On-demand Accounting and Finance

5 ThiNgS FOR MiCROCaPS TO CONSiDER

Being a public company is expensive. Regulatory and compliance costs associated with accounting and finance rules can have a major impact on a company’s EBITDA. Finding ways to better manage these expenses can add significant value to a firm.

As former corporate finance executives and current partners of an on-demand CFO services provider, we have experienced the search for good finance, accounting, and operations support from both sides of the table. Choosing the right finance and accounting staff solution for your business is a matter of balancing your immediate needs and future plans with your resources. In the following article we explore a number of items to consider as you explore your options to meet your finance, accounting and compliance needs.

IS AN ON-DEmAND SOLUTION RIgHT FOR yOU?

If you are open to alternatives to full-time staff and focus on outcomes, there are huge opportunities to find and utilize external, on-demand resources. You just need to determine what kind of solution will work best for your needs. To understand your needs, you need to 1) know what you are trying to solve for, and 2) align your talent to solve that problem.

• What are you trying to solve, or what tasks do you want undertaken? Are they one-time projects like cleaning up your accounts, getting help with a capital raise, or a first-time audit?

Are they ongoing – such as preparing SEC filings, closing out monthly or quarterly books,

or budgeting, forecasting, and reporting? • As for talent, you need to align staff with the problem your solving. Does your current staff meet your business needs today? Do they meet them into the future? Do you need leadership, like a CFO, who will own the process for you?

WHERE IS THE COmPANy IN ITS gROWTH TRAjECTORy?

On-demand solutions are extremely flexible and can adapt for any stage. From creating plans to reach

strategic milestones to implementing a new ERP system, or managing quarterly SEC filings, there are many engagements well-suited for outsourcing to an external vendor. Whether a project-oriented or longer-term engagement makes sense will depend on where your firm is in its lifecycle.

ARE yOUR NEEDS OPERATIONAL OR STRATEgIC? ARE THERE INDUSTRy SPECIFIC ISSUES?

Your finance and accounting operations collect the data and information needed for reporting, analysis, and decision making. As a publicly-traded company you probably have the operational basics covered – it’s a requirement. But the difference between operational and strategic is the difference between managing the close process vs. fixing the close process – establishing systems, timing, quality assurance, and architecting the process from a forward-looking perspective. Financial strategy can also encompass a wide array of services from capital planning to financial modeling of cashflows to secondary equity or debt offering planning. Prioritizing these needs can help determine how an outsourced solution can best support you. The better you know what you are looking for – the better the results will be.

Engage any prospective outsourcing partner in discussions about your requirements. Their outside perspective can even suggest what you might need, and it is a big part of the relationship building process. The experienced on-demand providers, like Eventus, have worked with many firms in similar situations to yours and helped them overcome the challenges they were trying to surmount.

Sometimes industry specific knowledge trumps general accounting and finance skills. If your business operates in a unique industry, can the differences be quickly learned by a finance and accounting generalist? Crypto is one example that comes to mind. The current environment for managing the accounting of crypto is highly fluid. Experience and expertise in crypto are difficult to find but needed if that is your business.

COSTS vS. vALUE

As always, when looking for vendors, shop around – but avoid shopping on price alone. Many factors will go into the pricing of an outsourced solution – from actual tasks to the alternatives for a more strategic approach to the problem. Often an outsourcing partner will identify issues you didn’t know were issues but need to be addressed.

When thinking about costs consider the entire team. What is the cost to build out or replace the entire team you need to do the job – both the tasks and the strategic management of the finance function? If you hire in-house, is there enough work for them to do to justify the comprehensive full-time employee cost – taxes, benefits, salary, bonus, etc.

Is the expense based on a single function, a CFO, controller, or accountant – or will you need three roles to meet your needs? You may need a CFO role 5% of the time, controller 20%, and accountant 40% – let alone the SEC filing team which usually is needed the most before a filing for a public company. Can you fill this need with one person? If current staff can do part of the job – but what about the other aspects?

When analyzing costs, focus on the entirety of the needed team. An outsourced solution should save you 30-50% compared to hiring in-house full-time. The savings come with the added benefits of greater flexibility and more experienced professionals.

THE RELATIONSHIP mATTERS

With an outsourced solution, you need to have confidence not only in the manager doing the work, but also the entire firm. It is a strategic vendor relationship that, when successful, will make your firm better operationally, strategically, and profitably.

The outsourced manager will be a member of your team and a part of your leadership. You want to get to know them and trust them – like you would an employee. This will help you get the most out of the relationship with the partner.

With the leaders or owners of the firm get to know them as you would any trusted advisor. They are there to add value to your business, as well as accommodate new requests, changes to the team, or address shortfalls in expectations.

For more information about Eventus Advisory Group, please visit: www.eventusag.com