Financial Advisory Blog

Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

July 25, 2019

Three Ways to Fail at Change Management

Posted by Judy Clarke

Many companies have a culture of closing deals and providing great customer service. But typically, there’s zero focus on improving their own internal systems, until a process breakdown occurs. Once a company is broken, the rush is on to implement a software solution to fix all the problems. But this never works without engagement throughout the entire organization—which requires Change Management.

The majority of change initiatives fail, according to McKinsey, Bain, Gartner, Harvard Business Review and others. But leadership teams that embrace their pivotal role in operational and organizational change management do much better. Those teams, says Willis Towers Watson, are 2.5 times more likely to outperform their peers.

So, what should or shouldn’t you do? Here are three common change management mistakes we see, and how to avoid them.

Change Management

Failure Strategy #1:
Don’t involve stakeholders with the selection of a new system until the purchase has been made.
On the implementation side of our practice, the project kickoff meeting is sometimes the first time stakeholders have heard any details about the new system that was selected to solve all their problems. Not surprisingly, being kept in the dark often leads to resentment and even project sabotage. If employees refuse to engage and adopt, the chance of a successful project is compromised. It’s much harder to get stakeholders back on track once this happens. They feel left out and disrespected. 

What you SHOULD do:
We find discovery workshops with all stakeholders work well to expose all the current-state pain points and gain early buy-in. Knowledge from the day-to-day operations team members has great value and will improve the selection process. This approach will also identify “project champions” who can become power users of the new system.

Failure Strategy #2:
After the requirements meetings, don’t communicate the status of the project to all stakeholders.
  Shock the finance sponsor after the timeline slips. Surprise the area leads with an email saying they need to redo all the data conversion next week, every evening after 5pm.

What you SHOULD do:  
A weekly project newsletter is an excellent communication tool to keep the entire team up to date. There can be links to training sessions, upcoming timelines, accomplishments, staff recognition, etc. The regular cadence will reduce fear and doubt and show the team the project is moving forward.

Regular team check-in meetings are also helpful.  We recommend surveying users just after key milestones to gauge user sentiment and get valuable feedback on what is working and what needs improvement. To track trends, have some control questions that you repeat in every survey, such as “Will the change have a positive impact on the company?” 

Failure Strategy #3:
Require all area leads to train their team members, with no support.
Don’t give the leads any help preparing materials, or even determine whether they have training skills.

What you SHOULD do:  
Okay, this is a hot button for me. The “train the trainer” approach is a means to lower a services estimate, and it seldom succeeds. The expectation that a key employee can fully participate in a major project, continue their day job and prepare comprehensive training materials is not realistic. Add in the fact that most people do not have training skills, and it becomes ridiculous. 

We have seen this approach work if time is added to the project for us to help the appointed trainers prepare their materials and hold practice training sessions. A culture of trust must exist so that leads feel comfortable asking for a consultant to train with them if they feel overwhelmed. 

More to Come

There are many more ways to fail—or alternatively, to succeed—at managing change. I will share three more in my next post. Change management is my passion, so feel free to reach out with any questions or suggestions!


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December 2, 2017

Part 2 Blockchain & Cryptocurrencies: 4 Ways It Will Change How We Do Business

Posted by Andries Verschelden

Blockchain and Cryptocurrencies 1Cryptocurrencies and blockchain have emerged as an exciting alternative to regular money. (We covered the basics here if you need a refresher.) But, this technology could be much more than an alternative currency. It also has the potential to revolutionize the way we do business. Here are four areas where we may see big changes in the near future.

  1. Transfer of information

Blockchain uses a shared, decentralized ledger stored on a number of nodes (computers). This shared ledger makes it much easier to transfer not just funds, but also private information between users. Take your medical records, for example. If medical records were stored on a decentralized database, all different medical professionals, regardless of their organization, could update your medical file.  Since the information is encrypted, it would remain private even as it’s updated by different medical providers. Compare that to now, where hospitals have different databases and even store information on paper files.

  1. Supply chain tracking

Blockchain could also improve supply chain management. All parts of a transaction, from start to finish, could be recorded and easily reviewed if there’s a problem. For example, imagine that Walmart sells some contaminated pork. Their supply chain has multiple layers, with potentially dozens of companies in each part of the process, and may reach to another country. A pig might be raised outside Shanghai, processed at a plant in Hong Kong, shipped to California, then trucked to a U.S. store.

Under the current system, Walmart must work backwards, through the records of each company in the supply chain, to find the source of the outbreak. If one part of the chain has faulty records, Walmart may never identify the source of the problem. On the other hand, if everything was recorded on a decentralized blockchain, Walmart could immediately review the history and know that it is uncompromised. Each time the pork went through part of the supply chain, it would be recorded on the public ledger. Walmart could quickly review the blockchain to see exactly where the contaminated pork originated and remove the faulty supplier.

  1. Accounting

Maintaining accounting records on a decentralized blockchain could speed up the financial reporting process and reduce errors. Under the current system, every time companies record a transaction, such as an inventory purchase, all subledgers of the parties involved need to update their individual accounts on their accounting system. Internally we can reconcile subledgers to ensure the transaction is properly recorded, and externally we can also verify the information is accurate and reliable (the auditor).

If we could have the different parties involved work off the same decentralized database, we would be able to ensure a transaction is recorded correctly throughout the ecosystem without needing reconciliation or external validation. Transactions would automatically balance out through the code in the blockchain, and there would be virtually no chance of error in recording the transaction.

  1. Smart contracts

In our current electronic payments system, if you fill an order, you need the help of a trusted third party to ensure you will receive your funds. Even if the purchaser pays by credit card or direct deposit, there still needs to be a third party to process the transaction, which slows things down and adds an extra cost. With cryptocurrency and blockchain, you can set up a smart contract, where payment goes out immediately once the customer receives your goods (assuming this can be validated electronically).

Watch for more uses

When the internet was introduced, it took years before it became a common part of doing business. It’s quite possible that we’re at the same point with cryptocurrencies and blockchain today. Watch out for these potential applications―and more―as the world gets better at using this exciting new technology.

Find more helpful insights from Armanino’s Outsourced Finance & Accounting team.


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November 18, 2014

FASB and SEC Issue Changes for Pushdown Accounting

Posted by Armanino Financial Advisory Team

The Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) has issued a standard allowing an acquired entity to elect pushdown accounting whenever there is a change of control. The SEC simultaneously rescinded its guidance that allowed pushdown accounting in certain circumstances, forbade it in certain circumstances, and required it in others. Public companies will now follow the FASB standard, which makes it an election.

For full details, check out Accounting Today’s full explanation.


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November 18, 2019

Optimizing your Adaptive Insights Model

Posted by Bryan Rogers

Typically, a client experiences enough headaches with spreadsheets that triggers a need for something more robust and collaborative.  A new Adaptive Insights client either addresses a single pain point or does a complete implementation all at once.  The planning process becomes transformed and the team works more collaboratively, spending less time with data manipulation and more time with critical analysis and decision support.  But what happens after a few years pass and the business objectives change, FP&A personnel change, management changes or there are acquisitions or divestitures?  How does your Adaptive Insights model change with you?

co workers strategizing on a plan

First off, there are 5 questions you need to ask as you consider a model redesign:

  1. Are you able to respond to management quickly for decision support?  If the C-Suite needs to make business decisions quickly, are you able to make a few adjustments to your model and offer an alternative forecast with impacts to the income statement, balance sheet and cash flow without much delay?  If not, it may be time to consider a model redesign or model enhancement.
  2. How often are your users in Adaptive Insights?  Adaptive Insights is like exercise equipment for your business.  If you use it for its intended purpose very frequently, you will have great results.  If you and your team use it quarterly for some basic budgeting and reporting, you are not getting the true value from your purchase.  You can buy a great treadmill for your exercise room, but if you use it only 4 times a year, you will not see any results.  You need to eliminate spreadsheets that supplement your planning process and get your users in the solution frequently to perform their planning and reporting tasks.
  3. What is the user experience like?  Make sure you have a good understanding of your user experience for your budget owners.  Is the current process cumbersome?  Is all the data you need readily available in the system or do users need to go outside the system?  Are the sheets set up in such a way that only users see what they need to see and can’t see those areas outside of their own?  If you are having trouble with user adoption, it might be that your model has become too cumbersome, too many versions, organizational levels that no longer apply or critical data that is not easily integrated and accessible in the system.
  4. Have you created quick wins for your users?  After you have a good understanding of 1-3, you need to figure out how to address the issues.  Is it a data issue?  Consider an automated integration from your key data sources with audit checks.  Let the system do the work and let your team do the analysis.  Is reporting and dissemination of information a problem?  Have you developed business unit specific dashboards, HTML reports and OfficeConnect reports that provide quick insight to key business trends?  Listen carefully to your users and find a way to address their pain points.  Build momentum with quick wins and focus on saving them time in their day.   
  5. Are you prepared for the future – Change is constant in your business environment.  Is your model designed to change as your business changes?


Adaptive Insights is a best in class, corporate performance management solution, that is designed to optimize your planning, forecasting and reporting processes.  The best Adaptive Insights’ models are the ones where the client has carefully listened to the user community and designed the model for flexibility, efficiency and excellent decision support to the management team.  The objective is to make Adaptive Insights address your business needs for planning and reporting, not duplicate an ERP structure or a spreadsheet design.

Armanino helps clients navigate digital transformation and achieve their end goals using a combination of next-generation technologies and expert change management strategiesContact us to learn more.  


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November 13, 2019

Professional Services Firms: 8 Accounting Pain Points You Must Avoid

Posted by Armanino Financial Advisory Team

Computer with icon cloud solutions.

Professional services firms provide their clients with the convenience of outsourced workflows and the clarity of expert insights. So it’s somewhat ironic that the internal operations at many firms are anything but efficient and insightful. Too often, organizations that excel at what they do for others struggle to do the same for themselves, particularly when it comes to finance and accounting.

This is, in part, a consequence of ambition. Firms that are eager to hit the ground running set up rudimentary accounting processes to start – the kind of introductory system that all new businesses need. However, as they grow, the same methods that once seemed adequate quickly become an obstacle at best and a liability at worst.

Most troubling, firms may be suffering from bad accounting without realizing the full extent of the problem. It’s easy to commit to the status quo, especially when it’s been in place since day one. Without another example for comparison, finance teams can start to accept that inefficiency, uncertainty and lack of functionality are par for the course. But they’re not, especially at the most successful firms.

Resolving these issues starts by acknowledging where and why they exist. Watch out for these common (but preventable) accounting pain points that could be holding your firm back:

  • Lack of automation – Ubiquitous accounting tools like Excel lack sophisticated automation, forcing the accounting team to invest significant amounts of time and resources into data-heavy workflows like reporting and consolidations.
  • Underwhelming accounting software – A products like Quickbooks is fine for small firms just starting out, but the software’s linear configuration doesn’t allow for the dimensional, detailed accounting that established firms need to sustain their growth.
  • Overwhelming manual inputs – Manipulating data by hand wastes time and creates the risk of human errors, which both contribute to the problem of missed deadlines and untrustworthy insights leading to disorganized decision making.
  • Unmanageable data – Growing firms want and need to leverage ever-expanding amounts of data, yet turning that data into value proves challenging when accounting tools can’t scale and do little to expedite data management.
  • Inconsistent cybersecurity – Service providers who work closely with clients’ data must make an intense effort to secure that data, but keeping it in outdated or underwhelming systems creates more risks than it resolves.
  • Liability from BYOD – Smart devices that are widely considered to be essential for work also raise concerns about cybersecurity and regulatory compliance, meaning that a critical tool is also a constant source of risk.
  • Ongoing integration issues – Legacy accounting systems can be difficult (or impossible) to integrate with new technologies firms introduce, creating a problematic gap between the firm’s finances and the rest of their operation.
  • Unreliable compliance management – Compliance is becoming more complex and costly all the time, and those changes are difficult to keep up with using older systems that are not built to be agile or in-depth.

By recognizing and addressing these hurdles, you can help ensure that your firm has the finance infrastructure it needs for its long-term success.

If these challenges sound familiar, Armanino can help. We offer a comprehensive solution including outsourced accounting workflows, expert advisory services and best-in-class software. Contact us to discuss how we can work with you to address your own pain points.


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November 11, 2019

John Stewart to lead Armanino’s Strategy and Transformation practice

Posted by Armanino Financial Advisory Team

Armanino is proud to welcome John Stewart as Managing Director to lead Armanino’s Strategy and Transformation practice, providing management consulting and advisory for clients in all of Armanino’s business segments. Prior to joining the firm, Stewart led his own company, Arctos Ventures, a premier business strategy & innovation consultancy. Stewart worked with Fortune 50 enterprises and startups to design and launch new concepts and initiatives, advising on business operations design, product development, new venture launch & scaling, and overall business strategy.

Stewart has served across a range of industries, including entertainment, technology, retail/consumer goods, non-profit, manufacturing and distribution, and financial services. He also held executive positions at OnPrem Solution Partners, 20th Century Fox, and NBCUniversal.  He has shown excellence and success in mentoring & advising technology startups.

Stewart is certified in Design Thinking, Agile Delivery and Lean Six Sigma. He holds an MBA from the University of Southern California and a B.S. in Engineering from the Pennsylvania State University.

His other areas of expertise include:

  • Strategy, transformation and technology consulting
  • Business operations design
  • New venture design & launch
  • Process improvement & automation
  • Change management
  • Leadership development
  • Product development and innovation
  • Project and program management

We are excited to have Stewart on board in our Strategy and Transformation practice and believe his expertise, along with Armanino’s team of MBAs and industry experts, will continue to help our clients grow and succeed. To learn more about our Strategy and Transformation solutions, visit:


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November 6, 2019

How the CCPA Impacts the Handling of Children’s Data

Posted by Pippa Akem

Childrens Data Privacy CCPA

The CCPA impacts the handling of children’s data and a lot is going to change when the California Consumer Privacy Act (CCPA) takes effect on January 1, 2020. If your organization does not have a policy already in place for the handling of children’s data, it’s time to consider the issues raised in this post and decide whether you need one. 

The CCPA carries steep penalties for companies who overlook or fail to honor the new consumer rights that give consumers more control over their data. It reinforces the need for greater data protections when dealing with the personal information of children, who, unlike other consumers, don’t readily comprehend the gravity of their online activities.

What Are the CCPA Consumer Rights?

 The CCPA provides four basic rights to consumers:

  • Right to know:  Consumers have the option to find out what personal information a business has about them, the source of this information, whether it has been disclosed or sold, and who the recipients are.
  • Right to opt out: Consumers are given the choice to refuse the sale of their personal information to third parties.  Stringent consent rules extend to protect children’s personal data and to be included in an incentive program.
  • Right to delete: Consumers can request that a business delete the personal information it has about them. There are exceptions.
  • Right to equal service: Consumers cannot be discriminated against for exercising their rights.  They should receive similar services after they exercise any of the rights.

Implications for Children’s Information

A noticeable change, come January 1, 2020, is that the regular opt-out process won’t apply to children under 16.  Companies must collect the consent of children under 16 to sell their personal information. And for children under 13, a parent or guardian will need to consent to the sale of information. In practice, this means companies cannot sell the consumer data of children under 16 unless they opt in.  The regulations clarify that the consent rules apply in addition to any other consents under the US Children’s Online Privacy Protection Act (COPPA).

The broad definition of personal information under the CCPA poses some challenges to companies.    The law defines personal information to include the collection of IP addresses, purchasing or browsing histories, geolocation data, consumption behaviors, psychological profiles, and consumer preferences.  This definition holds broad implications for the collection of children’s data on popular devices and platforms likely to attract children, and more.  

Companies subject to the CCPA can’t disregard the consumer’s age and claim they didn’t know they were dealing with a child’s data. Although the law as drafted requires companies to acquire actual knowledge of a consumer’s age to mitigate the risk of selling the personal information of minors, a business that  willfully disregards the consumer’s age has actual knowledge of the consumer’s age under the law. The regulations are requiring businesses with actual knowledge that they collect or maintain children’s data to implement specific processes to obtain the appropriate consent and disclosed that in the privacy policy. Consequently, companies will need to ask consumers who live in California about their age in order to comply with the children’s consent provision.

What should you do?

One of the first important steps is to create an inventory of all the personal data processing activities at your organization. Some companies choose to filter out the personal information of children under 16 and establish stringent controls for handling that particular data.  

The CCPA holds businesses responsible for taking affirmative steps to verify the age of the consumer whose data is being collected/sold. Studies show that the number of U.S. children who have an online footprint is increasing. With this trend, there is a clear need to protect the privacy of children and to protect your organization from  failing to comply with the new privacy requirements.

For more information on Armanino’s data privacy solutions visit Risk Assurance & Advisory Privacy Services.


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October 25, 2019

What AB 5 Means for Worker Classification

Posted by Jenn McCabe

worker classification

A new California law just reignited the freelancer (independent contractor) versus employee discussion. Other states are expected to follow suit. So if you thought you had your worker classification thing figured out, you might need to think again.

California’s governor signed Assembly Bill 5 (AB 5) on Sept. 10, 2019.  It addresses worker classifications and brings the discussion into the legislative forum, along with new complexities, industry exemptions and deadline extensions. (For more details on AB 5, see our FAQ sheet.)

Technically, the new law goes into effect on January 1, 2020.  However, this is just the most recent, and most formal, action in a 10-year-long policy shift.  It follows the California Supreme Court’s April 2018 Dynamex ruling, which made their definition of “employment” crystal clear.  (See Dynamex Operations West, Inc. v. Superior Court, __ Cal.5th __, 2018 WL 1999120).  That ruling established a three-part “ABC test” to determine worker classification in the state.  

The rules are clearer now than before (yay).  There is virtually no grey area or weighting of factors regarding “degree of control” exercised over the worker (bummer).  Note that the federal standards are still a bit hazy and allow for more interpretation of control.

But beware: Regulatory agencies have been applying the concept of the ABC test to determine worker classification for a while now, and in some cases, auditors apply rigorous testing to up to three years of previous information. We are finding it’s less expensive to comply than to look for wiggle room.  Audits cost money and time even if you can avoid most penalties and interest.

Keep in mind that these rulings are ultimately meant to protect workers.  Even if you consider yourself a “good” employer, the rules apply because the state wants you to employ more workers unless there is ample proof they take care of themselves.  It’s not just about tax revenues, though it surely helps them control the process when taxes are withheld and paid by an employer.

Applying the ABC Test

The ABC test is complicated, so we created a decision tree to help employers classify a worker quickly.  Basically, everyone should be considered an employee unless they specifically fit into an exempt category or unless the employer can rebut this premise using all three critical factors below:

  1. If this worker owns and independently operate a trade of their own, they should easily prove it by providing a federal ID number, a business license, professional insurance, or some sort of professional license number.  They should look and act like a business ownerThis is factor C, but we put it first in our decision tree. 
  2. The work being performed should be outside the normal course of business and service provided by the hiring entity. (See the exemption discussion below.) This is Factor B, which we also put second.
  3. If the worker is directed, doesn’t have a direct financial relationship with the client, is told where, when or how to do the work,  put them on payroll.  This is a degree of control judgement call.  We put this third on the decision tree.  If you get this far, it’s the trickiest and most likely to result in a discussion and weighted factors. 


There are exemptions to the ABC test.  We are watching the politics here carefully because we expect this to continue to evolve.  There is a pattern (if you ignore the newspaper delivery exemption).  Professional organizations who license and regulate their subscriber base have been successful in getting exemptions for their constituency.

Veterinarians, CPAs, doctors and lawyers are examples of exempt categories. All those folks have licenses and carry professional insurance.  But this is not an automatic pass — they still need to behave like independent business owners and provide evidence that they do so.

We’ll keep you posted as this continues to play out.

Not confident that you’ve got your worker classification process nailed?  Feel free to call our HR experts for help, even if you are not a California employer. We can evaluate your risk, suggest remedies, and implement workflow changes to reroute payments to payroll before they are incorrectly processed as a vendor payment.


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