Guide for Start-Ups Looking to Partner With an Outsourced Accounting Firm

Guide for Start-Ups Looking to Partner With an Outsourced Accounting Firm

For investor-backed companies, like start-ups, an outsourced accounting firm, also known as a financial operations management and outsourced accounting firm, offers many benefits that allow start-ups to scale, save time, and reduce operational costs and risk. Learn how to leverage a financial partner to help you and your team keep up with the demands of expansion, regulators, and investors.

What is Outsourced Accounting?

An outsourced accounting firm is a professional firm that provides financial services to client businesses. These firms are hired to provide specific services like cost reduction, financial reporting, payroll processing, and system and process assessments. An outsourced accounting firm can provide more comprehensive and reliable services than an in-house accounting team.

Common functions that investment-backed companies outsource include:

  • Bookkeeping
  • Managerial accounting
  • Tax accounting
  • Financial Audits
  • Controller services
  • Outsourced CFO services
  • Financial analysis
  • Payroll services
  • Compliance
  • Human resources

How Investor-Backed Companies Can Benefit from Outsourced Accounting

In the early stages of development, start-ups don’t usually have an established or consistent revenue stream, making growth and long-term financial stability essential goals.

As start-ups do grow, they need the right financial infrastructure in place to handle the rising cash flow, regulation requirements, and overhead costs.

This is where an outsourced accounting firm can deliver immediate value by offering these benefits:

Build Trust With Investors

Outsourcing accounting services can be a smart move for start-ups looking to impress their investors. By working with a reputable accounting team, start-ups can demonstrate to investors that they are serious about their financial management and have taken steps to ensure accuracy and financial transparency.

Additionally, an experienced accounting team can provide valuable insights and recommendations that can help start-ups make informed financial decisions and optimize their cash flow. All of these factors can contribute to a more positive perception of the start-up by investors, increasing the chances of securing funding and building long-term partnerships.

Access to Specialists Without Overhead

No one in business disputes the value of a quality CFO, but affording one with a start-up budget can put this essential role out of reach. Outsourced accounting firms make industry-leading proficiency financially accessible. Trust our knowledgeable outsourced CFO professionals, who possess industry-specific insights and a wealth of experience, to guide your financial decision-making.

They bring a level of experience to the table that start-ups may not have in-house or cannot afford to bring in-house. By leveraging the knowledge and skills of an external accounting team, start-ups can ensure that their financial management is accurate, compliant, and up-to-date without diverting internal resources away from core business activities.

Improve Internal Controls

Without a CFO in place, investor-backed businesses have no one to spot signs of fraud, like unusual transactional or billing activity. This puts companies at greater risk, which can be eliminated with an outsourced accounting partner.

Enhanced Data Security

Financial operations management firms protect business data with encrypted cybersecurity programs. This can be a real point of confidence for a start-up’s investors and employees, knowing that personal customer or employee information is safe.

Flexibility to Scale

A good outsourced accounting firm will tailor its services to meet its clients’ most immediate needs. This is good news for investment-backed companies who need to stay financially lean. By outsourcing financial duties, a start-up can save money by limiting spending to critical areas only.

Start-ups only pay for the services they need. Plus, start-ups can scale and decrease services with the ebb and flow of businesses. With an in-house team, you have to pay salary and benefits regardless of the workload.

More Time For Growth

Outsourcing can also free up time and resources for start-ups and their leaders, allowing them to focus on growth strategies.

First and foremost, outsourcing allows start-ups to delegate time-consuming and complex accounting tasks to an external team of specialists, freeing up internal resources. This can be especially important for start-ups, which often have limited staff and resources.

Outsourced accounting for start-ups can also provide access to advanced accounting tools and technology that they may not be able to afford or implement in-house. This can help to streamline accounting processes, reduce errors, and increase efficiency, making growth an attainable reality for start-ups.

Advanced Services You Can Expect from an Outsourced Accounting Firm

In addition to the benefits above, a financial operations management and outsourced accounting firm can provide these added perks to your invest-backed business.

Cash Flow Management

Use your outsourced partner to run an analysis of your expenses and profit statements. With this information, your partner can plan effective strategies to deal with potential roadblocks.

Forecasting

Leverage your partner firm’s forecasting experience to map out strategies that address performance needs in the short and long term.
Growth and Exit Strategies

Let your outsourced accounting firm prepare business plans, forecasts, and other essential documents needed to raise more capital for growth.

Business Systems and Process Improvements

Who better than an outside financial specialist to advise on areas where your start-up can improve efficiencies? This includes things like month-end reporting, credit and collections, and even your business strategy to maximize returns.

Potential Cons of Partnering With an Outsourced Accounting Firm

While there can be some potential obstacles when working with a financial partner, most can be avoided with good communication up-front and by finding a firm that feels like a natural fit.

Outsourcing for the First Time

If you’re not familiar with using an outsourced accounting firm, you may not know how to fully leverage the firm’s capabilities. To avoid this, start-ups can ask potential partners to walk them through their typical work process.

Cost

While using an outsourced accounting firm can save investment-backed companies money, if not carefully managed, the partnership can cause costs to soar quickly. This can be prevented by asking potential partners for a detailed estimate and factors that would impact the price. Also, be upfront about your budget. A good financial partner will tailor a solution to match it.

Poor Communication

Bad communication can result in many of the issues above. From the start, make sure you and your outsourced accounting firm are in agreement on the process and modes of communication, as well as goals and objectives.

Bad Fit

Just as there are numerous types of investment-backed businesses, there are also numerous investment firms that specialize in niche sectors. Look for a firm that has experience with a company similar to your size, structure, and industry.

Tips to Help You Choose the Right Financial Partner

As we mentioned, many of the potential risks of hiring an outsourced accounting firm can be avoided if you’re able to find a firm that understands your culture, verticals, and goals. Here are questions and considerations that can help you find the best fit.

What Are Your Short and Long-Term Business Needs?

Start by taking into account your specific business needs to determine if they’ll be met in your partner’s tailored package.

What services or support do you need?  What type of data is being shared with external personnel, and which tasks should remain in-house because of their confidential nature? For instance, if your company requires tax accounting or bookkeeping but not payroll processing, these duties are ideal for outsourcing.

What Is Your Budget?

If you are unsure about how much it will cost to outsource your finance and accounting services, don’t fret. You can make an educated guess based on some key factors.

Ask yourself:

  • How much can my organization afford to spend on outsourced services?
  • What specific services does my organization need?
  • What value will the services bring to my organization?
  • Are the costs of an in-house team and technology stack cheaper than the cost of an outsourced team and technology stack?

Keeping these questions in mind can help you make an informed decision about the cost of outsourcing your finance and accounting services. You can also compare and contrast pricing between your top picks.

Check the Firm’s Reputation & Experience

It is important to do your research when looking for potential providers. Check out what previous customers have to say about them, and make sure they have experience in industries or with clients similar to yours.

It is important to find a financial outsourcing partner that has experience in the industry and understands the complexities of your business. Make sure to ask for references from previous or existing clients.

Ask Questions

Here are a few questions to get you started, but you’ll likely have questions specific to your business structure.

  • What experience do you have working with start-ups?
  • What accounting software do you use and what features does it have?
  • What services do you offer, and what is your pricing structure?
  • How do you ensure the accuracy and timeliness of your services?
  • How do you communicate with clients?
  • Are you familiar with any tax regulations specific to start-ups?
  • What is your experience with raising capital?
  • What other services do you offer that may be beneficial to a start-up?
  • Are you willing to provide references from other start-up clients?

Next Steps

If you’re ready to start your search for an outsourced financial partner, here are a few to-do’s to complete before you begin your search:

  1. Are you open to new and updated accounting practices?
  2. Are you willing to share access to your financial data with a partner?
  3. Is your team ready to adopt process improvements your financial partner may recommend?

Contact Lavoie

If you answered yes to the questions above, it’s time to find a partner you can trust. With the right partner, you can gain the knowledge, skills, and experience required to optimize your financials and reach the goals you have for your start-up.

Contact Lavoie today to learn how their experienced team of financial professionals can provide you with the support you need to successfully manage your finances. We have extensive experience supporting investment-backed companies.

Contact us online or by calling 704-644-0235.

Due Diligence Checklist 101: What Venture Capitalists Need to Know

Due Diligence Checklist 101: What Venture Capitalists Need to Know

Before investing in a company, venture capitalists run what is called a due diligence checklist. This is a rigorous process that looks closely at all aspects of a company, including assessing business legal, financial, and human resources status. By performing a thorough review of the company, investors can move forward with their investment with confidence.

Additionally, the due diligence process helps investors gauge the potential risks and rewards of the investment. If the due diligence results are sound, usually the investors will move forward.

To help you understand exactly what company details are reviewed closely, we discuss each part of the checklist.

What is Due Diligence?

Venture capitalist firms use due diligence to ensure that potential investments are sound and will generate a good return. This process allows venture capitalists to evaluate the potential risks and rewards associated with any given investment, as well as gain a better understanding of the company and its operations.

This process looks at a variety of sources, including the company’s financial documents, legal documents, market research, and other related material. Additionally, venture capitalists may consult with specialists such as lawyers, tax advisors, and industry analysts to gain a better understanding of the company and its prospects.

Ultimately, due diligence can help venture capitalists make informed decisions about which investments to pursue.

Types of Due Diligence

Venture capitalists will look at more than just a company’s financials to get a comprehensive view of the company’s standing.

Financial Due Diligence

Financial due diligence is a process in which an independent third party reviews the financial records and operations of a company to assess its value, financial strength, and potential risks. The goal is to provide an informed opinion on the company’s financial position and future prospects. It is typically conducted prior to a merger, acquisition, or other business transaction.

This step looks at the market, top competitors, required permits or permissions, and who the company can or can’t conduct business with.

Regulatory Due Diligence

Regulatory due diligence evaluates a company’s compliance with applicable laws and regulations. Existing shareholders, certificates of incorporation, existing contracts and/or arrangements, and other rights pertaining to the company capital are all examples of what investors will evaluate. A look into these areas makes sure that any investment made in the company will be in compliance, especially if the company has had any previous legal disputes.

Tax Due Diligence

Tax due diligence is a process of assessing the tax compliance of a company by reviewing tax laws, tax returns, and financial audits. Venture capitalists use it to guarantee that any investments they make follow tax regulations and that the company’s taxes are being paid properly.

Tax due diligence gives investors greater insight into the tax implications of their investments and identifies any potential liabilities.

Legal Due Diligence

Legal due diligence evaluates a company’s compliance with legal requirements, again, to make sure everything is compliant with regulations. Investors will look at shareholder resolutions, a certificate of incorporation, previous capital charges, and any contracts that could be terminated. Legal due diligence helps identify any potential issues that could affect the investment.

Intellectual Property Due Diligence

Intellectual property due diligence is a process of assessing the patents, copyrights, and trademarks held by a company. It ensures that investments don’t violate existing intellectual property rights and helps identify any potential IP issues that could affect the investment.

Information Technology Due Diligence

Information technology due diligence evaluates a company’s IT systems, processes, and procedures, as well as if the company is exposed to cybersecurity risks. Venture capitalists use it to ensure that any investments they make are supported by a strong IT infrastructure.

Human Resources Due Diligence

Human resources due diligence is a process of evaluating a company’s human resources policies and procedures, including its workforce mix, benefits, salaries, and bonuses. It’s not uncommon for investors to request organizational charts, stock options, and benefits packages, the details of past disputes with employees, and contact information with all third-party vendors.

Operational Due Diligence

Operational due diligence is a process of evaluating a company’s operations, including current processes, supply chains, logistics, procurement efficiencies, and risk management. Venture capitalists use it to make certain that the business is running well and can support any future investments.

Risks of Not Performing a Complete Due Diligence Check

If venture capitalists fail to use a due diligence checklist, they may expose themselves to unnecessary risks with costly outcomes. Without a thorough review of the company’s financial records, management team, industry trends, competitive landscape, and other operational matters, the venture capitalist may not have a full understanding of the company and its prospects. This can lead to poor decisions and a potential loss of funds. Additionally, it can increase the risk of legal and financial issues associated with the investment.

In Summary

The due diligence process is one of the most important steps that venture capitalists take, and working with a financial partner like Lavoie, can ensure the due diligence findings are as accurate as possible.

An outsourced accounting firm like Lavoie has the resources and experience to evaluate the potential company’s financial statements and financial health and provide guidance on potential risks and rewards associated with the investment. Additionally, a venture capitalist accounting company can provide advice on tax liabilities and other financial matters associated with the investment.

Consult with Lavoie to prepare for your upcoming investment. Contact us online today.

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA & Jirav Launch Strategic Partnership

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 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.

Contact slavoie@lavoiepllc.com to request a demo today. To learn more about the platform, please visit https://www.jirav.com/.

About Lavoie CPA

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.

Women’s Enterprise USA Magazine Salutes Top WBE CEOs of 2021

Women’s Enterprise USA Magazine Salutes Top WBE CEOs of 2021

DALLAS — Women’s Enterprise USA has released its list of Top Women-owned Business Enterprise CEOs of 2021 — a group of visionary women business leaders who demonstrate the best and brightest of women-owned business enterprises. Women’s Enterprise is an award-winning print and digital publication focused on the development and accomplishments of women-owned businesses.

“These CEOs are leading the way for other female entrepreneurs to bring competitive, collaborative and innovation solutions to a marketplace in motion,” said Kristin Schneider, publisher of Women’s Enterprise. “Our Top WBE CEOs of 2021 have not only built successful companies, they are changing the way the world does business.”

To determine the top CEOs, WE USA’s team of advisors and editors reached out to the regional partner organizations of the Women’s Business Enterprise National Council and business leaders throughout the country to identify women business owners who have achieved measurable success, advanced innovation in their industries, become role models and contributed substantial time and effort to helping other WBEs. The following are the WBE CEOs ― in alphabetical order ― who most strongly exemplify these characteristics.

 Juuhi Ahuja, Founder, CEO and President, Wise Men Consultants, Houston, Texas
Imelda Alejandrino, CEO/Creative Director, AP42 Marketing and Technology, San Ramon, California
Dana C. Arnett, CEO, Wicked Bionic LLC, Los Angeles, California
Camille Austin, Owner, Elite Roofing Services Inc., Tampa, Florida
Michelle Aristeo Barton, President, Aristeo Construction Co., Livonia, Michigan
Debra Berry, CEO, Berry Industrial Group Inc., Nyack, New York
Donna Brin, Founder & CEO, bFIVE40, Little River, South Carolina
Gabrielle Christman, President and CEO, Hunter International Inc., Avon, Ohio
Donna Cole, President/CEO, Cole Chemical & Distributing Inc., Houston, Texas
Jacqueline Darna, CEO, Darna & Co. LLC dba NoMo Bands, Tampa, Florida
Iyabo Dedmon, President, ThriveOn Concepts, North Kansas City, Missouri
Dana Donofree, Founder and CEO, AnaOno LLC, Philadelphia, Pennsylvania
Nathalie Doobin, Owner, President and CEO, Harvard Services Group Inc., Miami, Florida
Leanne Duong-Ma, President/Owner, Direct Source Procurement, Las Vegas, Nevada
Pamela Feld, Founder and CEO, Triumph Technology Group, Tustin, California
Jill Frey, President and CEO, Cummins Facility Services LLC, Prospect, Ohio
Nenette Gray, Founder and CEO, Lemonade Creative Marketing LLC, Baton Rouge, Louisiana
Lili Hall, Founder, CEO and President, KNOCK Inc., Minneapolis, Minnesota
Linda Hamilton, CPA, CEPA, SYSTEMologist®, Linda A Hamilton CPA PLLC, New York, New York
Kyra Hardwick, MBA, Managing Consultant, The Kyra Co. LLC, Houston, Texas
Jodi Cannon Hohman, CEO, Lagarda Security, Burton, Michigan
Kate Holby, Co-Founder, Ajiri Tea Co., Upper Black Eddy, Pennsylvania
Porcha Johnson, Founder and Publisher, Black Girl Health, Harrisburg, Pennsylvania
Hannah Kain, President and CEO, ALOM Technologies Corp., Fremont, California
Sharai Lavoie, CEO/Managing Member, Lavoie CPA PLLC, Charlotte, North Carolina
Mary Lawrence, President, Richards Graphic Communications Inc., Bellwood, Illinois
Elizabeth Ledoux, Founder and Head Strategist, The Transition Strategists, Ft. Collins, Colorado
Sandy Lish, Principal & Co-Founder, The Castle Group Inc., Boston, Massachusetts
Betty Manetta, President and CEO, Argent Associates, Plano, Texas
Michelle Manire, CMM, Founder and President, Coast to Coast Conferences & Events, Long Beach, California
Dee C. Marshall, CEO, Diverse & Engaged LLC, Newark, New Jersey
Carol Muszynski, President, Eighth Day Design Inc., Falls Church, Virginia
Carmen Nazario, President/CEO, ELYON International Inc., Vancouver, Washington
Mary Parker, CEO, ALL N ONE Security Enterprise, Atlanta, GA
Lauren Rakolta, President & CEO, DFM Solutions Inc., Detroit, Michigan
Ann Ramakumaran – will send responses, CEO and Founder, Ampcus Inc., Chantilly, Virginia
Angelica Rivera, President and CEO, Colmex Construction LLC, New Orleans, Louisiana
Silvana Rosero, President & CEO, Laguna Media Group, Grand Prairie, Texas
Jenell Ross, President, Bob Ross Auto Group, Bobrossauto.com
Molly Sandlin, Founder and President, CAET Project Management Consultants LLC, Keller, Texas
Rosa Santana, Founder and CEO, Santana Group, San Antonio, Texas
Billie Bryant Schultz, CEO, CESCO Inc., Dallas, Texas
Wendy Spivak, Principal & Co-Founder, The Castle Group Inc., Boston, Massachusetts
Debra Stevens, Principal, The Stevens Group/International Tenant Representative Alliance Global, Boston, Massachusetts
Liora Stone, President, Precision Engineering Inc., Uxbridge, Massachusetts
Amy Tiller, CEO and Co-Founder, Inspired Results Inc., Portland, Oregon
Andrea Tsakanikas, President, CrewFacilities.com LLC, Austin, Texas
Nina Vaca, CEO, Pinnacle Group, Dallas, Texas
Biddie Webb, Partner, Limb Design LLC, Houston, Texas
Liz Whitehead, CEO, 12PointFive LLC, Silver Spring, Maryland

 

For questions, please contact:

Kristin Schneider, Publisher

kristin@wegp.biz

 

About WE USA magazine

Now close to celebrating its 30th anniversary, WE USA magazine is America’s award-winning resource for information on women’s business enterprise and diversity. Reaching an audience of women business owners, corporate procurement managers and executives, education professionals and government representatives, WE USA focuses on value for the readers, advertisers and communities it serves. For more information, visit weusa.biz.

    Sage Intacct’s 6 Key Performance Metrics For Subscription Businesses [INFOGRAPHIC]

    Sage Intacct’s 6 Key Performance Metrics For Subscription Businesses [INFOGRAPHIC]

    How Healthy Is Your SaaS Business? These 6 Metrics Will Help You Figure That Out

    As a Sage Intacct certified accounting and implementation firm, Lavoie CPA is excited to share the latest findings for SaaS businesses to become successful in 2021.

    From startups to organizations ready to scale each one of these indicators is an invaluable piece of information to evaluate your company’s overall health — not to mention prep you for that looming board meeting in the near future.

    In this infographic we will dive into why each of these metrics is the difference between getting your next round of funding, scaling year over year, or hitting the wall.

    Get the infographic and learn why you should care, how to calculate, and an interesting fact about the following KPIs:

    • CARR (Committed Annual Recurring Revenue)
    • CAC (Customer Acquisition Cost)
    • CLTV (Customer Lifetime Value)
    • Churn
    • Free Cash Flow
    • CCS (Cash Conversion Score)

    Lavoie CEO Named Goldman Sachs NC Hill Week Captain

    Lavoie CEO Named Goldman Sachs NC Hill Week Captain

    As the election season draws closer and the concerns of small businesses continue to grow in the wake of the pandemic, SMB’s are joining forces to make sure their voices are heard in congress. According to a Goldman Sachs survey released on September 8, 88% of small business owners have exhausted their PPP loan funding; with 43% of Black small business owners depleting their cash reserves by the end of the year. 

    To help amplify US small business needs, Goldman Sachs is using its 10,000 Small Businesses (10KSB) Initiative to serve as a policy platform and community resource center. However, prior to the COVID-19 crisis, the 10KSB alumni collectively represented $12 billion in revenues and employed 175,000 people. More notably, 44% of these businesses are family-owned and 66% are minority and women-owned businesses.

    “The 10,000 Small Businesses Voices initiative is designed to help small business owners in the United States advocate for policy changes that will help their businesses, their employees, and their communities,” according to Goldmansachs.com. “We provide the 10,000 Small Businesses Voices community with the tools, resources, and training needed to make their voices heard and drive tangible impact against real issues.”

    Among the many tools to assist small businesses, the program includes surveys, open letters to congress, and ongoing virtual events to help guide owners through ongoing challenges and the most recent policy changes.

    One of these events was the Virtual Capitol Hill Day held on June 9th -11th. Over three days, 2,100 small business owners connected with Members of Congress through 434 online meetings across all 50 states, Washington D.C. and Puerto Rico. Lavoie CEO, Sharai Lavoie, was named a NC Hill Week Captain and lead discussions with congressional leaders and small businesses across the state.

    Lavoie led three discussions one of which was with Congresswoman Alma Adams, representing North Carolina’s 12th District. Discussion topics included:

    “I was thrilled to participate in this initiative,” says Lavoie CEO, Sharai Lavoie. “It’s programs like these that will give SMBs a fighting chance and help promote policies that positively impact the everyday American business owner.” 

    To learn more about the 10,000 Small Business Voice initiative, check out the website to access resources or participate in the many surveys to inform congress of US business owners’ ongoing needs.