The temptation to immediately overhaul processes and systems after acquiring a company can be high. Sometimes changes need to be made quickly, but often, things have been set up a particular way for a reason. That doesn’t mean the status quo is the best way, or the right strategy long term. Patience and prudence can lead the way, making the right changes at the right time, after all the implications are assessed. Change is then a balance of speed and iteration with deliberate thoughtfulness, sometimes all at the same time.
Michael Gutfraynd, CPA’s Post
More Relevant Posts
-
Knowing your team’s capabilities is required but may not be enough. An organization can move mountains when teammates support each other. Take a 150-person professional services company, in this case an accounting firm. It’s small enough to be nimble but large enough that not everyone knows each other and what other people are capable of. How would a tax manager new to the company and working on a technical tax issue know that a colleague in another office can answer the question in a five-minute phone call instead of spending six hours researching the issue? Having connectors within the firm that know everyone’s capabilities and internally published skills matrix should get the job done. The tax manager is supported, and the firm should realize higher profitability (especially if the engagement is fixed fee). The alternative is frustration and low productivity.
To view or add a comment, sign in
-
Automation is tempting when mapping out a complex process. But it’s a terrible waste of time and resources to automate processes that very rarely happen. The ROI is negative, because the time could have been used to systematize and automate a process that happens frequently. Said another way, 5 minutes saved, 1,000 times > 8 hours saved, 1 time
To view or add a comment, sign in
-
Accounting has a reputation as basic bean counting. In reality, it can get complex fairly quickly as a company scales up with multiple entities, bank accounts, costing and technical rules for revenue recognition, M&A, and leases. In essence, it’s just like every other industry where having a specialist in the right seat makes all the difference. A great VP of Sales creates scale in a sales team so the CRO can focus on go to market strategy. A great Senior Manager makes projects run smoothly so the Partner can sell more work and spend less time reviewing it. So it is with a great Controller ensuring accurate numbers and allowing the CFO to spend more time driving financial performance. The Controller is not an uber bookkeeper, but a seasoned professional that understands how the business dynamics tie to the numbers and is an expert in presenting the financials so they are clean, clear and the underlying transactional data yields accurate results after analysis by the FP&A team.
To view or add a comment, sign in
-
It’s a short driveway from breaching the lender Credit Agreement to running the business on the bank’s behalf. Understanding what can and cannot be added back to earnings for covenants. Forecasting covenants and potential cures in case of breach. Allowable types of transactions the business can enter. What types of additional debt is and is not permitted. Small details like types of bank accounts required. What’s collateralized and if it can be sold. Triggering events to have the loan called. Reporting requirements and intervals. Insurance requirements. Distribution limitations. Interest rate intricacies. And when to get the lawyers involved to interpret various language. Ultimately, the bank needs to be repaid and it wants to lend more money. It all starts with the confidence it will get paid back and keeping up with the CA requirements goes a long way to building that confidence further.
To view or add a comment, sign in
-
The deck being used to present to the Board should use the same underlying data that is used to run each department of the company. Seems like a basic concept, but like most things, it’s all in the execution.
To view or add a comment, sign in
-
The death of a smooth ERP implementation is garbage data. Top to bottom, the information must be clean to have a chance of success. 𝐂𝐡𝐚𝐫𝐭 𝐨𝐟 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 Clean COA that has appropriate numbering system, room for growth, similar accounts grouped and summary accounts identified. Basics like showing short-term debt after accounts payable but before long-term debt are adhered to. 𝐂𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐌𝐚𝐬𝐭𝐞𝐫 Uniform naming of customers with leading zeros non-existent for customer numbers. Duplicates are eliminated and proper hierarchy assigned for multi-location customers. Payments terms are codified. Customer grouping is though through so reporting on new customers, industries, geography and relevant sale rep are easy. Custom price books are built if appropriate. Sales tax status is assigned. 𝐈𝐭𝐞𝐦 𝐌𝐚𝐬𝐭𝐞𝐫 Similar to the customer master, no duplicates and uniformity in naming and numbering, room for growth, grouping like items across various categories and going through each item to make sure it’s assigned accurately. Pricing matrices are done. Default vendors are assigned as necessary. Taxability groups are assigned. 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬 Agreement on data and fields required to record transactions. Transaction approval matrix is in effect. Ability to back date transactions is assigned by transaction type. All departments must agree on what will be reported on and the implementation team must check and double check those requirements along the way. And clean the legacy system data to make sure it’s consistent and complete, including details like getting rid of extra spaces after descriptions. Then test, test, test and ensure the processes and setup are repeatable and scalable.
To view or add a comment, sign in
-
Forecasts are wrong the moment they’re published. Publish anyway. Setting a course and getting everyone moving together is more important than getting it perfect. If the fundamentals are sound, an 80% answer today can get revised as better information becomes available.
To view or add a comment, sign in
-
Asking basic questions without fear of embarrassment is a superpower. Time and again I have witnessed simple questions get to heart of the matter. A subset of items is selling slowly, has high minimum order quantities and significant on-hand inventory aged over 1 year. Cue the fireworks. Why do we carry these items in stock? Because we’ve always done it, and our customers demand it. What would happen if we stopped carrying it? Everyone would complain! Our vendors would be angry if we were not carrying their full line and threaten to pull our distribution rights. Have we ever tried it? Like I said, it’s very risky! Can we try it? No one is going to accept it. If that were true, what would happen? Well, they would call and tell us. Would customers stop doing business with us and vendors cut us off immediately? I don’t think it would be immediate. So, what’s the actual worst-case scenario? Some customers would complain loudly, and vendors would tell us they are pulling distribution. Are our customer and vendor relationships so weak that we couldn’t manage the situation? No. What’s the best-case scenario? We get rid of excess inventory and re-invest the cash into quick turning inventory and some overdue capex. Seems like a pretty clear answer.
To view or add a comment, sign in
-
Growth funding can come from unexpected places. A few years back, a company where I led finance was planning significant staff growth. It was a bet on the future, and we were committed to the expansion and new product introduction. After sharing our plans with our service partners, one of them suggested and undertook applying for a state tax credit program to help fund the growth. Building the financial model and presenting it to the Board, I was able to rely on the tax credits to offset a portion of the significant investment the company was making with a quicker ROI.
To view or add a comment, sign in
Managing Director at D.AGK Consultancy I Corporate Finance I Operations I Business Transformation
2wChange shouldn't be a goal in itself. Change is a planned road to reach planned goal