One Way to Stay Focused on Growth: Outsource Accounting

Although it’s a $75 million business with complex client contracts and revenue recognition, outsourcing accounting and finance works for Synergis Education.

Meet Scott Wenhold, CFO of Synergis Education, a $75 million company whose entire on-payroll finance team consists of himself and three financial analysts.

GAAP reporting, general-ledger accounting, accounts payable (AP), accounts receivable (AR), internal audit and other core finance functions are handled by a controller at headquarters in Mesa, Ariz., and a seven-person group of accountants and auditors in India. They all work for Consero Global, a finance-services outsourcing company based in Austin, Texas.

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From cloud ERP to finance as a service – how Consero Global is taking business process outsourcing to another level with Sage Intacct

Diginomica is an online platform designed to serve the interests of enterprise leaders in the digital era. Their Co-Founder, Jon Reed, interviews Bill Klein, President of Consero along with Matt Kinsey, Senior Managing Director of BV Investment Partners. They discuss how Consero built a private equity play around Sage Intacct called Finance as a Service.

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Sage Intacct - Consero Global discussion

Recently, Sage Intacct approached me with an interesting twist. Implementation partner Consero Global built a private equity play around Intacct they call finance as a service. Would I like to speak with Consero, and a private equity customer? On the Zoom call, I asked Bill Klein, President of Consero Global, how did this all begin? As Klein told me:

I’m one of the co-founders of Consero; we started the company back in 2006. Back then, the primary objective was creating a modern alternative to building a finance and accounting organization. How to deliver greater financial visibility, improve scalability from an operations standpoint, and do it at a lower, more predictable cost structure.

Over the years, that vision evolved:

As we went along, we put more and more pieces together. A very big piece of that being the Sage Intacct platform, which we use to deliver consistent services to our customers.

“It’s not a custom ERP implementation”

The Consero team did their first Sage Intacct project in 2010. As they got more Intacct projects under their belt, they packaged it up into pre-built configurations:

When we bring on a new customer, it’s not a custom ERP implementation. We’re putting them onto the platform, customizing the policies for the customer, but the process is already laid out. And that’s where a lot of the work is.

Consero Global noted patterns in their private equity projects:

We see this in the PE space a lot. They try to standardize on a software application package. That by no means guarantees consistent results, because two different companies use it two different ways… We’re better able to control companies getting the most out of the software stack, and getting consistent results with it.

And how did the PE market push come into focus?

PE-backed businesses want to understand how the business is doing based on the financial results. They want to identify what they can be doing differently. So they really value that as a key part of their decision-making process. And that was what drew us into the PE world.

Is this a Private Equity micro-vertical?

So would it be fair to call this a Sage Intacct micro-vertical practice, via configuration of the existing application for private equity firms? Klein:

To your point, we did develop some verticals. Then we found the PE firms who invested in those verticals, and said, “Hey, we can put this across their portfolio and actually get them consistent results across their different companies, and do it in a fraction of the time that they would be able to do by hiring out a team, picking out all the different software components they need, and then mapping their processes in?” All that stuff takes them 12 to 18 months, in the best case, when they actually achieve the results they want.

And so we said, “Hey, we can have them up and running on a streamlined platform in 30 to 90 days, where they’re getting financials in 10 days.”

“We’ve never sourced a deal this way”

Time to put Klein on the spot. I asked Klein’s customer, BV Investment Partners: “Did they get you live in under 90 days?” Matt Kinsey, Senior Managing Director at BV Investment Partners, responded:

Yeah, we actually have. It was interesting – we’ve never sourced a deal this way. Consero called on our organization as a potential customer of their business model. At that point, I think we had no portfolio companies on Sage Intacct. They tend to be on QuickBooks Enterprise when we buy them, like most companies in the US, I guess – even though they’re scaled midmarket companies, a lot of them are still on that. We’d seen Dynamics, and we’d had some experience with NetSuite.

But when Consero called on us, we had all these challenges and pain points, exactly what Bill said. We could spend a year just scoping out a system implementation. We needed customer-level profitability; we needed division-level profitability; we couldn’t get the data that we wanted. A lot of times, the operational metrics aren’t tying to the financials. And then you’re taking and tying and wasting all this time.

So about this “finance as a service” thing – was that the hook?

When Consero pitched us, we said: “I think finance as a service, must be a Gartner buzzword, but I doubt that really exists. But if you can do what you say you can do, and get us up and running in sixty days, at that point, we’ve wasted less brain-drain, resources and time, and we can get our businesses growing faster – we’re all for it.”


We tried it in one of the companies, and we ultimately turned it around and said, “This is such a good powerful business model. It solves all our pain points. Let’s make an investment in the business, and help them build the brand within the private equity community.” At this point, I think we have half a dozen or so of our portfolio companies on the platform. It’s pretty much our playbook for any new investment.

The push for a strategic finance team

It’s a longstanding conversation I’ve had with Sage Intacct: how do we help finance teams move from administrative to strategic? Kinsey:

If you talk to our CFOs, they were not able to be as strategic as they are now with Consero. They would get into the weeds closing the books… It’s a different mindset. They want to be strategic and forward-looking… It’s that marriage of the people with the systems, and that time window that you’re talking about, 30 to 90 days – that just solved a whole lot of pain for us.

Klein added:

To your point Matt, the CFOs that want to be in the business, not in the general ledger, those folks love the model and get the most out of it.

A final hot seat question for Klein: is this business process outsourcing?

To Matt’s point, we term it finance as a service – we found that resonated well. That means it’s the service, but it’s also the software and the processes that we bring to bear. To your point, I’ve heard people use BPaaS, or BPO, or business process as a service, but we use FaaS, because we think it’s the most applicable and highlights the true nature of what we do.

The wrap

This isn’t just a micro-vertical story. But what Consero has done by pre-configuring and packaging capabilities into services is working.

Consero has taken it further, adding an “engagement layer” for non-finance types to access needed reporting data without getting into the depths. In terms of pricing, Klein makes a crucial point about moving away from time and materials implementations. As he pointed out, there is no incentive to automate when you are billing for time. But when you productize your service offering, the push to automation is at the core.

One thing that intrigued me was the sales process: is BV Investment Partners pushing Sage Intacct to all their clients? No, said Kinsey. When Kinsey’s team takes on a new client, they brief the client on the metrics and financial reporting they will need. If the company can handle that reporting, fine. No surprise, most can’t – so they ask for advice. At that point, Consero’s FaaS option, powered by Sage Intacct, is introduced as an option.

I asked Kinsey what the most challenging KPIs are for their clients not yet running on Sage Intacct. He responded:

One example that always comes up is tying CRM data into your income statement, and all your sales backlog conversions, and then how that data ties to your P&L – that generally doesn’t seem to tick and tie very well. That’s just one example.

Another example? Companies formed by acquisitions, running on disparate systems. When a client is contending with multiple versions of Quickbooks for separate companies, they struggle with BV’s reporting requirements. Consolidating in Excel is a recipe for hair loss. Kinsey says having pre-defined processes from Consero helps considerably. Sage Intacct’s consolidation module allows them to set up one entity to manage multiple companies. Sage Intacct dimensions allow them to manage those divisions by location. As he put it: “We’re not having to re-invent the wheel.”

Obviously, this is not the easiest time for startups to make weight. Does this type of real-time view help? Klein says yes – the granularity of Sage Intacct can make a difference in pandemic times. He cited a customer that turned to Sage Intacct for product-level profitability. Prior to that, they couldn’t properly analyze which service lines were successful, and which were struggling.

This story didn’t cause me to question my belief in the verticalization of cloud ERP. However, it expanded my thinking on how you can get there. And as a bonus, with FaaS, I picked up a new buzzword. As always, the lingo is much less important than the results.

Why the accounting or finance department is ripe for disruption

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Bringing artificial intelligence and other software into a company’s finance function can have big benefits — improving transparency and the speed of information flow, for instance — and helping CFOs shift their focus from putting out tactical fires to strategic initiatives.

“Seventy percent of your time can be freed up to focus on strategic initiatives,” says Scott Tynes, CEO of Consero, an Austin-based provider of finance as a service, an outsourced finance solution for growing companies. His company, as part of its overall technology-enabled solution, has developed SIMPL, a cloud software platform for finance, along with Simon, voice-activated AI technology that functions as a SIRI or Alexa for the accounting/finance department.

But software alone won’t bring a business the benefits of artificial intelligence. “This happens a lot of times even outside AI technology, quite frankly,” Tynes says. “A lot of times people think, ‘Well, our finance function is a disaster. We just need to move to this new general ledger and that’s going to fix everything.’ Ninety percent of the time the problem isn’t the general ledger. It’s the process that’s leading into the general ledger. If you don’t fix the process, just throwing technology on top of it isn’t going to fix the problem.”

A business needs the right kind of software and processes in place to maximize AI effectiveness and build a strong finance function for the business. “For AI-type functionality to work, the data and the way that the data is stored has to be in a very consistent fashion,” Tynes says. If the software is from multiple vendors that use different processes to arrive at conclusions, that will only confuse whatever AI is put in place.

“The AI doesn’t know how to get an answer as well as when you have a consistently-defined technology stack. It’s much easier to put AI on top of well-defined technology,” Tynes says.

The solution

Business leaders already have access to powerful consumer artificial intelligence tools on their smartphones. And they will want it for their business and finance functions.  “To get this type of functionality, the foundation of it is having a ton of volume and centralizing that volume into one place so that you can standardize how it’s done,” Tynes says. “We kind of view it as you’ve got to centralize it, then you can standardize it. Then you can automate it.”

That’s tough to do in-house at a small or medium-sized company. Research and development to create an effective AI is a multi-million-dollar proposition, and small and mid-sized companies cannot always justify those large expenditures. That’s why Tynes thinks technology will drive small and mid-sized companies to outsource accounting and finance functions.

“Think about a small company with a four-person finance and accounting team. They’re not going to go build the smartphone and the Siri that sits on top of the smartphone. There’s just no way they’re going to go build that,” he says. “It’s way too expensive and doesn’t make sense for a four-person finance and accounting function to go build that. The way they can access that is to go to an outsource provider that, because they serve hundreds of companies, it does make sense for them to build that functionality.”

That’s true even at larger companies below $1 billion in revenue, he adds. “These technology tools take millions of dollars of R&D efforts and nobody’s going to direct millions of dollars of R&D efforts to a $200 million business’ finance and accounting function,” he says.

What to look for in an outsource provider

Tynes says there are a few questions executives should ask when looking for a provider of outsourced finance solutions, including:

  • How is success measured? For instance, is there a threshold acceptable error rate per a certain number of transactions?
  • What tools will executives have to access and understand success?
  • What kind of technology workflow tools, such as task management systems, is the provider using to handle the work?
  • What are the turnaround times for work and information requests?

“All those kinds of questions will help you as a buyer get underneath the question: ‘Am I really buying a technology-enabled service here, or am I just buying a bunch of people who say they’re going to manage this finance function for me?’ What you really want to make sure you’re buying is a technology-enabled service that’s using workflow tools, automation tools, to really up the quality of the finance function that you’re getting,” he says.

Learn more about Consero’s finance as service offerings, including requesting a demo.

Consero provides solutions for high-growth, mid-market companies with a superior alternative to building and maintaining an in-house finance function. It also offers solutions in strategy and funding services, operational financial services, financial controller services, bookkeeping and administration services and a cloud software platform.
Kent Bernhard is a freelance writer for The Business Journals.