Sage Intacct

Article Dean Dorton

As leaders, CFOs should be able to answer a few key questions about their company’s financial health, to feel confident that business is sailing smoothly on its successful course.  Find out what you need to focus on to mitigate risk and plan for your company’s future financial health.

1. Can I answer confidently that we would have a clean opinion if we face an audit?

Whether your company is in its early stages or is a firmly established business, audits are the standard to gauge the integrity of your financial management practices.

If you don’t aim to engage in a full accounting audit, qualifying for a clean audit opinion can help maintain your company’s reputation for financial integrity and compliance. It ensures that your billing, tax, and fraud checks are in place.

Companies that aim for clean audit opinions can use a financial management software solution designed to keep businesses on track with financial management integrity, fiscal transparency and regulation compliance. A cloud-based financial management solution like Sage Intacct is specifically designed to help their companies comply with ASC 606 and IFRS 15 guidelines.

2. Are we analyzing the best metrics to measure our profitability and productivity?

As today’s businesses grow and change, so do their KPIs. CFOs can stay on top of margins by periodically re-visiting their metrics for relevance, value, and accuracy.

CFOs that spot productivity trends most effectively use cloud-based dashboard features like you’d find with Sage Intacct, to provide the most accurate data, in a snapshot showcasing your data.  From one screen you can customize your metrics and change them at any time, with no waiting until month’s end to get fast answers.

3. If we hit an obstacle or disaster, do I know where we could financially streamline to mitigate risk?

Risk management is part of preparing for the future, and CFOs need a Plan B to protect against unforeseen events. Having deep insights into the details of your company’s financial health ensures that you can mitigate risk effectively.

Sage Intacct’s best-in-class financial management solution offers wide windows into your financials with their unique tagging feature to easily organize, search, and categorize your chart of accounts no matter how detailed.   You can even drill down to source transactions in reporting to catch sight of acute obstacles before they escalate.

Whether you need to rewind into specific transactions to gather a history, or project forward to estimate how your financials will sustain today’s events over the course of time, a best-in-class cloud-based financial management solution can help.  

Contact us. We can offer guidance with your questions about the right cloud solutions to help you lead your company with financial confidence and clarity.

There’s More!

Check out our free whitepaper “Confessions of a CFO”, which highlights critical aspects of financial management that CFOs have concerns about and what the best solutions are.

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Article Dean Dorton

It’s the 21st century, and the digital economy is king. More importantly, it has fueled the rise of the subscription economy. If the statistics by Zuora Research are anything to go by, this trend is hardly surprising. Today’s consumers want flexibility and variety: think Netflix, Amazon, and Spotify. Everyone wants choices.

Too busy to shop? You can have your groceries delivered to you. Want to learn a foreign language? Sign up for classes at hundreds of reputable online schools. How about movies? If you want choices, it’s Amazon Prime or Netflix hands down. The digitization of business shows no signs of stopping. In fact, Gartner predicts that more than 80% of software providers will switch to subscription-based business models by 2020.
So, what does this have to do with ASC 606 compliance? Plenty: subscription-based businesses will be most affected by the new law. So, it’s imperative that private (and public) companies take immediate steps to comply with the new law.

The 5 Important Steps In Complying With ASC 606

  • Determine the terms of the contract with the customer. Contractual obligations must be clearly stated i.e. payment terms and transfer of control clearly defined. Here, there is a further complexity for SaaS or cloud-based businesses: they must decide whether contractual upgrades or downgrades constitute modifications or new agreements.
  • Identify the performance obligations in the contract. These obligations must be accounted for separately. Goods and services are considered distinct if customers can benefit from them separately.
  • Determine the transaction price. This is simply the amount the consumer agrees to pay in exchange for goods and services. The complexity arises, however, when businesses offer recurring discounts, rebates, or incentives. In this step, variable considerations must be included in the transaction price.
  • Allocate the transaction price. In this step, you’ll take the transaction price in #3 and allocate them to the separate performance obligations.
  • Recognize revenue when the performance obligation has been satisfied. Under ASC606, subscription companies must decide whether they will recognize revenue up-front or over time.

Why Companies Must Start The Process Now

#1 Compliance May Involve Many Complexities

Many industries will be affected by the new law, including telecommunications, construction, information technology, and automotive. Businesses must decide how they will handle warranties, usage-based pricing, and multiple contractual variables. These considerations certainly complicate the subscription billing process. Additionally, revenue from unrealized (whether full or partial) performance obligations must be reported as “deferred.”

Another complication arises when sales teams earn commissions for obtaining contracts. Under the new law, businesses can no longer expense sales commissions; they must be amortized (a form of capitalization).

#2 Businesses Must Handle Larger Data Volumes Under The Law 

According to Ventana Research, 68% of businesses use spreadsheets exclusively to manage their sales compensation and commission process. However, an overwhelming 61% admit that spreadsheets are inefficient and prone to errors.

In light of this, manual processes will prove inadequate in handling the large data volumes under the new law. In fact, commission amortization is a data-intensive two-step process. First, commission costs must be determined for each “distinct” performance obligation. Here, commissions earned by every member of a sales team must be accounted for.

Second, the commission cost must be recognized with the related revenue. This is to ensure that the commission amortization and revenue recognition schedules match.

#3 Revenue Recognition Errors Can Result In Decreased Investor Confidence

For SaaS businesses, the new law further complicates their relationship with investors. Venture capitalists may now dispense with using backlog disclosures as a primary metric of financial performance. Due to the variables in a SaaS contract, they may choose to focus on ASC 606 ARR (Annual Recurring Revenue) disclosures instead. So, revenue recognition errors and/or non-compliance with ASC 606 are likely to reflect poorly on businesses.

#4 Non-compliance Can Delay IPOs

According to ASC 606, private companies and emerging growth companies have until January 2019 to comply with the law. However, public companies that delay compliance may find themselves at a disadvantage when it comes to their IPO (Initial Public Offering) launches. In terms of market viability, the grace period for emerging companies is illusory at best. It is far better to comply, sooner rather than later.
For you, the process need not be an overwhelming one. With Sage Intacct, you get automated efficiency and thorough compliance with ASC 606, all without the pain of spreadsheet management. So, contact us: you have nothing to lose and everything to gain from simplified perfection.

Are You ASC 606 Ready?

Explore more on the guidelines to ASC 606 readiness and how to business risks through compliance in our special edition eBook:

6 Rules for ASC 606 Readiness.

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Article Dean Dorton

Written by: Hannah Sarradet, Solutions Consultant at Massey Consulting

The Order Entry module in Sage Intact gives you the ability to create a workflow that works for your company through a feature called “Transaction Definitions.” These transaction definitions can be things like quotes, sales orders or product-specific invoices, and you can create them yourself! In doing this, you also have the ability to format the associated documents to your company’s specifications. This is a useful feature that allows for customization, but it also requires you to be pretty handy with Microsoft Word. Here are some things I’ve discovered through designing custom documents:

1. Start from the template that is most like your target document. When creating a custom document In Sage Intacct, the best way to begin is to export one of their pre-designed sample documents that will be accessible through Customization Services or Platform Services in any Intacct system. There are about 10 or so examples to choose from, and it helps to already have a format and basic layout for the document. Often times, the client provides a sample invoice to showcase the structure they would like, so I’m working from an already-formatted document. In a situation like this, you want to be able to match the client-provided document as closely as you can. In that case, I can sift through the layout options provided by Intacct and determine which one most closely matches the client’s layout. From here, you can do things like paste in your company logo, choose fonts and color schemes, rearrange tables and text boxes, etc. The formatting options are almost endless. 

2. Copy merge fields from sample documents if possible and applicable. The tricky part about creating custom documents is the merge fields. Merge fields are codes that tell Intacct to generate a certain result that is specific to each customer and consequently each document. Think of information that will show up differently for every different type of transaction. For example, the customer name, the document ID, the date issued, etc. Since we don’t want to have to manually change these fields on every quote and invoice we send out, Sage Intacct uses merge fields to generate the appropriate information. However, if you don’t get the codes exactly right, it can show up incorrectly on the document. This is where the copy and paste function is helpful. I always find that if Intacct has provided the merge field I need on a pre-designed document, it’s quickest and easiest to take it from the original and paste into my own document. This is a particularly helpful trick with subtotal fields as they require slightly more complicated coding in addition to the standard one-field insert.

3. Become familiar with the merge fields. Merge fields are the foundation of custom documents in Intacct, and they can help you create documents that make your Sales workflow go very smoothly. In the case that you cannot find the field you need on a pre-designed Intacct document, there is, of course, another way. There are many merge field options that are available for customizing your document, so sometimes it’s hard to look over all of them to really know what all you can use them for. My suggestion is to really become familiar with the options you have for merge fields so you can maximize the useful information you are putting on your forms. It’s also important to note that the MS Word add-in separates the fields out by module and type of document (Picture below) as fields differ between the different options. So, if you can’t find something you’re looking for, make sure to first check that you’ve selected the correct module and document.

formatting custom documents inside Sage Intacct

All in all, Sage Intacct’s ability to let customers have Sales documents specific to their company needs is not only useful but also increases the efficiency of business processes. Use these tips to format your company’s perfect custom documents!

Article Dean Dorton

For today’s businesses, financial management in the cloud is a natural first step to keeping up with market demands.  However, many companies are resistant to this change for fear of the unknown, or talk around the water cooler.

As experts in financial management solutions for growing businesses, we can shed some light on those myths.

Myth #1: The cloud is more expensive than on-premises solutions.

On-premises programs demand updates, maintenance, and upgrades just to stay current. This means waiting for a consultant, buying an add-on, etc. Further, if you don’t keep current, you could risk compliance. With a cloud-based best-in-class solution like Sage Intacct, ASC 606 and FASB 15 compliant software, maintenance and update releases are automatic, all worked into your expected costs. Reality: The right cloud-based solution can be more cost-effective than on-premises software.

Myth #2: Our data is more vulnerable in the cloud.

Security rests on your shoulders with on-premises systems. If your network security fails, you miss an update, or you store data in an unsecured location, your data is open for attack. From the cloud, security experts protect your data, 24/7, with redundancy, from secure data center locations. Reality: Your data is safer with the right cloud-based solution.

Myth #3: New software won’t integrate with our systems.

What accounting departments really need are a second set of hands and another set of eyes to re-populate data back and forth between their software and their other department’s software. This is a big productivity bottleneck. The best cloud accounting solutions like Sage Intacct design their products to integrate. Reality: Strong cloud accounting solutions can integrate well with many other solutions.

Myth #4: Our multi-entity financials are too complex for cloud systems.  

Multi-entity companies may actually be holding themselves back from faster growth with on-premise software. With QuickBooks Enterprise, for example, users have to log in and out repeatedly to manage separate companies, then export into Excel, spending endless hours formatting. This slows productivity, data sharing and growth strategy to a halt.

Sage Intacct accommodates multi-entities, with easy new entity set-up, currency conversions, and one-click global consolidations all in one place, exporting directly into excel. Reality: Multi-entity companies can work faster, build solid growth strategy and bridge the financial gaps between entities with the cloud.

Myth #5: We won’t have control of cloud-based financials.

Sage Intacct offers a unique tagging feature to make your complicated charts of accounts easier to organize and detail out for faster monthly reporting, and cleaner audits. Data is always current, always accessible, and options can be deeply customizable to optimize your company’s financials. Reality: Companies using strong cloud accounting systems actually have more control over their data, than with on-premises systems.

Myth #6: We’re a growing business – we don’t have time to switch software.

Many customers, like Legacy healthcare, migrate easily to Sage Intacct with their time-saving templates, quick importing options and strong training. Migration time balances out in time saved by ditching mountains of spreadsheets, speeding up reporting, book closings and consolidations, and simplifying charts of accounts. Reality: If you’re a growing business, this is the BEST time to move to the cloud.

Let us show you how easy your transition to the cloud can be, with the right financial management solution, like Sage Intacct, and ongoing support from our team.

Article Dean Dorton

Essential Financial Management Practices of Biotech Companies – A 5-Part Series

Article 5 – Prepare to Scale with Cloud Technology

The growth trajectory for biotech companies is unique – years of research followed by fast expansion with the success of a product.  Cloud technology is well-suited to scale quickly to meet those changing needs.

Positioned for success today and beyond

Technology played a huge role at the end of the 20th Century and has been accelerating innovation in the 21st Century.  Perhaps the most under-appreciated aspects of today’s technology are how easy it is to use.  Consider how much technology and useful applications reside on your smartphone and within your home.

But what about the workplace?  Is there a technology gap in your biotech organization?  Often cutting-edge technology is used in research and development while, in sharp contrast, archaic manual processes, outdated legacy systems, and spreadsheets are used in the accounting department.  What’s wrong with this picture?

Sage Intacct describes the benefit of their solution this way, “tomorrow’s innovative technology to make your today easier.”  The best result of technology addresses complex problems in a simple but effective way.

However, it’s not enough to simply address today’s problems.  As CFO, you know you need to be planning for the future. Any investment in a financial accounting solution should result in the automation of repetitive processes to increase productivity but also free up your time to prepare for future challenges.

Modern cloud architecture to scale with your growing Biotech business

The word “agile” is not a corporate-speak buzzword for Biotech CFOs – it is a way of life.  As you manage the financials from one funding milestone to the next, you must move quickly, and forecast confidently and correctly.

Inaccurate or delayed financial information threatens the success of the business.  You know this more acutely than anyone else in the organization.

“The reason I recommend Sage Intacct is that it immediately gives Biotech CFOs real-time financial information, but more importantly, a means by which to automate processes that are a waste of the CFO’s time,” explains Philip Massey, CPA and founder of Massey Consulting.  “Last century a best practice was to ‘delegate more.’ Today, best practices urge company leaders to ‘automate more.’ It’s amazing how much changes for the better when a CFO is able to automate even one workflow. As their technology partner, we look to automate as many processes as possible, which gives back precious time allowing CFOs to do more strategic work.”

Functional agility with minimal disruption

The reason businesses are flocking to SaaS models are many;  anytime, anywhere access; higher ROI, lower TCO, a shift from variable OPEX to fixed CAPEX – but also the ease at which SaaS financial accounting can be implemented.  As a noted in an article on the Tech-Savvy CFO, “solutions can be configured and re-configured with clicks, not code, and software can easily ingrate with other best-in-class business systems.”  

The net result:  you are empowered with modern technology, the best accounting features, real-time reporting, and state-of-the-art dashboards with little, if any, disruption and without a hefty investment in personnel or IT costs.

When the time comes to expand, merge, and/or move from a funded model to a revenue model, the configurability of Sage Intacct makes it easy to add new users, new business units, and new software modules.  Again it comes back to the SaaS delivery model which allows you to manage sudden increases in users and transactions, without having to worry about upgrading servers or network infrastructure.

Choose wisely – why Sage Intacct is the experts’ choice

“Biotech CFOs, CPAs and auditors sit up and take notice when I point out that Sage Intact is the only AICPA-endorsed solution for cloud financials,” notes Massey.  That endorsement, combined with the deep functionality that allows Biotech organizations to streamline complex accounting and finance processes.

Given that everyone in the organization wants to see projects completed with a minimum of funding diverted for administrative operations, Sage Intacct’s track record of documented rapid payback and meaningful ROI makes it an attractive option. “Sage Intacct is committed to customer success and they track and report on customer ROI,” said Massey.  “The published statistic is that Sage Intacct customers enjoy, on average, a return on investments of over 250 percent. With the average payback period just under six months. At Massey Consulting we understand that these results may vary. We work with Biotech CFOs and based on their specific situation calculate what they can expect. It’s remarkable just how quickly Sage Intacct pays for itself.”

Massey notes that it’s hard to overstate the positive impact Sage Intacct has for Biotech leadership.  “They have greater visibility, faster analyses, and real-time reporting for smarter business decisions.”

Sage Intacct can also make an impressive boast when it comes to customer satisfaction.  Third-party surveys show Sage Intacct out-performing the other leading brands (both on-premises and Cloud) in overall customer satisfaction.  

“Another area where Sage Intacct outshines the competition is in ease-of-use,” concludes Massey.  “If a solution is not easy to use it delays ROI, frustrates end users, and chews up time. The design of the software makes it easy to learn and users are quickly proficient, leveraging the solution at an optimal level.”

This concludes “Prepare to scale with cloud technology,” part 5 of the Essential Financial Management Practices of Biotech Companies series.  

Click on the links below to read other parts of the Essential Financial Management Practices of Biotech Companies series:

Part 1: Track Costs with Project Accounting

Part 2: Automate Batch/Lot Tracking to Ensure Traceability

Part 3: Support Flexible Reporting, Forecasts, and Budgeting

Part 4: Streamline Business Processes

Article Dean Dorton

Essential Financial Management Practices of Biotech Companies – A 5-Part Series

Article 4 – Streamline business processes to ensure compliance, accuracy of information and insight

It can be a long and challenging path from drug design to marketing products; from proof of concept to scale-up to market.  With the many uncontrollable factors that play a role in your project lifecycle, it’s important to control what you can.

You can mitigate risk by streamlining business processes with today’s technology to ensure compliance when you: systemize processes; support consistent documentation; and ensure consistency through expansion.

But the other key benefit of using technology to automate and streamline processes is that CFOs can spend more time communicating and advising stakeholders (CEO, R&D teams, investors, etc.) on the many decisions they need to make and the actions they take – from pre-revenue, through funding milestones and on to IPO or acquisition.

Up-to-date but always looking ahead

There are unique accounting challenges and pressures for Biotech CFOs.

As Thomas H. Fagley, Partner at Hughes Pittman & Gupton, LLP explains, “Biotech CFOs have to communicate and manage relationships.  It’s important to have a good relationship with the board and investors, as well as your CEO and R&D Team, communicating financial information to them on a timely basis, keeping them up-to-date on the financial status of research and development programs and identifying budget variances in a timely manner.”

“The Biotech CFO needs to make sure that the cash forecast sufficiently addresses the short-term and long-term funds necessary to get the project to the next financial milestone or development milestone that may potentially trigger additional investment,” notes Fagley.

Questions from stakeholders need to be answered quickly with accurate information.  “A delay of even a day or two can have serious implications on the forecast and project momentum,” notes Philip Massey, CPA and founder of Massey Consulting.  “In order to have meaningful communication with stakeholders, a CFO must be armed with real-time, accurate data.”

If questions arise surrounding the data (and they usually do), the CFO must be able to quickly drill down to the details to find the answers.  “If a CFO doesn’t have the right ERP system, has information stored in discrete system silos, and must answer stakeholder questions with ‘I’ll have to get back to you’ – it means that time, and possibly funding, is being squandered,” says Massey.

Timing and funding – striking the crucial balance

As the CFO and stakeholders review forecasts and the progress of research and development, the need for additional funding can arise.  The stakeholders then need to determine what kind of funding would be preferable for both short-term and long-term goals.

“They may determine that they’d like to take non-diluted funding in the form of a government grant or the licensing of some of their technology,” says Fagley.  “There are pros and cons that have to be considered with an eye toward maximizing the investor’s return on investment.”

“Not only does the CFO have a unique counseling role, but he or she will also be responsible for tracking and reporting on each funding source,” explains Massey.  “Suddenly it becomes clear how necessary an ERP Accounting solution is when it excels in project accounting, can track multiple sources of funding to the satisfaction of the funders, will facilitate online approval processes, and automate repetitive accounting processes.”

It all circles back to access to timely accurate data as the foundation of success.

“If you have a timing delay,” warns Fagley, “usually it means the development is going to cost more.  Being able to have information quickly and being able to effectively communicate that to the board and investors, is key for Biotech companies.”

Look to automation to keep administration costs lean

Prudent use of funds is paramount throughout the stages of development.

Administrative functions like accounting are not desirable places to make a significant investment in personnel – most biotech would prefer to funnel funds into researchers and clinicians in the pre-revenue phase, and marketing and sales after the IPO.

“For that reason, investing in financial accounting software has a better ROI than bringing additional administrative headcount on board,” says Massey.

Full speed ahead

As more employees and investment partners join the organization to support growth, biotech companies need to formalize business processes to ensure consistency.  Without a unified platform to coordinate activities across the organization, the effort is piecemeal with critical steps left to chance.

With modern, integrated business management systems, you can connect new users, new locations, and new lines of business to support growth.  Drive consistent processes across business units and locations to promote compliance and profitability.

This concludes “Streamline business processes to ensure compliance, the accuracy of information and insight,” part 4 of the Essential Financial Management Practices of Biotech Companies series.

Click on the links below to read other parts of the Essential Financial Management Practices of Biotech Companies series:

Part 1: Track Costs with Project Accounting

Part 2: Automate Batch/Lot Tracking to Ensure Traceability

Part 3: Support Flexible Reporting, Forecasts, and Budgeting

Part 5: Prepare to Scale with Cloud Technology