Investors like funding good ideas, but only if they know an experienced team will manage that good idea to its full potential.
Investors will be looking at how well your team works as individuals and as a group before trusting your firm to source, negotiate, monitor, and exit fund investments.
So, when meeting with potential investors, you want your team laser focused and ready to answer every question investors throw your way, like:
How forward-thinking is your team on issues that impact private equity?
How comfortable is the team managing a complex portfolio like mine?
Describe the technology you use to implement proactive portfolio strategies.
How quickly can the team produce high volumes of customized reports?
Your team’s biggest barriers to making a good impression?
Admin Distractions
If your team has to manage basic accounting tasks or stay on top of regulation changes, their focus will be split between essential and non-essential business functions.
An unfocused team has a greater risk of delivering reactive and lackluster strategies or accruing costly regulator penalties.
Disorganization
When your team doesn’t have a central platform to store, view, and extract financial data, it’s easy for teams to mistakenly (and unknowingly) work off of inaccurate or dated information. Without a centralized location to store client data, your team is more likely to stumble over unnecessary redundancies and inefficiencies.
By outsourcing your firm’s financial operation management and accounting, you let your fund admins focus on improving investment strategies, reports, and client dashboards – tasks that have a direct impact on the business.
Furthermore, your team will all be able to leverage accurate data, the bedrock of effective and proactive investment strategies.
Preserve Your Reputation to Attract Investors
As private equity firms grow, it gets more difficult to maintain a high growth rate. But a high growth rate is exactly what attracts investors.
In response, private equity firms are eager to find efficiencies and cost savings that don’t impact core business functions.
Outsourcing your financial and accounting processes is an excellent way for firms to reduce overhead costs while maintaining transparency and accuracy. Plus, private equity firms can still maintain management fees this way.
Additionally, you can retain a penalty-free track record by relying on your financial partner to monitor regulatory changes and how they impact your business. Plus, your financial partner can make sure your firm is always financial audit-ready.
Broaden Your Expertise
The very best outsourced accounting firms are the ones that can explain the meaning behind the numbers.
At Lavoie, we go a step further by also identifying:
Future cash-flow projects to help you plan your next steps
Think of a company like Lavoie as an extension of your team that you can tap when, for example, you don’t understand why cash flow is low when the business is performing. Your financial partner has both the time and experience to investigate the problem and deliver a list of actionable next steps.
Finally, there is a degree of credibility you can achieve with investors when they know that a professional team is overseeing all the nitty-gritty details of their investment. This also reassures investors that your team’s focus is on their funds.
Free Up Cash Flow to Reinvest in Teams & Tools
There is a multitude of ways to enhance the investor experience at your firm, but very few of them are free.
An important benefit of partnering with an outsourced financial operations management and accounting firm is that it can free up more cash flow. This allows you to reinvest in other things such as team training, hiring new team members, or purchasing industry-leading tools.
When private equity firms experience rapid growth, they are suddenly inundated with heavy cash flow. A partner like Lavoie ensures that you can manage those funds efficiently.
Your financial partner can also manage your accounts receivable, allowing your company to collect payments faster or identify clients who are behind with payments.
They also have the time to carefully review invoices before they’re paid to check for any inaccuracies that can cost you.
The biggest cost savings come from not having to staff an in-house accounting team. With a financial partner, you only pay for additional financial support when you need it.
Meet Expectations of Digital-Savvy Investors & Regulators
Today’s most successful firms leverage the speed and accuracy of financial software to deliver superior client experiences and abide by current regulations.
All client investors expect financial transparency and accuracy and – with the emergence of technology – they expect them at a moment’s notice.
The Securities and Exchange Commission (SEC) also expects greater transparency and accuracy. The surge in private investments, plus the fact that private companies aren’t required to file information with local regulators, drew enough attention for the SEC to tighten regulations.
Today, regulators are more likely to request a report on performance or economic activity. All signs point to more regulations, re-emphasizing the importance of accessing financial information at a moment’s notice.
Financial software could easily alleviate these issues — but the software can’t do all the work by itself. Someone from your firm has to research and select the right product, learn the tool, and train other employees.
Realistically, private investors do not have enough time to do this, but the good news is that they don’t have to. Not when they partner with a financial operations management and accounting firm.
At Lavoie, for example, we make software recommendations to our clients based on the functionalities they need. We are proficient with several programs that satisfy a range of accounting needs.
We also:
Set up the software for you
Create custom dashboards for your clients
Show you how to maximize the tool in ways that add value to your strategy
In Summary
Private equity firms of all sizes can glean deeper insights at a faster pace and with greater accuracy when they have the support of a financial operations management and an outsourced accounting firm.
Firms like Lavoie can reduce operational costs, streamline inefficiencies, and introduce your team to the right software. The resulting improvements in accuracy, communication, and transparency will only enhance the client experience at your firm.
If you’re a private equity firm looking for financial support, contact Lavoie today!
At Lavoie CPA, we leverage accounting as a service and cloud-based accounting 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.
When a business is in growth mode, executives need to make more difficult decisions that are efficient and cost-effective for their organization. The foundation of these decisions is a firm grasp of the financial health of the organization. That is why business owners need professional assistance with core business operations like accounting and financial management. Organizations, however, have the choice to have that professional accounting assistance in-house or hire an outsourced accounting firm.
While in-house accounting staff performs specific business operations such as accounting and financial reporting, outsourced accounting staff can conserve costs and optimize performance through tailored solutions. Businesses get to conserve time and focus primarily on core operations through outsourcing tedious functions. Reviewing the pros and cons of both options will help your business choose which is right for you.
Hiring employees and paying them a fixed payroll to perform specific business operations such as accounting, financial reporting, strategic planning, and HR management is referred to as an in-house resource. In-house accounting teams provide budgeting for the company, as well as bookkeeping, and accounting services.
Pros of In-House Accounting
Dedicated workforce is aligned to the business goals making teams efficient with specific accounting needs
Dedicated teams provide quick solutions as they know the organization inside out
In-house professionals can be trained for other in-house operations
Sensitive financial information remains undisclosed
Cons of In-House Accounting
Teams become a financial burden when workflow is limited
Hiring dedicated resources have a huge retention cost, including state taxes, benefits, training, and employee office supplies and equipment
There is a huge time burden for replacing employees that quit, plus you have to train a new employee from the ground-up
What is Outsourced Accounting?
Seeking professional assistance with accounting from certified firms rather than hiring dedicated in-house resources is referred to as outsourced accounting. Outsourcing projects to skilled firms equipped with resources to perform specific accounting tasks saves businesses from various managerial challenges. Business owners can also make calculated decisions based on information from finance experts. THis is because many outsourced accounting firms offer more robust reporting, insights, and software.
Pros of Outsourced Accounting
Outsourcing ensures you only pay for the workload you need to get done
Proactive businesses outsource and get the job done helping in house employees focus on other pertinent tasks
Vulnerability to fraud is higher in small and medium-sized businesses, which businesses can avoid by working with a team of skilled experts
Access to top-level professionals who understand the latest trends in accounting and can apply their skills to your company’s finances
Cons of Outsourced Accounting
Instructions and communication between a company and an outsourced account firm must be very clear for getting desired results within the approved budget
Business owners have limited control over the processes of outsourced teams
In some cases, outsourced accounting teams are not as responsive as you would want them to be
In-House vs. Outsourced Accounting
It is vital to consider your business’ particular needs when looking for an accounting solution. Here is a list of things to consider when deciding between the two:
Cost Factor
Businesses need to calculate whether they have enough workload to justify hiring a full accounting team. A dedicated in-house accounting team can provide a lot of value but can be expensive when you consider the employee costs (salaries, benefits, overhead). Outsourced accounting can be a more cost-effective option, especially for seasonal work or big projects.
Efficiency
While in-house teams can do the same tasks assigned to outsourced teams, the latter can be more efficient. That is because an outsourced accounting firm’s sole focus is the accounting tasks at hand, whereas your in-house staff may have other responsibilities that require their focus and attention.
Security
While it is unfortunate, there are instances where employee fraud can happen. Companies sometimes prefer outsourcing finances to avoid these situations. Non-disclosure agreements signed between the business owners and outsourced firms ensure protection against fraud. On the other hand, companies that deal with sensitive information may be more comfortable working with an in-house team.
Working Hours
Dedicated employees generally work regular office hours. However, accounting firms operate round the clock and deliver immediately if required. The nature of business is once again a factor of consideration that determines efficiency.
In House Vs Outsourced Accounting – Which One Should You Choose
Both, in-house accounting and outsourcing accounting operations are viable solutions. Once again, business owners must review their business models and decide accordingly. The outsourcing industry is progressing rapidly as businesses are opting for outsourced services in different fields to simplify their operations.
Outsourced accounting teams focus on the particular tasks provided by their clients. While in-house teams can also be highly effective, sometimes they don’t have the experience that some outsourced teams have. For some businesses, hiring outsourced talent is cheaper. At the end of the day, your business needs a professional touch to tackle laborious operations so that you can focus primarily on business development.
Outsourcing projects can significantly reduce various hassles for your business that in-house teams may not be ready to handle. If you require assistance with accounting management services, financial reporting, strategic planning, as well as HR services, consider contacting Lavoie. We also provide cloud-based corporate performance management, accounting, and financial management software solutions that accurately meet the specific needs of small and medium-sized businesses.
The value in not providing traditional accounting services
When most people hear CPA they immediately think tax and audit. Lavoie CPA does NOT provide either service. So, what do we do? We provide world class accounting bundled with leading accounting technology and Outsourced Accounting (Accounting as a Service) to help our clients succeed . But why don’t we provide tax or financial audit services?
Our focus is helping grow your business. We provide financial intelligence you can rely on to make informed financial decisions.
We don’t want to become tax experts. Staying on top of changes to tax laws and regulations is an exhaustive process. We rather partner with tax professionals and focus on what we do best – help grow your business!
We can’t audit ourselves. Since we provide leading finance and accounting services, we can’t audit our own work. However, our clients are always audit ready!
Why do clients come
to Lavoie CPA since we don’t do tax or audit?
Outsourcing will help you conduct a cost effective business by decreasing your payroll. It will help your company give a more specific oriented task to your executive employees.
1 – Cost Savings
Outsourcing makes sense for cutting costs while reducing workload on the employee. Outsourced labor may cost 90% less than the same labor performed in-house in Western Europe or North America, particularly for low-level tasks. You won’t need to make any upfront investment, which makes development projects much more attractive.
2 – Time Savings
Software development takes less time when people are working on your applications around the clock, so you can get your product to market more quickly than your competitors can.
3 – Lack of in house experience
When the internal resources of the company are not enough to globalize the company’s business, Outsourcing software development will bring new dimensions to manage a business worldwide. Business applications will be more sound and systematic for an overall performance.
4 – Flexibility
When you outsource, you don’t have to spend time recruiting, hiring, training, and housing employees for short-term projects.
5- Talented IT Professionals
You’ll have immediate access to some of the best and brightest information-technology professionals by going overseas and bypassing the gaps in hiring pools in more developed countries.
6- Focused Strategy
Outsourcing software development would streamline business processes. It will provide a focused strategy to have a competitive advantage in the technological race.
7 – Improved Compliance
Outsourcing software development would create an automated compliance system that will reduce human follow-ups in business processes.
8 – Enhanced Accuracy
Offshore development will improve work accuracy in terms of given deadlines on a project. Defined software will deliver accurate results in less turn around time.
9 – Technological Advances
Technology is evolving in different countries of the world. Companies thriving to gain competitive advantage are better off outsourcing software development for technological prowess.
10 – Risk Mitigation
You can mitigate risks by choosing an outsourcing firm that has a high-quality project management system and a tried-and-true process for developing applications.
Several functions can be outsourced by a company in different departments. From management training to accounting and financial operations, outsourcing takes care of it all. Website development & web design are increasingly outsourced by almost all companies for better maintenance and timely upgrades. Outsourcing accounting or other certain area of your business makes a lot of sense in order to maximize your profits in a small amount of time.
Founders create businesses because they have a passion or expertise in providing particular goods or services to market and often get caught up on focusing on items outside of their expertise. Being a startup means there’s always more work to do, and not enough time to do it. It is easy to get caught in numerous non-value add tasks that take anyway from working on the business. That’s why most success startups outsource certain tasks to companies or individuals who specialize in providing valuable time-saving services for a fee.
With all the advancements in technology, it’s easier and more convenient than ever to outsource. Here are five things you should consider outsourcing to experts.
1. Accounting & Finance Firms
Most entrepreneurs are not Accountants. However, understanding cash flows or analyzing profitability of a business is vital to its success. Too often startups neglect building an accounting process until profits go downhill or cash slowly drains away. Setting up an accounting process for your startup is critical to the long-term success. An accounting process is also important because it allows your business to look forward. Startups or small businesses that that don’t have an accounting process in place find themselves trapped by past actions or constantly worried about having enough money to pay bills.
In addition to accounting process, setting up an accounting system is important for your startup as it will allow you to see how your business is doing and allow you to make decisions to strategically position your business for growth.
Look for an outsourced accounting firm that does more than just bookkeeping. Partnering with someone that goes beyond debits and credits and gives advice on such things as cashflow will help set you up for success. Technology is vital to help provide necessary insights.
2. Graphic Design and Web Development.
Coming up with a brand-defining logo, an attractive website, and print materials can be extremely time consuming and difficult to get right. Using a professional graphic designer will help your business look its best. They understand a lot of things that you may overlook. Whatever your goals, there’s a graphic designer with the talent, aesthetic sensibilities, and visual skills to fulfill your vision and enhance your company brand.
Look for a graphic designer that offers web development to help streamline the process and provide a unified message.
3. Web Research.
Prospecting for new business and keeping up with the latest developments in your industry can be time consuming and daunting. A web researcher can research information you, whether it’s gathering information and statistics for an upcoming presentation or looking up the names of companies and contacts for a leads list. They can also organize this material in a form that’s easy to use and read.
4. Administrative Assistance.
If half your day is spent sifting through your overflowing email inbox, returning call and making travel arrangement, a virtual administrative assistant (VA) may be just what you need to streamline that frustrating process and keep you from being inundated by a constant stream of on administrative tasks that keep you from more value-added items.
Before you waste your time on something that is not in your expertise, consider outsourcing. This will make your to-do list shorter and free you up to focus on the things you’re best at and that generate the most income for your business.
