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!

March 30, 2020

Reforecasting for Sudden Changes Using Adaptive Insights

Posted by Reena Driver

During these unpredictable times, you might have to switch around your normal processes. We’ve been hearing from our clients about the need to do quick forecasts in Adaptive Insights. Here are some step-by-step instructions with screen shots to show you reforecasting for Sudden Changes for your business.

  1. Roll Out a Live Forecast Version
    • Confirm you are copying from the correct Original Budget Version.
    • Select the boxes for: Copy All Data, Copy Formulas, Copy Splits, Copy Modeled Rows and Copy Audit Trail History.
    • Update the Start of Plan setting to pull in Actuals through the prior month.
    • Review the user access settings.
      • Does this version need to be hidden for certain users?
Reforecasting for Sudden Changes Using Adaptive Insights
  • Update Input Sheets
    • Review and update the Personnel Sheet for Headcount impact and updates to Personnel Assumptions (i.e. merit and bonus attainment assumptions).
Update Input Sheets
Reforecasting for Sudden Changes Using Adaptive Insights
  • Review marketing, conference and event budgets — looking at the impact of cancelled events and tradeshows as it relates to both Revenue Pipeline and Operating Expenses.
  • High-Level Adjustments: set up custom or assumption accounts to hold management increase/decrease % adjustments to incorporate into current modeled or cube formulas.
High-Level Adjustments
  • Review Impact of New Forecast Version.
Review Impact of New Forecast Version.
  • Utilize Weekly Forecasting
    • Always keep Live Forecast open as working forecast.
    • At the start of each week, clone this version and rename the previous Live Forecast to [Date] – Flash and name the new version Live Forecast.
Review Impact of New Forecast Version.

Have questions or need some help? Don’t hesitate to reach out to our experts. For more information on how to keep your business running through disruption, visit our COVID-19 Resource Center.

May 28, 2019

Equity Management Experts Demystify Complex Accounting & Administrative Issues

Posted by Scott Schwartz


With evermore complex equity instruments in use today, compliant and accurate equity management processes are difficult to create and maintain. Armanino’s experts have been invited to various equity events and conferences over the coming months to share their knowledge.

San Diego NASPP: Chapter Meeting, May 28th, 2019

Key Issues Surrounding Accounting for Performance Grants

Scott and Armanino Senior Manager Laura Verri will be delving into detail about performance grants, which have become popular as a method for companies to align individual interests with company goals. Scott and Laura will describe the key mistakes to avoid when rolling out performance awards, demonstrate how to optimize your processes, and show what to look for when evaluating the specific valuation and expense issues related to performance awards. Finally, they will discuss how to deal with any changes/modifications made during performance periods.

27th Annual NASPP Conference, September 16th – 18th, 2019

Scott and Laura are also teaming up for two presentations at the annual NASPP Conference.

Making Your Equity Plan Audit-Ready -25 Minute Arena Session

The first presentation features our client Amy Ruschell, the Director of Accounting Operations at Five9.  Amy, Laura, and Scott will walk attendees through how accounting and administration can partner together, so they can focus on what matters and stay audit-ready throughout the year.

Top 5 Gotchas for Stock-Based Expense Errors – 60 Minute Panel

Lydia Terrill, Global Equity Manager at Vocera Communications and client of the firm, is teaming up with Scott and Laura for the second presentation. Together, they will provide an interactive session focused on the accounting for stock-based compensation from both the client’s and Armanino’s perspectives. The session will focus on practical and tactical solutions that clients can utilize regardless of the software platform they use.

More details on this conference can be found here:

Click here to register

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.

March 24, 2017

409A Valuations & Equity Management: The Need for Forward Thinking

Posted by Armanino Financial Advisory Team

409A ValuationsThe process of developing a business to ultimate enterprise success includes anticipating and avoiding potential future road blocks through the development of high quality, supportable and defensible procedures as early in the business life cycle as possible. One critical factor in developing such a process for ultimate business success―whether defined by efficient audits, or, even better, a highly successful sale or IPO scenario―is completing quality 409A valuations and managing equity accounting with proven partners in the field.

As with any other component of the financial management process, 409A valuations and equity management require a great deal of attention to detail and proven effective judgement. In order to avoid problems when you least want them―such as when going through an audit, securing equity financing, or nearing public or private liquidity events―a successful approach will include utilizing the expertise of specialists in their respective fields in order to avoid common pitfalls. Various pitfalls due to a lack of quality valuation and equity management processes include expensive and time-consuming restating of financial statements, inefficient use of resources, and the potential impact on timing and pricing of equity transactions.

Here are some ways improperly handled valuation and equity accounting can impact you and your firm:

  1. Tax cost for you/your firm’s employees. If improperly priced options are issued, it may result in a future tax liability for employees who receive equity compensation. A lack of sound valuation and accounting can result in potentially large unexpected tax bills for employees who were granted options at below market value. Depending on the size of the mispricing, these tax bills can be significant to recipients.
  2. Potential acquisition red flags. In the acquisition process, acquiring parties will be on the lookout for items that could create unexpected costs and/or tax liabilities. A lack of sound valuation and equity accounting can create both real expenses in the due diligence process and perceptions of potential red flags as the acquirer considers the terms of its offer. When a potential sale is on the table, equity valuation and accounting red flags can result in significant costs and delays, as well as affecting bids that acquirers may make.
  3. IPO delays and/or missed windows. When a company nears a potential IPO and begins issuing public financial statements, the level of review increases substantially, both in terms of oversight via audit partners and the U.S. Securities and Exchange Commission (SEC). Improper valuations and poor equity management practices in the years preceding an IPO can result in costly, and sometimes fatal, delays in the IPO process.

When the time comes to potentially secure a sale or IPO liquidity event for the company you have devoted your time, energy and effort into building, it should be an extremely exciting period for you both professionally and personally. However, not having your valuation and equity management “ducks in a row” can cause unnecessary challenges for potential investors and/or acquirers, as well as auditors. At such times, when your company most needs you to be a strategic visionary, the last thing you want is to be stuck cleaning up unnecessary accounting issues that may have been avoided with proper planning and forward-looking resource allocation in earlier stages.

While there may be certain shortcuts that can be taken along the way in these areas, failing to think strategically and with a long-term vision, and not accessing expert resources at early stages, can create eventual real costs, resource bottlenecks and unnecessary delays, and may result in arduous review and cleanup work when you would least like to be dealing with such challenges.

Instead of putting off “the process” until later stages, it is a sound strategic investment to look ahead and engage quality professional advisory and value-added services early on. Such expertise can assist you in developing a sound process that can help you and your business navigate effectively and efficiently to and through a successful, rewarding and exciting liquidity event.

Forward thinking early on often makes a big difference.

Contact the Armanino CFO Advisory team to discuss 409A valuations and equity management options.

November 11, 2014

Six Benefits of Outsourced Equity Management

Posted by Armanino Financial Advisory Team

There are many good reasons for outsourced equity management. Here are the top six ways outsourcing can benefit your organization.

  1. Tax-Related Expertise: As exciting as tax law is, the depth of the subject can be a bit daunting. By outsourcing the management of your organization’s equity issuances, you can depend on a specialist to focus on the nuances and proper treatment of your tax reporting. This will help ensure your company files in a timely and accurate manner.
  2. Accurate Expense: A transition from manual expense calculations to a system-based calculation will often lead to the discovery of inaccurate historical expense. The process of converting to systematic stock-based compensation expense reporting provides you the opportunity to not only mirror historical data and assumptions, but more importantly, also allows you to reassess past expenses and make corrections. This leads to the third benefit – a new perspective.
  3. New Perspective: A common accounting mistake is depending on previously established processes to calculate/assess current expense. Things change from year to year, and so must the valuation of equity. Allowing a fresh pair of eyes to review, value and calculate expense will help keep details up to date.
  4. Time Management: Utilizing a specialist allows your organization to focus on more pressing day-to-day operations. Third-party management teams tend to invest more in research and methodology development to enhance services, so your organization reaps these benefits without spending time or money on additional research and education.
  5. Cost Efficiency: Though there are initial costs with outsourcing equity management, the financial benefits of outsourcing are proven quickly. You save tremendous resources by eliminating the need to train internal staff on management systems and negating the need to keep up with the constant changes in tax treatment.
  6. Peace of Mind: Outsourcing provides the comfort of knowing that all equity-related work will be done on time and accurately. Investing in outsourced equity management to improve operational efficiency helps avoid unnecessary expenses and fines associated with missed reporting deadlines.

Check out Armanino’s equity management solutions including EASi, a cloud equity administration solution.

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?

Two people working on a strategy 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.  

November 11, 2019

John Stewart to lead Armanino’s Strategy and Transformation practice

Posted by Armanino Financial Advisory Team

Two Businessmen Shaking Hands
Two Businessmen Shaking Hands — Image by © Randy Faris/Corbis

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. Click here to learn more about our Strategy and Transformation solutions.

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