During a recent Dive-In & Dine webinar, Consero Global Vice President of Marketing Bridget Howard spoke with Chad Denton, the CFO of Findhelp, about how the organization is outsourcing the finance and accounting function to Consero. Findhelp’s social care technology connects people to the help they need with dignity and ease.

Denton and Findhelp have created a cost-effective, scalable, data-driven finance function by partnering with Consero to leverage the Finance as a Service (FaaS) model. Consero provides Findhelp with a standard set of financials via SIMPL, Consero’s FaaS software platform, with additional custom reports as needed. The pricing structure scales with the business, offering additional support and custom reporting as needed.

No More In-house Accounting

Denton first worked with Consero when employed by a software company in the mid-2000s, outsourcing the company’s finance and accounting functions to Consero.

“That’s when I decided that I didn’t want to do accounting in-house ever again,” he said. “It’s no fun and I’m not very good at it. I’d rather spend my time focusing on strategic and operational tasks for the business.”

When Denton joined Findhelp two years ago, the company was already outsourcing its accounting. “But I wanted to work with Consero and take advantage of all the additional services they offer through FaaS,” he said.

Denton also likes the fact that Findhelp doesn’t have to purchase any accounting or reporting software. “Consero handles all of this,” he said.

Simplifying Board Reporting

As an investor-backed CFO of a healthcare software company, Denton tries to simplify board reporting as possible. “Yes, board members need metrics and data, but I create a three-to-four-page summary view to describe what happened. This makes for a more interactive board discussion that’s more efficient than just a data dump.”

Consero provides all the variances, which allows Denton to see financial data in real time. “This is incredibly helpful,” he said. “I can share with my staff how they are positively impacting KPIs that drive our business. The more information I can provide them, the better decisions they will make.”

Meeting Staffing Challenges with Outsourcing

Howard noted a recent study indicating that labor and staffing are one of the top challenges facing CFOs today. By outsourcing to Consero, Denton and an in-house staff of just two employees are able to handle all of Findhelp’s finance and accounting. “This is crucial to scaling the business because we’ve been growing at 50% annually for the past four or five years,” he said. All this growth has been organic: It took Findhelp 10 years to reach one million users and now they’re adding this many new users every month. Outsourcing F&A to Consero removed the burden of hiring internal finance and accounting staff to keep up with this growth.

“We’re on a path to profitability, and Consero has been a big part of this,” said Denton.

To learn more about Consero and the benefits of using the Finance as a Service model, you can request an introduction here.

Five Elms Capital’s portfolio company Flywheel was faced with the common dilemma of having accounting practices that didn’t keep up with the company’s growth but took a chance on Consero as an outsourced financial solution. This is what happened next.

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Consero in Action: Flywheel

There was little doubt that Flywheel was a valuable business. The Omaha, Nebraska-based company was a leader in its space of managed WP hosting, having grown to $18 million in revenue and roughly 145 employees. But when Steve Isom arrived at Flywheel as the Company’s first VP of Finance, he found Flywheel’s accounting processes hadn’t evolved since its founding.

“Their accounting department was one person,” says Isom. “And everything was on QuickBooks® . . . for a business with almost 150 people.”

This one person also did payroll and benefits manually, which yielded an enormous amount of variance. To make matters worse, this person had resigned before Isom had started the job, so he was left with a single temp employee who was tapped to keep vendors and employees paid.

Move Fast . . . And Fix Things

“I was overwhelmed from day one, and the stakes couldn’t be higher for me,” says Isom. “This was the first time I’d be owning all the finance & accounting and I didn’t want to spend the first year just on getting the accounting function in order.”

He had started by looking for local talent, ideally a local controller with some experience at a tech enterprise, but Omaha didn’t have a deep pool of candidates. Even if he found the ideal person, it would take 6-12 months to onboard, train, research & architect new systems, implement, optimize, etc.

“The quality of the underlying financials ensures a smooth due diligence process. With Consero, I could focus on the transaction and not worry about getting financials in order. Their professional finance team and processes inspire confidence for everyone involved in due diligence.” Steve Isom – VP of Finance

The Proof is in the Process

“I did my due diligence, and after speaking with several current clients of Consero, I was sold,” says Isom. “Consero’s clients seem genuinely happy and not merely giving some standard issue referral.” But that was still no guarantee that Consero would work as well for Flywheel.

Luckily, he was relieved to find the onboarding process was smooth and well-run.

“I appreciated how informed and determined they were about best practices, when a lot of outsourced service providers simply offer to take over a client’s poorly designed, or non-existent process,” says Isom.

But the speed of the implementation process impressed Isom the most. “Their implementation is a 30- to 60- day process and we finished it in 21,” says Isom. Before, he worked day and night to get his work done. He joined in August, and by October, Consero’s team was in place, running the accounting and finance team. “By then, I was only devoting 30 minutes or so a day on accounting, and that freed me up for the strategic work I was hired to do.” Consero continued to impress him by asking questions once, documenting answers and holding themselves to consistently high standards.

Audit-tested

The first big test was when Consero managed a 2018 audit, despite only having handled the books since October.

“They passed with flying colors, so we knew just how detailed and accurate their work was from day one” says Isom.

By April 2019, the Company was raising additional capital, and the diligence process proved just how much the financial operations had improved.

“Consero handled all the investors’ inquiries as part of the normal course of business, without additional hours and fees, and always responded to questions within 24 hours,” says Isom.

Soon after, WP Engine, the market leading managed WP hosting company, made an unsolicited bid for Flywheel. After the two companies agreed on strategic alignment and a possible price, they dug into the books.

WP Engine tapped one of the big four accounting firms to sign off on the tax, finance and legal elements, and all that diligence work went right to Consero. “This wasn’t just about workload,” says Isom. “We were able to tell a story that we had known our systems and processes weren’t sufficient and we did something about it.”

Keeping Trusted Partners

Consero still serves Flywheel, even as the company is now part of WP Engine, which has its own substantial financial staff and resources.

“They understood that Consero was part of our team, my team, and that we were working well together,” says Isom. “And in this case, I don’t have to handle the HR or career development issues of in-house staff.”

Five Elms Capital was certainly impressed with the results, as they tapped Consero for three of their other portfolio companies since the success at Flywheel. Five Elms adds value to their portfolio companies by providing the resources and expertise to fulfill their potential. They have identified Consero as one of those critical resources, given the importance of clean, accurate, audit-ready financials, and a streamlined process. Consero frees the businesses up to do what they do best.

How Consero helped large acquisition-driven business establish a rollup platform and accelerate acquisition returns.

A large provider of systems and applications management software backed by a private equity firm had some significant problems managing the major changes to its business that regularly occurred due to incorporating rollup acquisitions into its business model. With an emphasis on adding smaller operations, a number of issues tied to standardization, visibility and prompt completion of accounting activities arose. The Houston-based business turned to Consero for help streamlining accounting practices and realizing better results – including increasing its valuation – following a series of rollups that pushed its accounting infrastructure to the breaking point.

Understanding the many accounting problems facing the business

The business had recently completed the acquisitions in the legal and functional sense, increasing its value to $300 million, but had not fully integrated accounting processes between all the new entities under its umbrella. It had four more companies in the acquisition pipeline, which only made the problem more severe considering the 6-12 month optimization timeframe. All of the individual organizations had their own systems and workflows that were incompatible with the core company and each other. Generating consistent reporting was difficult, if not impossible.

Accounting relied on an outdated Great Plains system that couldn’t effectively manage various vital tasks.

• Revenue recognition was fractured to the point of needing to use offline Excel sheets to complete this foundational activity, and deferred revenue wasn’t captured correctly.
• The company had freelance accountants dispersed in an inconsistent, unsustainable manner.
• It lacked A/P and expense automation capabilities.

With so many issues that needed to be addressed on a constant basis, the accounting team didn’t have the bandwidth to make substantial improvements. Without bringing on a dedicated acquisition integration team – an especially costly proposition and one that’s difficult to utilize efficiently in the long term – the business had little hope of deploying an efficient and effective rollup play.

With the company’s business strategy built in significant part on rollups bringing a greater number of smaller businesses into the fold over time, and a desire to expand to provide related services alongside their software, the need to make significant, positive change was clear.

Going forward, a Finance-as-a-Service model could provide finance & accounting support that is:

• Flexible
• Consistent
• Scalable

An effective solution that adapts along with the company

An organization focused on rolling up smaller companies will have regular peaks and valleys when it comes to integrating new acquisitions and adjusting and improving accounting processes accordingly. Consero’s provision of Finance as a Service allows for seamless adaptation along with scaling staff and support as needed. The company can operate between acquisitions normally, then capably adjust during periods where a new acquisition needs to be brought up to speed and integrated into the larger operation. Currently, Consero has 17 accounting professionals on staff, split between senior leaders and frontline staff.

Another valuable element that Consero brought involved implementing a new technology stack to align all of the constituent businesses. With Consero’s combined experienced and knowledgeable implementation team, the company saw some major improvements. It can now ensure vital accounting needs like reporting are completed in a consistent, highly visible fashion across all of its constituent entities. That includes all of its rollups, including a recent $100 million acquisition, as well as the $300 million holding company.

The substantial benefits that come with Finance as a Service

With a methodology including: centralize, standardize and automate, the Consero team established a 30-day implementation playbook for adding acquisitions into the new tech stack. This is a transformational change that greatly reduces stress on in-house staff and leaves them free to address the many other M&A concerns that need their attention. With a well-oiled machine in place, future additions will be a simple, standardized process. Consero has staff trained in the necessary processes to quickly and accurately complete this process. With so much of the effort centralized, standardized and automated, costs, reporting and scalability all improve. Phase 1 of the project alone involved savings of 63%.

Similarly, the CFO of the private equity firm backing the business and the company’s own senior accounting staff no longer need to dedicate significant attention to the technical needs of the rollup process. Instead, they can focus on strategy, investment considerations and future rollup targets, which is a key driver of value.

Instead of the internal accounting team trying to manually complete revenue recognition and compile incompatible reporting from across the many constituent companies, the business now enjoys standardized reporting with automated dashboards and real-time visibility via Consero’s financial console, appropriately named SIMPL. This is true now and will remain so into the future, as additional rollups are quickly and reliably added to the tech stack.

Before

• Unreliable finance staff.
• Outdated finance & accounting system.
• Fractured revenue recognition.
• Difficulty closing the books.
• Due diligence was a burden.
• Time to optimize was 6-12 months.

After

• Trained finance team is able to scale as needs change.
• Modern cloud-based software stacked for all financial needs.
• Standardized and automated processes.
• Ability to adhere to standard two-week close.
• New acquisitions have a timely and effective process in place.
• Optimized in 3 months.

With Consero taking the lead on staffing related to integrating rollups and managing core considerations like automated reporting, A/P and expenses, the company enjoys another major benefit: Significantly reduced recruitment, training and management costs. With a well-designed and reliable model, as opposed a fluctuating model, it is much easier to anticipate and budget for accounting needs. The Consero internal team for this client is up to 17 people. If the client chose to staff in-house rather than leverage Consero, it would have cost a significant amount in salaries and benefits for a full complement of employees. Consero offer the same level of expertise and ability at a fraction of the cost (30-40% less than in-house).

How else has Consero helped?

• The books are closed on time, reporting is accurate and consistent and consolidation is an automatic process.
• Due diligence is no longer a burden, it’s easily worked through.
• Along with addressing specific issues tied to incorporating rollups into the parent company and managing staffing concerns, the business now has a more accurate, timely and effective accounting function in place.

The value of Finance as a Service to this large company and many others like it is clear. With a dependable partner providing top-notch, customized finance & accounting support that scales with business needs, executives can be confident their organization is in the best position to realize a number of benefits:

• Improving finance & accounting processes
• Reducing associated costs
• Enhancing operational insight
• Providing enhanced infrastructure
• Shortening the monthly close complexities and timeframe

All of this is possible with the right outsourced partner. To learn more, get in touch with Consero today.