5 Myths around Outsourcing Finance Functions

5 Myths around Outsourcing Finance Functions

by | Jan 22, 2018 | Accounting, Analytics, Big Data, Blog, Cashflow, CPA, ERP, Finance, Growth, Intacct, KPI, Outsourcing, Quickbooks, SaaS, Services, Small Business, SMBs, Software, Technology

Outsourced Accounting or Accounting as a Service (AaaS) providers 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 financial audit and internal controls. Outsourced CFOs 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
Our CPA Day of Service

Our CPA Day of Service

by | Sep 27, 2017 | Corporate Social Responsibility, Accounting, CPA, Finance, Lavoie

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 to allow members to “take to their communities and give back in some way”.

As a member of the NCACPA and the Charlotte community, we have made it a priority to participate in this event every year by volunteering with Habitat for Humanity, one of the global nonprofit housing organizations in the US. The organization works toward helping people in the community to build or improve a home and they rely on volunteers to be able to do so.

“Everyone deserves to have a place to call their own regardless of their income level.  Affordable housing is pivotal to reducing poverty in Charlotte and beyond.  Habitat for Humanity Charlotte provides the hand-up needed by thousands of local and global families.   We always look forward to spending the day with the wonderful people at Habitat ReStore and doing our part towards being a part of the solution. Shopping afterwards is always an added perk!  I always find something there!”

– Sharai Lavoie, CEO and Managing Member at Lavoie CPA.

Habitat for Humanity ReStore

On Friday, September 22, all our employees met up at one of the two Habitat ReStores, which functions as the fundraising division of Habitat for Humanity of Charlotte. The ReStores accept donations of new or used items and resells them to the public at a reduced cost. Consequently, Habitat can use the proceeds to build Habitat homes with their local affiliates. There are currently two locations in Charlotte, NC, which allows Habitat to build approximately 10-12 new homes every year.

Volunteers are necessary for Habitat’s success and when it comes to the ReStores they are mostly in need to people to help them with unloading donated items, organizing and cleaning donations, placing the items on the sales floor, and aiding customers with carry-outs of purchased items.

“We had a very rewarding time helping the community and bonding with our Lavoie CPA Team. Habitat is a great organization that helps struggling family’s get on their feet through volunteers and the family working together”

– Doug Burkhart, Senior Financial Consultant at Lavoie CPA

Thank you to Habitat for Humanity for letting us be a part of your mission and giving back. If you are interested in volunteering please visit the Charlotte ReStore website or email the Volunteer Coordinator of Retail Operations at volunteer@charlotterestore.org.

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How to Improve Your FP&A Process Right Now

How to Improve Your FP&A Process Right Now

by | Aug 2, 2017 | Analytics, Big Data, Finance, Planning, Software

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 (FP&A) teams are currently spending 53% of their time on reporting and data gathering alone.

“Reporting, whether it’s on actuals or forecast or planning should be quick. We shouldn’t be spending a lot of time on that,” says Jim Johnson, CFO of Adaptive Insights. “We should be spending much more time on the model that’s supporting it. The predictive analysis, the key performance indicators and the stuff that is really important for the company.”

There is a good reason why employees should spend more time on analytics. Oracle found that businesses who were effective at integrating financial and operating data, using analytics in processes and utilizing predictive analytics outranked their peers by 70% on profit and revenue.

How Can You Improve Your FP&A Process?

Implement a Dynamic Planning Process

First of all, your business need to incorporate a FP&A process that allow for flexibility. Rolling forecasts, for example, is one way to ensure you are adapting to market forces. Since rolling forecasts ultimately is an approach where you add or drop data on a rolling basis, you consequently have real-time insights to your performance against your predictions. APQC reported that an organization can save a median of 25 days on the annual budgeting cycle by using rolling forecasts.

“It makes no sense to use a 19th-century tool to manage 21st-century company in a volatile global economy,” argues Steve Player, a program director at the Beyond Budgeting Roundtable. “In the old days, the CFO sat in the back of the ship recording what happened. Now, the CFO stands on the bridge looking forward and adjusting for variables.” With Lavoie CPA, you can tap into the expertise of our experienced outsourced CFO services, which bring a wealth of knowledge and industry-specific insights to guide your financial decision-making.

Traditional annual budgets have limits. They often take too long to prepare, and when completed the data is already out of date. Rolling forecasts offer continuous updates to your data and a longer horizon with data up to 12-18 months ahead. Thus, you have much more accurate data and reliable insights. This, as a result, allows you to take more strategic decisions about your business.

Related: How to Improve Your Sales Forecast Accuracy

Make it Easy for Employees to Collaborate

Collaboration among employees and management is crucial for your business. First, they help you realize your goals, but they can also aid in reducing hidden costs. According to research by CEB, hidden budgeting and forecasting costs may prevent companies from realizing their full potential of investments in FP&A improvements.

How do businesses encourage collaboration? There’s one simple answer. Leverage technology.  Cloud-based accounting software is a great solution for companies that have data that needs to be shared and aggregated by more than one employee. In addition, cloud software also allows for employees to access the same data from virtually anywhere. Finally, most cloud-based software providers offers integration with other enterprise systems, which allows you to have one source for your performance management.

Related: A Beginner’s Guide to Cloud Computing

Conclusion

While you may think your business is doing well enough, your competitors are advancing by implementing better FP&A processes like the ones discussed above. Don’t wait, instead, invest in FP&A processes that will help your business achieve outstanding results and reduce hidden costs.

How to Improve Your Sales Forecast Accuracy

How to Improve Your Sales Forecast Accuracy

by | Jul 11, 2017 | Analytics, Cloud, Finance, Forecasting, Metrics, Planning

What is Forecasting and Why is it Important?

Forecasting is an essential part of every business as it helps you avoid unforeseen issues and manage your business more efficiently. The sales forecast is especially important, as it serves as the base for your company’s goals, profit and growth potential. But, to be able to depend on a sales forecast, you need it to be accurate.

Related Reading: Should Small Businesses Forecast?

Forecast Pitfalls

The problem for many businesses is that their sales forecast is based on data that isn’t accurate or realistic. Adaptive Insights’ CFO Indicator Q2 2016 report showed that only one in four CFOs met their sales forecasts. Relying on a sales forecast that is based on the wrong data can cause a lot of headache. If you are sick of coming up short on your goals, take a look at the steps below to improve your sales forecast accuracy.

Steps to Improve Sales Forecast Accuracy

1. Understand your buyer’s journey

A sales forecast is based on your sales goals and ultimately who ends up buying your products or services. While historic sales data is important, you also need to make sure you understand your buyer’s journey and each step of the sales process. Ultimately, the sales process only moves forward when your potential buyer makes a decision. Therefore, you should aim to outline each step of the buyer’s journey, what decisions are made along the way and what you can do differently at each stage. This will also allow you to make better predictions on your sales goals.

2. Incorporate external factors

It is common that companies only concern themselves with internal data and don’t realize the impact that external factors may have on your sales. As a result, their data is wrong. Because of this, you should research economic factors that have had a historical impact on your company’s sale and include in your forecasts.

3. Shorten your forecasting cycle

Finally, you should forecast more frequently, as it allows you to be alert earlier if expectations don’t match results. Consequently, you can take action quicker and prevent any arising problems.

“Consider pushing your annual forecast back to later in the year. We used to do our forecast in August but now have pushed that all the way back to November. And in the past six months, we’ve created a new forecast almost monthly. Creating that many new forecasts can take a lot of time, but sometimes it’s necessary. In the end, you don’t want to run a business off of a forecast you no longer have confidence in.”

– Jeffrey Hollender, Seventh Generation, in an interview with Inc.com

One approach to increasing the frequency of your forecasts is by using a cloud-based performance management systems (CPM). Using a CPM system allows you to constantly adjust and fine-tune your forecasts. This means you can view real-time data and make better informed decisions with your business.

In conclusion, you need to establish a framework that offers clear communication and no surprises. This will allow for an improved sales forecast accuracy that, at the end of the day, gives your business a better chance of succeeding.

What steps is your company taking toward improving forecasting accuracy?