Building Success on a Foundation of Finance

Building Success on a Foundation of Finance

Accounting 101

Building Success on a Foundation of Finance

By Paul Johnson

What is the secret of successful businesses? The answer is elusive, but you could argue that it’s a strong financial foundation. No business is immune to disruption or perfect at predicting what comes next. But as long as they have their finances in order they can survive the unexpected and keep growth trending upward.

The next question to answer is how do you build a financial foundation? It looks different at every company, but it should include these essential qualities and capabilities:

Fast and Efficient Financial Workflows

The amount of time it takes to close the books or produce reports has a huge impact on performance. When finance is slow and inefficient it forces decision makers to wait to act or to move forward without a clear financial perspective. When finance is fast, the situation is exactly opposite. These companies spend far less resources on the nuts and bolts of accounting. Instead, they work on utilizing accounting to drive revenue, cut costs, or sustain growth.

Rigorous and Transparent Internal Controls

Finance is both complicated and consequential. When companies lack internal controls to monitor and govern their financial processes, those processes inevitably produce issues. Internal controls let companies manage everything from data access to transaction approvals. Essentially, they give companies a way to standardize finance from the top down, ensuring it operates as effectively as possible.

Alert and Available Financial Staff

Modern accountants still spend huge amounts of time manually entering data and cross-checking figures. It’s a dull process that is prone to error. Worse, it wastes the time and talent of financial professionals who could be extremely valuable working on other projects. A strong financial foundation automates and innovates the heavy-lifting of accounting so that financial staff can focus on more productive things.

Intuitive and Integrated Accounting Software

Older accounting software offers limited capabilities and outdated interfaces. What little value it still has declines further every year. Modern accounting software, by contrast, makes it easy to organize and analyze data to produce in-depth financial insights. It’s also a lot easier to use thanks to the cloud, automation, and a series of user-friendly menus and tools. Technology and finance are now inextricably linked, and best-in-class accounting software is basically a prerequisite for a stable financial foundation.

Once these four pieces are in place finance is positioned to fire on all cylinders. At that point accounting is an asset and not just an administrative obligation.

Sage Intacct is a next-generation financial management solution that transforms accounting departments top to bottom. If you’re ready to upgrade and enhance finance for years to come, contact Altasphere Consulting for a consultation.

Five Ways to Get Audit-Ready Rapidly

Five Ways to Get Audit-Ready Rapidly


Five Ways to Get Audit-Ready Rapidly

By Paul Johnson

Audits are a fact of life, even for companies not strictly required to perform them. A careful review of finances reveals if and when mistakes have been made. Conversely, it reveals when and where opportunities or obstacles may lie. Every company benefits from taking a deep look at the books, but that doesn’t mean it’s easy.

Accountants have to gather, organize, and analyze months or years worth of financial data. Each step in the process takes time and creates the risk of error, which can both lead to big penalties if the audit is legally required. And even when the process goes perfectly, completing an audit is a huge distraction and disruption. Companies want and need to perform audits, but for understandable reasons they tend to dread and avoid them.

If your company fits in this category, it’s time to embrace a different approach. Here are five ways to improve and expedite every part of the audit:

  • Revenue Recognition – Auditing revenue accounting requires a clear paper trail through a complex network of transactions and payment schedules. Variances in GAAP-accounting practices make things even trickier. Working with an automated accounting system set up specifically for complicated revenue recognition ensures that the details shine though the complexity.
  • Accounts Receivable – An audit of accounts receivable must include allowances for uncollected accounts. It also has to recognize when a payment covers multiple accounting periods. An accounting tool that applies cash receipts to client invoices automatically creates clarity instead of confusion.
  • Consolidation – Consolidations often involve immense amounts of data organized into a dense series of spreadsheets. This approach makes spreadsheet errors inevitable while making it almost impossible for auditors to find clear connections. When the consolidation process is automated instead it produces organized reports that lead auditors into the root data.
  • Pace – Audits are expensive, time-sensitive, and distracting, creating a powerful incentive to finish them fast. A well-organized accounting system accelerates any kind of audit. And if it lets you create sub-ledgers for something like receivables, auditors can start on that section of the books before you complete the final close.
  • Presentation – Improving your audit is about making things easier for both your accountants and your auditor. The more errors and inconsistencies your data contains the more time auditors have to invest double-checking your figures. The same thing happens when data is disorganized. A system that makes things easier for you ideally does the same for your auditor.

Imagine if auditing was easy, automatic, and almost instantaneous. You could comply with lawyers or regulators without stress or anxiety. You could also investigate your data for financial insights on demand.

All of that is possible when you utilize Sage Intacct for auditing specifically and financial management generally. If your next audit is approaching, contact Atlasphere Consulting soon.

The Economics of Cloud ERP Software — What You Need to Know

The Economics of Cloud ERP Software — What You Need to Know


The Economics of Cloud ERP Software—What You Need to Know

By Paul Johnson

Know Your Options: Understanding The Economics of Cloud Financial Software

For growing businesses on a budget, the cloud is the place to be for ERP and financial management software. Faster deployment, greater ROI, better security and flexibility, lower maintenance costs—the benefits are nearly limitless. When researching your options, though, it’s helpful to understand the different types of software deployment models, e.g., cloud or on-premises, and the relative costs and benefits of each.

a concept of a man interacting with cloud software, looking at a computer with data rendering

The ABCs of software deployment

Software deployment models have evolved over the years. A whitepaper by Vital Analysis explores this evolution. First came on-premises solutions, where a company hosts the vendor application on its own hardware. Additional investments such as database software, backup and recovery tools, reporting tools, and systems management software are required to make it work. All these take significant upfront costs as well as ongoing maintenance and licensing dollars. Installing upgrades or releases is often a lengthy process of trial and error.

Several on-premises vendors later offered “hosted” versions of their products, in which the software resides on the vendor’s or a third-party’s cloud server. These are offered on a Software-as-a-Service (SaaS) basis through monthly subscriptions, eliminating the need for upfront license costs and maintenance support fees. These solutions are considered “single tenant,” which means each customer has their own version of the software as well their own databases. Thus, companies are still on the hook for software maintenance and upgrades. Costs associated with these upgrades are often as high as their on-premises siblings.

Private cloud deployments are essentially an on-premises solution that is configured to operate as though it were on the cloud, giving customers an online experience while retaining ownership of the computing hardware and licensing the needed systems software. Costs are similar to on-premises solutions, since the customer owns and maintains virtually the same solution in either environment.

The pluses of multi-tenant SaaS deployments

Multi-tenant SaaS deployments are fundamentally different than these other options. They were built from the ground up to be run in the cloud, and they’re multi-tenant, which means all customers simultaneously share a single copy of the software. Each customer’s data is logically separated from the others’, yet they all can live on a single physical database.

As with single-tenant SaaS deployments, users of multi-tenant solutions don’t have to make large, upfront capital expenditures or invest in expensive IT infrastructure. With multi-tenant solutions, however, the vendor—not the customer—is responsible for updating and upgrading the system.
According to Vital Analysis, “this is a significant point because the labor cost to maintain application software is often the single largest cost component of on-premises solutions. In a study completed by TechVentive involving users of multi-tenant application software, customers reported saving between 40-60% by using multi-tenant solutions instead of on-premises applications.”

a man working on his laptop at a high rise window overlooking a city

Following the money

Vital Analysis found that multi-tenant software vendors spend money quite differently than other vendors. For example, they spend only 10% of total expenditures on cloud data center costs. These include hardware depreciation, backup and recovery software, labor costs to operate the cloud center, security systems, and—most importantly—the labor to apply maintenance patches, upgrades, and updates for their customers.

Because multi-tenant vendors operate on a single technology stack and all customers are on one version of the software, maintenance is one and done. The vendor spends less on maintenance, customer support, and other related deployment costs. On-premises vendors, on the other hand, must support multiple code stacks/computing environments, which causes deployment costs to skyrocket.

Overall, Vital Analysis concluded that multi-tenant SaaS vendors offer significant advantages, including:

  • Greater research and development (R&D) spend efficiency.
  • More frequent functional improvements to the product.
  • Lower support costs for the vendor and the customer.
  • Lower cost testing and debugging environment for the vendor and customer.

Ready to explore the economic and operational benefits of cloud-based financial management/ERP software for your business? Contact Atlasphere Consulting today.

Looking into cloud ERP or financial management software like Sage Intact? Make your best business case with this three-step process.

Looking into cloud ERP or financial management software like Sage Intact? Make your best business case with this three-step process.


Looking into cloud ERP or financial management software like Sage Intact? Make your best business case with this three-step process.

By Paul Johnson

The cloud is a highly popular platform for hosting critical business applications such as ERP and financial management. One survey predicts that 83% of enterprise workloads will be in the cloud by 2020. And there’s good reason for that. Software-as-a-Service (SaaS) applications can be deployed more quickly, cost less, can be accessed anywhere/anytime, and have the flexibility to adjust to changing business requirements.

two business partners working on Cloud ERP at a desk on their computer

However wonderful these benefits sound in theory, the hard reality is that companies must build a business case for significant technology investments. Nucleus Research developed a three-step methodology to help organizations do just that—so they can realize the benefits of cloud financial management sooner rather than later:

1. Identify the top areas of benefit

The most successful business cases are built on only two or three major benefits, while most “bad” ones have five or more. The following five factors can be used to rank your expected benefits on their ROI potential:

  • Breadth
  • Repeatability
  • Risk
  • Collaboration
  • Knowledge

Breadth and repeatability provide the greatest potential returns from a benefit, according to Nucleus: “We often see this in cloud projects such as [Sage] Intacct, because the usability of the application enables companies to extend its use and function to more employees that weren’t touching financial information before (breadth), and the ability to access from anywhere (including mobile devices) increases repeatability.”

2. Quantify the primary costs and benefits

These can either be one-time or recurring. When gathering and including costs in the calculation, be sure to follow these basic rules:

  • Do count everything that is directly associated with the project, e.g., annual subscription fees for the software.
  • Do count infrastructure items that were driven by the project, e.g., extra bandwidth.
  • Don’t count infrastructure items not associated with the project, e.g., existing Internet connections.

Benefits can be either directly quantifiable or more indirect productivity-based gains. One of the greatest of these is increased worker efficiency. Specific examples of benefits that Nucleus Research has found from cloud financial management software such as Sage Intacct included:

  • Saved 500 hours a year on manual data entry.
  • Eliminated $30,000 in annual IT costs, due to moving from an on-premise solution.
  • Reduced month-end cycle from 8 hours to 6 hours.
  • Reduced time for monthly reports from 1 day to 2 hours.
  • Avoided an additional accounting employee.

a database housing a cloud network

3. Assess the financial metrics such as return on investment (ROI) and payback.

To make a solid business case, Nucleus recommends focusing on two core metrics (ROI and payback), and a secondary metric (total cost of ownership):

  • ROI, which is the average net benefit over three years divided by the initial cost, is the most important metric for choosing an application and prioritizing projects during budgeting.
  • A key measurement of risk, payback period is the length of time it takes for benefits returned to equal the initial cost of the project.
  • While total cost of ownership (TCO) provides a good metric for budgeting, it’s not usable for assessing the bottom-line benefits of a project because it only calculates lowest cost rather than greatest return.

Get your best cloud ROI with Atlasphere Consulting

Nucleus found that Sage Intacct users realized both direct and indirect benefits, including increased productivity, increased visibility, reduced or avoided IT costs, improved inventory management, accelerated financial processes, and reduced audit costs. Need help building your business case for your next technology project? Contact the experts at Atlasphere Consulting!

Revenue Management Made Simple

Revenue Management Made Simple


Revenue Management Made Simple

By Paul Johnson

How to Win the Revenue Management Game

Revenue management is a top challenge for many finance professionals—especially those working in software-as-a-service (SaaS) and professional services companies. The new revenue recognition criteria, known as ASC 606, adds even greater complexity. It’s no wonder that companies are seeking to automate their revenue management processes so they can be more efficient, get more compliant, and improve visibility.

a business team of four people sitting at a table to discuss revenue management. A female with short hair leads the discussion

Design better processes

Successfully streamlining revenue management requires a two-pronged strategy, starting with better processes designed from the top down. Since revenue management is an enterprise-wide affair, these processes should be based on input from senior executives across multiple disciplines and functions.

Here’s how:

  1. Define the revenue recognition foundation, such as determining what a subscription is, what falls under “maintenance” or “support,” and what discounts you’ll permit.
  2. Establish fair value pricing criteria using market-tested parameters and centralized data.
  3. Involve auditors in these process designs and policy definitions.
  4. Use standard contracts with defined terms.
  5. Enable collaboration and information sharing across sales, service, and finance.

an older asian man working on his laptop

Invest in the right technology

Automating revenue management yields significant benefits, from faster period closes to greater accuracy and lower costs. To streamline and centralize the management of revenue accounting, businesses need technology that allows the finance team to:

  1. Connect systems. The best accounting systems connect to critical business systems within the organization, such as CRM, services management, and subscription management to create a complete ecosystem for revenue management.
  2. Automate processes. Revenue managers need the ability to codify the applicable rules through flexible templates and schedules that reflect their unique business requirements. The process must drive the automated calculation of both recognized and deferred revenue schedules and forecasts based on contract terms, subscription length, project milestones, and more—and integrate with the general ledger.
  3. Analyze the business. The best revenue management systems deliver a solid picture of both current and deferred revenue by showing a real-time snapshot of future revenues, projected renewals, and total deferred revenue months or even years into the future. You should be able to dig deep to truly understand your business, with visibility into both financial and operating data, and have the flexibility to view the business through multiple lenses to make better strategic decisions.

Master revenue management with Sage Intacct and Atlasphere Consulting

Sage Intacct automates and improves the processes associated with complex revenue recognition. Sage Intacct is the cloud-based technology that allows your finance team to connect systems, automate processes, and analyze your business. Contact us at Atlasphere Consulting; we’re Sage Intacct experts who can develop a winning strategy for conquering the challenges of revenue management for your business.