Consero Answers: How To Get Paid in Full

Its one of the most gut-wrenching moments for any business owner or executive (and we have all been there!) – the moment when you realize that revenue from a job or a sale was less than it should have been … and through nobody’s fault but your own.

Any small or midsize business looking to survive for the long haul must make sure that it gets paid full value for the product or service it provides. Yet in many SMBs, simple human error often results in a revenue pipeline with more holes than a sprinkler hose.

The culprit is usually over reliance on memory, a poor substitute for rigorous processes and well integrated systems. Here are three ways poor financial controls could be constricting your cash flow:

1. Invoiced hours don’t match billable hours. If you’re a service firm, the chances are good that your consultants track their work on paper or in a dedicated time system or contracting tool that doesn’t interface with the accounting system. An account manager or project manager may (or may not) review billed hours, but recording the information is a manual process, and crucial data can easily fall into the cracks between timesheet and invoice. How can you be certain that the total billable hours submitted equals the total billable hours invoiced? If the only answer is “because that’s what the project manager remembered,” consider that a danger sign. Memories are fallible, and data is ephemeral if it’s not rigorously channeled and checked.

2. Subcontracted work doesn’t get billed through to the client. Let’s say you’re a custom residential construction company, and you subcontract with landscaping firms and bill their work through to your clients. What checks do you have in place to make sure that the bill-through actually happened? If the process depends on somebody in accounting or a project manager remembering to do it, expect it to break down at some point, resulting in revenue losses. By the time you find out, it could be months after the project closed. No business with a reputation to protect is going to want to go back to the client to make up the shortfall at that point.

3. Opportunities to increase recurring revenue go begging. Businesses that generate revenue via leases, subscriptions, or annual contracts – many software providers, for example – can benefit from raising their prices at renewal time. Tracking a handful of customers and renewal dates may be simple enough in a company’s early years, and an Excel spreadsheet may work just fine. But by the time the business expands to serve, say, a hundred or more customers, the task is looking a lot more daunting, and the risk of costly errors has escalated. The old spreadsheet may still work – but only as long as somebody remembers to look at it and doesn’t overlook something.

4. Are automatic renewals costing you money? Human memory is a powerful and mysterious faculty, but it’s designed for standout events – you remember your kid’s first steps, or where you were on the day your team won the World Series. It’s not designed to keep a steely grip on repetitive inputs. For that, your best friends are well-defined processes, robust technologies, and time-tested best practices for tight financial controls.

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