After a sluggish stretch, initial public offerings surged worldwide in 2017. According to data from Ernst and Young, last year brought the most IPOs and the highest cumulative proceeds from those offerings since 2007. Going public has always been a significant milestone for a company, but the financial landscape has changed so quickly that undertaking an IPO isn’t what it used to be. The hallmark of firms that pull off an IPO and continue making waves for years afterward involves a keen eye toward financial transparency. The companies that execute successful IPOs in 2018 will need to rely on a few of the same fundamental organizational components:

1. Accounting and finance built to scale

By their nature, public companies are often massive enterprises. But size alone doesn’t matter when it comes to the IPO – it’s all about the talent and technology in place from the outset. An article from the U.S. law firm Wilson Sonsini Goodrich & Rosati explained that, in their many years working with clients to prepare for an IPO, filling certain positions was not the only challenge. They would need to not only find the best people with the experience needed to act as a CFO or controller in a pre-IPO company, but also need to be supported with strong financial systems and processes. Unfortunately, according to the firm, many clients came into the planning process using Excel spreadsheets for their accounting and reporting.

“As the challenges facing your company grow, both due to internal growth and new regulatory and reporting burdens as a public company, your financial organization may need to upgrade from spreadsheets to a more scalable and efficient financial reporting technology solution,” members of the firm wrote. “As you plan your SEC reporting and accounting processes, you should ask your auditors what they see as standard for a company of your size in your industry.”

Wall street
Preparing for an IPO requires a higher level of financial diligence than some firms are prepared for.

2. Stronger corporate controls

The choice to go public is no cakewalk, especially for the executives and board members who will make it all happen. One of the biggest burdens weighing down public companies, particularly in the pre-IPO process, involves corporate governance. Without the right process improvements and ability to gain deep financial oversight at all levels of the business, no IPO will get very far off the ground.

At all times, everyone from auditors, to chief officers to board members needs to have access to timely, accurate financial information. Those reports must also be actionable, rather than inscrutable. Developing this ability requires partnering with a flexible services provider like Consero that can integrate disparate data and combine it through intuitive reporting solutions, keeping everyone in check at all times before and after the IPO itself.

3. Documentation

Nailing the IPO process can feel like taking a very big leap, but it’s important not to lose sight of the small details that will tip the scale toward success or failure in attracting investors. Even in our increasingly digital world, printers and designers are still an important component in the IPO workflow. Companies should select a financial printer with a proven track record of success in IPO proceedings, as they will facilitate the front lines of your marketing and investor relations efforts in the very early stages. Documentation and operating procedures must also be created and organized internally to ensure every process is maintained throughout the life of the firm.

The best route to success in each of these priorities lies in a single financial solution that can tie them all together. Talk to Consero for more information and learn how its innovative platform helps firms take that next step toward long-term growth.

Consero FaaS: Disrupting the Outdated Traditional F&A Model

  • Cash to GAAP conversion
  • Clean-up work
  • Interim oversight & support
  • Accounting software Implementation

Build it Yourself Solution

  • CFO / Interim CFO
  • Consultants / VARs

Consero FaaS Solution

  • CFO / Interim CFO
  • or Consero Interim CFO
  • Consero Setup/Transformation
Ongoing F&A
  • Monthly financials
  • Daily accounting support
  • Management reporting
  • Integrate add-on acquisitions

Build it Yourself Solution

  • CFO
  • Controllers & Accounting Team
  • Enterprise Accounting Applications

Consero FaaS Solution

  • CFO
  • or Consero Fractional CFO
  • Consero FaaS Enterprise F&A Software and Services

New PE Platform Investment F&A Challenges

Founder Owned Company Accounting:
  • Existing accounting done on a cash/hybrid basis
  • Run on SMB accounting software and other disparate applications
  • Inability to produce auditable financials
  • Lack of know-how to develop projections & KPIs
  • No consistency/structure to customer contracts
  • Underqualified staff
  • Non-scalable manual processes
Carve-Out Accounting:
  • Required to move off parent company accounting applications in a timely fashion
  • Have to build an entire F&A team
  • No documented operational policies and procedures
To Optimized Finance & Accounting:
  • Monthly financials available in 5-10 business days
  • Audit and diligence ready support details
  • Integrated enterprise grade accounting software
  • Budget and forecast reporting
  • Business KPIs
  • Efficient & scalable processes for rolling in add-ons