The fiscal cliff, the federal healthcare law, the European debt crisis, and an unpredictable recovery are just a few of the uncertainties that cause management to pause when considering key investments in their infrastructure. These looming macroeconomic uncertainties have many executives struggling to bridge the gap between preserving cash flow and working capital, and investing in the necessary human capital to facilitate growth of their business. In the wake of the recession and subsequent reductions in finance and accounting staff, worker productivity has risen, but there are no additional savings to wring out of an existing workforce that has little more to give. Adding to this predicament is the ever changing landscape of the regulatory environment, including accounting rules and regulations, which require technical expertise to evaluate and implement. This creates an additional gap: how can executives do more with less and still comply with increasingly complex regulations? When the Company is stretched to the limits of its in-house capacity and skillset, human capital needs must be addressed either through a permanent hire, temporary help, advisory services, or outsourcing. The decision as to which road to travel involves a thorough analysis of existing processes, employee capabilities and utilization, and an assessment of current and upcoming resource needs, all balanced against the capital required to finance such needs. The analysis should yield information regarding existing and future resource gaps, including the skillset needed and the effort required. It can be hard to determine when it is time to make the decision to hire, or if another solution is more cost effective at the current time.
So, what strategic solutions should be considered to bridge the gap?
Advisory Services
Companies can extend management’s capabilities through utilizing a strategic advisor, whose past experience can bring an independent and fresh perspective to the table. Moreover, the use of a strategic advisor allows the Company to expand its bandwidth when in-house resources are already tapped out. Equally as critical is the continuously changing landscape of accounting rules and regulations, which has resulted in many cases where the gap between the auditor requirements and the Company’s ability to deliver on these requirements is ever-widening. Engaging an advisor is often a more cost effective solution than increasing full time employee headcount. Advisors can perform assessments and provide recommendations to the organizational structure and internal processes to maximize productivity, and help in the implementation of such changes. These changes, when implemented, can increase efficiency and obviate the need for additional headcount. An advisor, a subject matter expert with an established body of knowledge, is a resource that owners and management can draw on as needed, when the time or talent required to solve a problem or to seize an opportunity are not available in-house.
Accounting Outsource
It is not uncommon for founders of start-up or emerging growth companies to find themselves holding the keys to the finance and accounting department, often maintaining the accounting records themselves. Needless to say, this is a less than ideal setup: their time is more valuable focused on the growth of the business and not the back-office. That being said, the importance of the back-office function cannot be disregarded, as prospective investors often value the intangible aspects of a company keeping its fiscal house in order. As operations grow and the complexity of transactions increase, management encounters an inflection point at which they must decide how to collectively manage the business, while simultaneously focusing their time in the most productive manner. In certain cases, a full time accounting and finance function may be the solution, but most companies of this size do not require the increase in headcount and the ensuing burden on their available cash. Enter the outsourced solution. This can take a number of different avenues, ranging from full outsourcing of the function to supplemental assistance reporting to existing in-house finance personnel. Outsourcing can gain operational efficiencies and skills that one would have a difficult time replicating in-house. This is often most specifically displayed through a significant increase in the speed and accuracy of internal and external reporting. Different from a traditional bookkeeper, a true accounting outsource function is performed by a dedicated team with a structure similar to a typical accounting department (General Ledger Accountant, Controller, and CFO). The team tackles all of your core finance and accounting processes in a way that eliminates unwanted overhead inefficiencies and, on average, drives cost savings up to 50% over a full time accounting department.
Interim
Inevitable in every business is the need to fill a position on a temporary basis – an employee may be out on medical leave or an extended leave of absence, or the specific needs of the business may have a seasonal spike that requires additional assistance to bridge the gap. An interim hire is an attractive, cost effective alternative to stretching the responsibilities of the remaining headcount. Since an interim hire does not become an employee of the Company, the Company is not burdened with the administration, employee benefits and insurance cost of a full time hire. This also allows management to more definitively budget costs, as it alleviates the uncertainty regarding future employer taxes and health care related costs of an employee. The interim employee is charged on an hourly basis and can be utilized for as long or short as the position needs to be filled. The cost of the employee varies based on the complexity of the skills required and the scope and requirements of the assignment. From staff accountant to a temporary CFO assignment, an interim hire fills a job that has a specific goal and timeframe, but does not necessarily need a permanent person once the assignment is complete.
Permanent Hire
Every company needs resources in order to perform accounting and finance roles. An efficient accounting and finance department can be structured using permanent employees. These employees become a part of the business and can work to help grow a strong and profitable company. The employee with the right background can make a large impact on an accounting and finance department through commitment and accountability to the Company. Finding the right person is extremely important. Matching a prospective employee’s knowledge, experience and personality to a Company can be difficult, but the pay-off of a great fit is invaluable to a Company. Once a strong accounting and finance team is in place, the Company can use temporary hires if needed to supplement short-term projects, but have the core team in place for normal operations. This can create a strong unified culture and branding for any business.
It is important to all businesses to have timely and accurate financial reporting. This can be accomplished using various methods and combinations of methods, but in the end it comes down to one thing: people. Having the right people for the job is the most important aspect of cost effective business solutions. At times, it is more cost-effective to use outside help, while other circumstance warrant hiring a full or part time employee. However, finding the right solution and aligning the right talent can be a difficult and burdensome task. At Beacon Resources, we work with clients to thoroughly understand their needs and co-develop a strategic solution to bridge the gap, whether it be advisory services, outsourcing, temporary or permanent hiring. Once a strategic solution is determined, we use our years of experience to match skilled accounting and finance personnel with companies, providing the highest return for their investment.
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Beacon Resources has the experience and expertise to deliver high-quality accounting and finance solutions that will help your business navigate today’s complex and challenging financial environment. In our three practice areas, you’ll find a spectrum of resources and solutions that can make a tangible difference in managing your business and achieving growth in a cost-effective manner. Whether you need advisory services, accounting outsourcing, or staffing and direct hire placement, our professionals are here to help steer a clear path for your success.
For additional information please visit www.beacon-us.org
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