Investor-backed (Five Elms Capital) software business, Flywheel, faced a common dilemma: the finance and accounting function couldn’t keep up with the company’s growth. Here’s what happened when Flywheel’s VP of Finance turned to Consero as an outsourced financial partner.
Challenges: Outdated Systems & Processes, Understaffing
Flywheel was a valuable business. The Omaha, Nebraska-based company was a leader in managed WordPress 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 the 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, leaving Steve with a single temp employee who was tapped to keep vendors and employees paid.
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 Solution: Finance as a Service (FaaS)
“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.”
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.
| The Goal | The Results |
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Stand up FlyWheel’s finance and accounting function to free Ipsom to focus on higher value creation work.
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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.
Consero continued to impress him by asking questions once, documenting answers and holding themselves to consistently high standards.
Diligence-ready Financials
The first big test was when Consero managed the fiscal year 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, Flywheel 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. By providing clean, accurate, audit-ready financials and a streamlined process, Consero frees the businesses up to do what they do best.
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