December 11, 2019
Do You Have a ‘Swiss Army Knife’ for Specialized Accounting and HR?
Posted by Jenn McCabe
After surviving the startup phase and several years of business, it’s common for companies to have one to three accounting generalists staffing the back office, covering day-to-day tasks. But this is also when a business typically starts to have some very specialized accounting, payroll and HR requirements that their teams can’t handle.
Companies at this inflection point need skilled staff we call Swiss Army knives. But these folks are often overworked and at their limit. Worse, they may be a “single point of failure”— an employee with deep institutional knowledge who is a huge flight risk.
If you don’t have an in-house Swiss Army knife, or they are stretched too thin, you need to find a specialist. These are some common scenarios that trigger the need for specialized accounting, finance and HR support:
The financial statements are messy, or not in accordance with GAAP. When there is planned M&A activity, investors may require more professional or standardized presentation. It’s strategic, and saves money in the long run, to do this in advance of deal-making. During negotiations, sellers want to put their best foot forward and provide the buyer’s agents, or valuation specialists, with perfect financials going back several years.
There is value in having adequate support for the (haggle-free) price of a company, or for making bankers feel good about lending. It’s also hard to create a good budget when the numbers used for that plan are shaky!
A deal happens, and complexity appears. Suddenly you may need equity management expertise or a restatement of the cap table. After a purchase, there are also tricky technical accounting entries to properly state the opening balance sheet of the new or changed entity.
You must comply with new accounting standards. This may require technical restatements of prior results or a change in procedures that have been the status quo for years. For example, that is happening now because of lease accounting (ASC 842) and revenue recognition (ASC 606) rule changes.
You need complex forecasting. This is an art form that requires senior finance personnel with the experience to prepare a model of future expectations. A specialist will do a great job and do it faster.
You use numerous technologies, but none of them talk to each other. When work is being duplicated at an institutional level, it’s time to get help from an accounting technology expert. The most commonly disconnected tools? The CRM and time tracking systems. The client invoicing system and the “pipeline” need to talk to the accounting package. Similarly, if time is entered or resource planning is done outside the accounting system, the accounting/payroll team and the people delivering the work are duplicating tasks.
You’ve outgrown your accounting system but need assistance choosing and adopting new tech. It’s time to do this if any processes are manual! Automation saves everyone in the organization time.A system implementation expert can help.
HR becomes an unmanaged risk. When a team lacks labor and wage compliance know-how, it can lead to costly legal and compliance problems. Too often, HR is called in after something scary happens with personnel. This indicates it’s time to get an expert review of your HR policies.
Outsourcing Your Expertise
When your accounting and HR teams need more than just steady support, it’s time to graduate to functional, specialized expertise. If you don’t have that Swiss Army knife available in-house, outsourcing is a solution.
An outsourced expert can come in on a project basis, for as many hours as you need, with no lengthy hiring process. And if you need help in multiple areas, you can get several experts for the price of one full-time hire, or less. It’s a flexible, cost-effective option to have in your back pocket.
Jenn has more than 25 years of outsourced accounting and finance experience, with a particular expertise in startups and the advertising and creative production industries. She is passionate about seeing companies utilize the latest accounting technology to maximize their efficiency, productivity, and ultimately, success.
Before joining Armanino, Jenn founded and led Team Jenn Corp., a firm dedicated to the strategic financial management of startups and small businesses, offering a comprehensive back office solution with accounting, finance and HR solutions. Previous roles include stints at advertising giant Ogilvy and Mather, and in the cash management industry.
Jenn has a bachelor’s degree in economics from Pepperdine University and is a member of several professional associations including the National Society of Accountants, ProVisors and the Women’s Business Enterprise Network.
Co Authors :
Ryan heads the Strategy and Transformation consulting practice, providing management consulting, assessments and roadmaps for clients in all of Armanino’s business segments. He has extensive business, technology, cybersecurity and operations leadership experience in Fortune 50, mid-market and entrepreneurial environments, and has led global teams in the Americas, Asia and Europe.
He has held line leadership and consulting roles in a range of industries, including retail/consumer goods, entertainment, hospitality, technology, healthcare, biotech and financial services. His multi-functional experience includes strategy, technology, product commercialization, innovation, operations, solution delivery, process improvement and management consulting.