Emerging Trends: High Growth Companies Focus on Collaborative Outsourcing—Cloud Software Systems + Staffing Solutions

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High growth companies are focused on new products, building revenue and expanding, leaving little time or inclination to manage back office operations. Constantly being asked to do more with less, …

High growth companies are focused on new products, building revenue and expanding, leaving little time or inclination to manage back office operations. Constantly being asked to do more with less, many CFOs have turned to creative forms of outsourcing and cloud-based automation to improve their financial systems and staffing.

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  • 1. sISSUES & INSIGHTSEmerging Trends: High Growth Companies Focus on CollaborativeOutsourcing—Cloud Software Systems + Staffing Solutionsby Tom MescallHigh growth companies are focused onnew products, building revenue and ex-panding, leaving little time or inclina-tion to manage back office operations.Constantly being asked to do morewith less, many CFOs have turnedto creative forms of outsourcing andcloud-based automation to improvetheir financial systems and staffing.This is especially true of high growthcompanies that want to keep the major-ity of their staff focused on developingproducts, finding and servicing cus-tomers. Collaborative Outsourcing of-fers an advantageous balance of valueand control for today’s CFO. office operations. With Software as ing. The outsource vendor can payToday’s Cloud Financial Services a Service (SaaS) arrangements, there bills, process transactions and produceSolutions is no requirement to purchase soft- financials using a cloud accounting so-One way companies are saving money ware and the solution adds value right lution. The CFO or finance executivein the finance department is automa- away. Department leaders seeking to can access the same system to approvetion of routine tasks. A multitude of cut their individual IT expense line expenses and run financial reports…cloud financial services solutions have items are eager to make the leap to the Collaborative Outsourcing.gained market share, including but not cloud. Often, the IT department is notlimited to: consulted before a cloud accounting Firms that merge cloud software and• Financial management and ac- services contract is signed. outsourcing services to create Col- counting solutions like Intacct, laborative Outsourcing solutions help NetSuite, and Xero Collaborative Outsourcing: Best of the CFO organization remain focused• Tax software such as GruntWorx Both Worlds on strategy, rather than the details of and SpeedTax We believe a future market trend will in-house staffing or IT sprawl. With• Stock plan software packages like be Collaborative Outsourcing. This Collaborative Outsourcing, control EASi and OptionEase is where your outsource vendor will over financial data resides with you• Customer relationship manage- deliver their services utilizing a cloud (the company), while the service pro- ment tools such as Microsoft Dy- technology. This allows the CFO and vider has the expertise to capitalize on namics CRM and Salesforce.com management team to access its sys- cloud software for the management of tem anywhere, anytime and allow the day-to-day operations.Companies that use these technolo- outsource vendor to access the samegies internally take a “do it yourself” technology to carry out its services. For instance, a growing technologyapproach to managing their back A great example is outsourced account- firm may seek to bring order and disci-© 2011 Armanino McKenna LLP. All Rights Reserved.
  • 2. sISSUES & INSIGHTSpline to its stock option program. The barriers, while eliminating the burden The CFO just logs on and consumesfirm’s CFO has seen a few SaaS stock of software implementation and main- information. It’s as simple as using aoption systems on the market, but he tenance. smartphone app.does not have a manager with the fullset of skills to manage the software and Armanino Consulting’s client Digital Conclusionrelated reporting. Instead of conduct- Chocolate engages with our firm for Collaborative Outsourcing is great foring the necessary activity in-house, Equity Compensation Outsourcing high growth companies that don’t wantthe CFO can rely on an accounting services. “You’re not going to be a to hire human resource managers, pay-firm with a Collaborative Outsourcing hero for getting stock option reporting roll managers, controllers, IT staff, andmodel that leverages technology for its right, but you will get a lot of grief for so on. Future Collaborative Outsourc-clients. getting it wrong,” said Jack Chiew, ing offerings may include management Corporate Controller of Digital Choco- dashboards that offer a fresh, collab- late. orative and dynamic service in contrast to the dated, static financial reporting The combination of financial manage- that accounting outsourcing has of- ment outsourcing and cloud comput- fered in the past. The accounting firm ing provides an improved platform will design the dashboards, maintain for seamless and integrated financial stability, and provide added analytics. processes and it supports management The CEO and senior management will Collaborative Outsourcing: Best of Both Worlds decision making by offering access log on from anywhere in the world to to real-time key performance indica- view his/her dashboard and analyze the tors. Collaborative Outsourcing allows organization’s business performance.Our firm conducted extensive research companies to use the same technol-of all SaaS stock option programs and ogy as its outsourced accounting firm, Rapidly changing business needs havenow recommends a turnkey solution to so both the client and the accountant placed a premium on the ability to stayall pre-IPO firms. Armanino Consult- are accessing the same data, the same nimble and flexible. In this environ-ing’s Equity Compensation Outsourc- software application and speaking the ment, Collaborative Outsourcing willing solution includes: same language. play an increasingly important role,• Automated administration and striking a perfect balance between tracking of awards, vesting and CFOs who are evaluating cloud value and control, for growing busi- exercising with a SaaS tool solutions, traditional outsourcing and nesses.• Set up and maintenance of the Collaborative Outsourcing should ask technology and staff training themselves: Is this task part of our Tom Mescall is Partner-in-Charge of• Periodic independent valuation of core competencies? If the answer is the Consulting practice at Armanino common stock (409A) for GAAP yes, then the company can manage the McKenna. He has over 20 years’ expe- and tax purposes task internally with the use of leading rience in public accounting, manage-• Quarterly/annual ASC 718 (FAS cloud solutions. If the answer is no, ment consulting and software develop- 123R) reporting and technical ac- the company can turn to its external ment. Tom has extensive experience counting support team of experts who will use first-rate with Enterprise Resource Planning, cloud solutions to manage the task. E-Business, Customer RelationshipThis arrangement gives the CFO ac- With Collaborative Outsourcing, the Management and organizationalcess to equity compensation expertise accounting firm implements the SaaS Change Management for technologyfrom a professional finance team and solution, trains the client, and main- companies. Contact him at tom.mes-access to the stock option data without tains the software and related data. call@amllp.com.© 2011 Armanino McKenna LLP. All Rights Reserved.