August 27, 2014
Making Equity Software Work for Any Situation
Posted by Niki Rahimi
There are many equity management software options currently available to help manage your equity plan. All of these options come with similar basic functionality but each come with unique features. Unless you are going to run with a custom made software program, limitations are to be expected.
A good first step when making a decision as to which equity software option to pick, is thinking simple and focusing on the best return on investment for most of your needs. Take the time up front to research and understand not only the financial aspect but the time aspect. For example, how long will it take to train your internal staff to use this software? Usually the more custom the option, the more time and money spent to maintain.
Finding software that fits your most essential needs but has one or two limitations should not be a deal breaker. If you have a good relationship with the vendor and find they are responsive and able to accommodate most of your needs, you are in a good place.
Always keep in mind that translating accounting/financial language into software is challenging. The logic and various outcomes/scenarios that need to be covered and tested are an enormous task. Generally, when it comes to software, the more complex, the higher the chance of bugs/issues. The software should have a feature that covers the majority of scenarios when you have an oddball situation that covers less than 1% of shares, you may run into some software limitations.
If you do encounter an oddball scenario ask yourself:
- What’s the best approach?
- Do we have a viable workaround that doesn’t take up too much of our time and resources?
- What would it cost us to move to another option that can deal with this unique situation vs sticking with the original and having a workaround?
This scenario should remind you to really get to know your plan and ask many questions of vendors before making a commitment. Always keep in mind there are no perfect solutions. When you hit software hurdles, know that it is not the end of the road. We often see clients wavering between equity software options, giving up too quickly on one before giving it a chance. These sorts of decisions are costly and end up keeping accounting staff on archaic and time-intensive spreadsheets. Be savvy, take control of your solutions, and make the software work for you.
Discover more about equity management software options and making your equity software work for your team.
Niki is a top Equity Management professional at Armanino. She has experience with financial analysis and reporting alongside a deep technical knowledge of the intricacies of equity accounting.