s their job to be in the know. An outsourced accounting partner can therefore help your company stay ahead of changing regulations, avoiding costly fines and time delays.
Managing the Customer Experience
Virtually every company has rethought and adjusted its focus toward customers over the last decade. While companies used to sell products and services based upon price, features, value, and other factors, companies today focus on customer satisfaction and the customer experience, which they consider to be key competitive differentiators.
An accounting practice, like every other business, wants satisfied clients. Highly satisfied customers buy more than those who are dissatisfied. They become unpaid word-of-mouth advertisers when they recommend the company or its offerings to others. Achieving high customer satisfaction ratings reduces the cost of sales and marketing and helps a company grow. But by how much?
Forbespoints out that “Brands with superior customer experience bring in 5.7 times more revenue than competitors that lag in customer experience. Customer-centric companies are 60% more profitable than companies that don’t focus on customers.”
Accounting services traditionally focused on monthly client writeup, which gave business owners a monthly snapshot of how the business is doing.
Now though, with the advanced features offered by outsourced accounting firms, accountants and their teams can recapture the time it takes to produce financial reports and use it to deliver a broader range of services that help a business grow.
According to Accountancy Age, clients want their accountants to feel confident that their company’s financial performance is under control. When an accountant gives clients that peace of mind, business owners regain time and the focus needed to get on with running their companies.
And when the client’s business is focused and growing, the accounting firm receives its payoff in the form of high customer satisfaction scores and the resulting growth that Forbes and others have documented.
Learn More
Outsourced accounting firms, with their broad range of skills and experience, help businesses and in-house accounting teams overcome some of today’s most pressing financial challenges. If you think your team can benefit from an outsourced accounting partner, contact Lavoie today.
