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Tackling the Top Challenges in Finance and Accounting at Silicon Valley Companies Today

Small or large, private or public, companies all around Silicon Valley are facing many of the same challenges in finance and accounting today. These issues can affect morale in the finance team, prevent the company from getting at the information it needs to advance the business, and hinder the company’s growth. They’re not all surmountable overnight, but their impacts can be minimized if they’re given due attention.

Crushing Workloads Conflict with Efficiency Mandates

Often motivated by the need to reduce costs as well as the need to focus on high-value deliverables, companies are on a constant hunt to streamline processes and drive efficiency. At the same time, we see a lot of companies with very bright, knowledgeable and capable employees who are buried under a hefty backlog with no easing in sight.

How did they get there? The reasons vary: They may have been brought in when the company was in a crisis mode, which hasn’t let up. Or the company’s growth has outpaced the finance department, which has been under budget constraints that prevent hiring. Or, as we’ve seen with many companies, it’s been a perfect storm of extra projects that all hit at once—such as the back-to-back adoption of the new revenue recognition and lease accounting standards, and related systems implementations that went along with that. No matter the reasons why, the team feels behind—never mind trying to make progress on improving or streamlining processes.

Unfortunately, sometimes it’s simply a matter of not having the right staff to handle the work—we’ve seen underappreciated individuals perform heroic acts to hold things together as long as they can until they finally quit. Only then does the organization wake up to the workload the person was under and responds with three new hires. How much better would it have been to address the issue before the original employee burned out and left?

Rapid Changes in Technology

Emerging technology trends bring the potential for greater efficiencies and better access to critical information—along with the need to stay on top of what’s new and how the company can adapt. Automation of manual processes and moves to cloud-based ERP systems require a shift in traditional ways of working while vastly improving the timeliness and reliability of essential financial data. Artificial intelligence tools making their way to the market could transform the way finance teams operate, from how we reconcile documents and conduct reviews to realizing increases in productivity levels.

Evaluating the latest in technology should have a regular spot on the finance team’s agenda. Think about whether you are using your existing systems to their full potential. Are they being optimized to help streamline your existing processes? The things that worked great five years ago might be out-of-date today. Sometimes bringing in a third-party resource can help identify ways to streamline and make better use of existing technology. 

The War for Talent Rages

The battle for finance and accounting skills and specialties continues, and there are no clear winners emerging. Companies keep looking for top talent to add to their team—employees who can think strategically, uplift the department to a higher level, leverage use of technology to automate and innovate, and who possess deep subject matter expertise. It’s a tall order for any one person to meet in the traditional, full-time workweek.

Flexibility in expectations can raise the talent of the team. It also makes sense to remain flexible to handle fluctuating workloads, and supplement with particular skills and talents when you need to. It might be the perfect time to supplement some skills for special projects and invest in training to raise the expertise of your talented team already in place.

How to Move Forward in Finance

So what’s our best advice for how to tackle these challenges? First, assess the situation and find the blockers. Carve out some time to really analyze your top bottlenecks and blockers in the finance department. Find out what is preventing you from delivering high-quality, value-add information right now. Are your business plans rooted on information that is not as credible or reliable as it could be?

For a bogged down department or an inefficiently run company, there may be little time for innovation or meaningful streamlining. If you are struggling just to get your books closed, there’s a bigger problem underneath it all. Oftentimes there are process issues upstream that just float downstream until they land in accounting. Take a look at the entire process to see if a bigger discussion is in order that may involve more than the finance team. Maybe the issue is trying to work with data from various sources that need to be reconciled, integrated or somehow manually manipulated. Investigate the spreadsheets—how many are you using to manage data and book your entries?

The answers to that could be a combination of staffing and technology issues. As you get at the root causes of the department’s issues, you may find there are opportunities to automate manual processes, harness improvements in technology or bring in another level of finance expertise. Sometimes you have to make an investment before you can see results.

As for the talent wars, sadly, we don’t have a magic bullet for that one. We find it gets harder and harder to find those “unicorn” employees who can do it all. They do exist, but they are really hard to find. So, companies may find they need to build today’s flexible team—hire someone with a reasonable financial foundation, and invest in training and upskilling the staff you do have. Our finance pros have stepped in to help companies wrangle the workload while helping to raise the level of the team in the process.

Despite the many differences among companies at various stages of the business lifecycle, they deal with common challenges in finance and accounting operations. We experience it firsthand as we help a range of fast-moving Silicon Valley companies face a host of new situations. We see it when we are consulting emerging growth ventures on a high growth trajectory and with midmarket companies grappling with a recent M&A change and new regulations. And we see it in large enterprises dealing with ever-increasing volumes of data from disparate sources, spinning out parts of their business and acquiring other firms.

Armed with ideas for finding and fending off the blockers in finance, the team can push through their latest challenge—until the next one comes along.

Pat Voll is a vice president at RoseRyan, where she provides strategic guidance to several practice areas, including corporate governance, strategic projects and operational accounting. She also manages multiple client relationships, develops new solutions for the firm, and oversees strategic and corporate culture programs. Pat previously held senior finance level positions at public companies and worked as an auditor with a Big 4 firm. 

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Conquer complexity: Get briefed on the latest accounting updates

In the accounting world, the rules are ever changing. Large in scope and long awaited, the new rule for recognizing revenue continues to get clarifications in the months leading up to its effective date. The new leasing standard is finally here as well and sharing the attention. Those are just the biggies—the Financial Accounting Standards Board has been coming out with a flurry of changes in recent months, and regulators are paying attention to what you are doing with them. There’s a ton of information to follow to stay compliant.

How equipped finance teams are to keep up with all the moving parts varies quite a bit. They oftentimes find it beneficial to lean on technical accounting experts who can decipher the never-ending landscape and help with interpretations. Such experts can help them stay on track in understanding the latest accounting refinements, transition-method choices and effective dates. Diana Gilbert, senior consultant at RoseRyan and head of our Technical Accounting Group, helped many companies get up to speed during the June 2 webinar, “Demystifying the Latest Major Accounting Changes.”

This fast moving, 90-minute, all-out binge covered the latest twists and turns that have come out from FASB and regulators over the past year. Some changes have simplified things. Others will have a narrow effect. And many will force finance teams to do some soul searching as the deadlines near. Contracts and compensation plans may need to be revisited.

Diana filled in listeners (most of whom were from life sciences and technology companies) on the five topics below, along with other changes, and gave timely advice along the way.

Revenue recognition: Companies that don’t have a game plan for the new revenue recognition standard are running out of excuses. The SEC has been “aggressively” referencing the new rule in recent speeches to let companies know they will be watching what gets said in disclosures, Diana said. Boilerplate, vague language won’t cut it much longer.

“This has been out there since 2014, so they are going to question why you’re still evaluating it now,” she said. “If you’re honestly, sincerely evaluating it, then just be prepared for the questions. But if you’ve done your evaluation and pretty much do understand the impact, then think about including more detailed disclosures, particularly about decisions you’ve already made,” such as the transition method the company will be taking and the planned adoption date.

Leases: The new standard finalized in February will bring what we refer to as operating leases today onto the balance sheet. The rule applies to leases of property and equipment with terms of at least one year and centers around the lessee’s “right of use” of an item (the obligation to pay for that right is what will appear on the liability side of the balance sheet).

The new rule could change behavior, Diana predicted. “Think about it. If you’re going to have it on the balance sheet anyway, are you still going to lease it or would you buy it outright?” she said. “You might create new forms of leases that are clearly less than a year, without the option to renew, and you’ll have to deal with the issue every year. That may make sense for inconsequential arrangements. It will be interesting to see what happens going forward.”

Financial instruments: Public companies will begin following new rules on classifying and measuring financial instruments for filings submitted in 2018, and private companies will do so a year later. Equity investments that are not consolidated are generally going to be measured at fair value through earnings. In some ways, disclosure requirements have been simplified with the rule changes—companies won’t have to disclose their methods and significant assumptions for estimating fair value—and in other ways they have expanded.

Stock-based compensation: Companies have “a grocery bag of different changes” to deal with when it comes to improvements to employee share-based payment accounting, Diana warned. The most significant relates to deferred tax assets. When the changes take effect, companies will no longer record excess tax benefits and certain tax deficiencies resulting from share-based awards in additional paid-in capital (APIC). APIC pools are eliminated under the changes.

Diana said this is a “huge simplification” in terms of tracking share-based compensation, but the downside is the potential for more volatility in the income statement. This particular change is applied prospectively from the date of adoption (which begins after December 15, 2016, for public companies).

SEC comments: The SEC staff has always tended to question areas that involve judgment and subjectivity, Diana noted. In recent years, in particular, they have been scrutinizing the statement of cash flows and whether companies’ internal controls are effective. Diana recommended that companies be as clear as possible and use tables and charts to help tell their story.

“Comment letters come about because they don’t understand what’s happening,” Diana said. “Or it’s a complex area and they’re going to ask you questions whether you like it or not.”

Keeping tabs on regulators’ areas of emphasis and accounting standard-setters’ changes takes time and effort. Things are in constant motion, and companies need to stay on top of it all. That’s how they can help minimize the questions that come from regulators and any uncertainty that may arise during implementation. To save time and effort in understanding the latest accounting standards (changes through June 1, 2016), feel free to check out the 90-minute replay of “Demystifying the Latest Major Accounting Changes” here.

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Superstar controllers need technical chops and so much more

Job interviews with controllers—whether you’re in the hot seat or the one asking the questions—are getting broader these days, as the role of the controller and expectations around it have escalated. Just as today’s CFOs are expected to be more strategic than the bean-counting finance chiefs of yesteryear, so too are controllers getting called upon for their operational skills and are expected to have broader, forward-looking views. Today’s controllers are not all about past figures. They contribute to strategy to guide it into the future.

We see this transformation firsthand whenever we’re embedded in teams at companies around the San Francisco Bay Area, and we’ve frequently taken on controller roles on an interim basis. RoseRyan consultant Cheri Koehler—a superstar controller in her own right—has gathered up some practical tips and advice for controllers at companies of all sizes:

RoseRyan_Report_SuperstarControllerLook beyond the numbers: Controllers who have mastered their role have a firm grasp of their company’s latest facts and figures, and they also need to be able to tell the story to everyone else. They are one of the few who can provide context behind the numbers and use their knowledge to ensure the company stays healthy. That knowledge can power smart decision-making throughout the business.

Be a bridge builder: Controllers have typically been buddies with HR and customer service folks as many of their transactions and activities overlap. Extend similar connections around the company, making links between finance and IT, procurement, distribution, manufacturing and others. In this way, controllers can set up collaborative partnerships and give themselves a voice when choices are about to made. As proactive business partners, they keep finance in the loop and provide valuable support, advice and analysis whenever it’s needed.

Find and keep talent: This requires a continuous effort—even when the finance team seems well stocked. Things can change and specialized skills may be needed for a complex transaction or someone could have to leave without much notice. Superstar controllers regularly tend to the talent pool by always keeping their connections open and paying attention to develop and retain the people they have on hand. They look for opportunities to empower the team and keep them enthused.

Stellar controllers know how to bring the information they gather to life. They’re excellent communicators by making sure they can influence and persuade, they help with strategic decisions and activities throughout the company, and evangelize potential improvements and efficiencies. What makes this possible? They are up to date on the latest technologies and can keep their eyes and ears to the ground to learn best practices in their field. Ensuring they have a talented team in place makes all the difference.

Are you a controller striving for greatness? Or a CFO who needs to strengthen the finance bench? To understand the controller role today and what skills are needed for superstar status, check out 5 ways to become a superstar controller.

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The CFO juggling act of managing resources

A crazy sprint in the middle of a marathon would leave anyone gasping for oxygen. It’s not sustainable. Go too fast and there’s a risk of real burnout. Then again, go too slowly and there’s the risk of a competitor catching up and taking away your lead.

Sound familiar? Companies are always in the turbulence of growth, whether they’re chasing after it or striving to complete a mega transaction, like an IPO. And CFOs are at the helm of it all. On top of all the roles that they already take on at their company, finance chiefs are also guiding the velocity. Are they deploying the right amount of resources, or are they expending them much too quickly? Thoughtful growth is the secret.

RoseRyan director Stephen Ambler, who has served as CFO in several companies, shares his wisdom about the essential areas in finance that need the close attention of senior finance executives. These include:

Cash flow: Finance organizations can’t afford to look away for a minute. Literally. In RoseRyan’s latest intelligence report, A CFO guide for managing resources, Stephen relays the tough squeeze one company fell into when it lost a grip on its cash position. Sounds unbelievable, but it does happen, and it can sink the ship.

Growth strategy: The pace of growth is not always something the company can control, but a realistic forecast and deliberate path should be developed—wild guesses have no place here.

Talent: It’s about timing and understanding that you get what you pay for—even with people. That includes knowing when hiring junior-level employees does or does not make sense. Having the wrong mix of people may actually cost the company more over time. And today’s world is all about outsourcing. Know when to bring in the ninja team to get things done in a tough, overflow situation.

Upgrading systems: Get a sense of when the company has outgrown processes and systems (QuickBooks can be awesome as a small-business accounting program but an upgrade will be needed when the company has the public markets in its sights). Are the systems in place scalable and appropriate for the company’s size and complexity? If not, it might be time for an upgrade.

Managing resources well is an ongoing effort. No matter what size company or how fast you are growing, the same essential best practices will help you to stay in control of your financial situation. Be the steady hand at the helm. Along the way, don’t hesitate to lean on trusted advisors who can help you over the finish line.

Is your company galloping ahead without a well-centered plan? Or are you too conservative in your spending approach? To understand growth path considerations, check out A CFO guide for managing resources.

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How fast is your monthly close process? Better take a look at it.

Ask a finance team how quickly they can pull off closing the books, and you’ll likely get some groans in response. Chances are they want to be faster but something—or many things—are clogging up the works. Inefficiencies have crept up along with trails of approvals and sloppy systems that have not kept up with the times. Errors and frustrations abound.

The result: a financial close that lasts for weeks and makes everyone involved sweat from forehead to chin until it’s over. And even then, no one’s happy. “Outdated and inaccurate financial information can lead to bad decision-making,” warned RoseRyan Senior Consultant Susan Wong during a recent Proformative webinar with Intacct Principal Sales Engineer Linda Pinion.

Both speakers offered ways companies can improve and accelerate the close process to get up-to-date, accurate information flowing, to feed the need to make smart decisions and provide the kind of real-time data craved by senior leaders.

There’s another sweet effect too: an improved close can free up the finance function, giving the team time to assist on other meaty matters, like analysis, strategy and planning. A faster, better close sets up the finance organization to be more efficient and responsive to the changing tides of business, according to Wong.

To see what’s mucking up the close, companies need to take an eagle-eye view of the key pieces involved. “If you have the right people, processes and systems in place, it will help you get closer to realizing the dream of the daily close,” Wong said. Below are just a few of the tips Wong and Pinion offered during the webinar.

Focus on the folks

“Your financial close is only as good as your people,” Wong said. “It sounds like a commercial, but it’s true. It’s all about having the right talent.” Is everyone involved in their own world? Rein them in by establishing well-defined roles and responsibilities. “Each participant should know exactly what needs to be done and when,” Wong said.

Track the close cycle time and errors that occur as part of the team’s KPIs to incentivize employees to keep learning and improving, she added. A backup plan is another smart move; by cross-training everyone and having contingencies if someone leaves or gets sick, the process won’t get stuck on just one person and will be more likely to run smoothly.

Step up the processes

Is the word “process” laughable when it comes to getting a close done at your company? Wong said most companies have informal processes that are not documented—and risk getting forgotten if someone leaves the organization. Documented, formalized processes will not only help the exercise of closing but can lead to satisfied auditors who are looking for consistency.

Have a financial close calendar accessible to everyone so they can plan around the dates. And have a checklist that includes all closing activities, such as updating depreciation, getting the inventory count and reconciling bank statements.

Review the systems

Is the company stuck in its Excel ways? Wong loves Excel as much as anyone in the finance and accounting world, especially as an analytical tool, but for accounting purposes, it can slow things down. Some companies are stuck with manually entering the same data into multiple spreadsheets—and risking mistakes with each entry. Others are still matching invoices and purchase orders by hand. Automation can quicken the pace and improve accuracy. “We know from our talks with CFOs that this is number-one on their list,” Pinion said. “They want to be able to streamline and automate processes within their organization.”

Automation can turn companies that have a vague idea of how they’re doing in the moment into a real-time data machine. “Visibility is in my opinion the key to accountability,” Pinion said. “If you’re responsible and you need to be accountable for these closings and these reports and documents you’re preparing, one of the first things you need is visibility to that information.”

Wong said most companies should take less than five days to close, and some may need more time if they need to consolidate. Sound like an out-of-reach figure for your company? Keep in mind that finding and resolving issues as the business trucks along with its daily transactions should occur outside of the close. Could the one-day close ever become a reality? Not at the moment for most companies, but the help of new technologies and streamlined processes could get them closer to seeing it happen at some point.

Even large businesses, organizations rife with complexities and teams that are mired in unwieldy spreadsheets, can get to where they need to be—an accelerated and smooth process. The fact is it is an ongoing process, with room to improve month over month. Wong suggested doing regular reviews and looking for ways to improve at every turn. “Track accomplishments and setbacks during the close,” she said. “We can all learn from our accomplishments and mistakes.”

With higher visibility, the finance team can provide senior leaders with more reliable metrics that they can use to pull the trigger on smart decisions. And that should mean less sweating all around.

Did you miss the webinar? Click here to watch Realizing the Dream: The Daily Financial Close Is Becoming Reality.

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Meet the Boomerang Bunch: 5 RoseRyan alumni return home

RoseRyan is thrilled to welcome back five finance aces who worked with us earlier in their careers. In the time since their last stint with us, these returning employees have sharpened their skills and gained new insights. They’ve worked at high growth, fast paced companies, experienced acquisitions firsthand from the inside, and had amazing, once-in-a-lifetime travel opportunities. And now they have come back. Why? To experience the positive points of the consulting life.

Who knew we’d have five RoseRyan alumni coming back out of the corporate world during an all-out talent war. We are pleased as punch to get these savvy finance pros back in the fold.

We’re not the only ones getting reacquainted with some all stars. In a survey of over 1,800 HR professionals by The Workforce Institute at Kronos Inc. and WorkplaceTrends.com, 85 percent of respondents said former employees have sent them job applications over the past five years, and 40 percent said about half of those former employees were hired. Taking back “boomerangs,” the report revealed, didn’t used to be so common, but has become more acceptable for industries in the middle of the battle for talent.

A big draw for any of our consultants is the variety of assignments at high tech and life sciences companies, the ability to jump in and actively grow a company, the latitude and individual autonomy to get things done, and a predictable schedule so that they can have a life. It’s OK to actually take vacation, spend time with their families and tend to their hobbies, we think. Not many companies think that way. It also helps that we’re an award-winning firm that our employees believe is headed in the right direction—evidenced by our earning a coveted spot on this year’s Top 100 Workplaces list in the Bay Area.

So who’s returning? We’re delighted to re-introduce these folks: 

LIZ BARCLAY

An expert in SEC reporting, technical accounting, SOX, revenue recognition, M&A and international accounting, Liz left us for several years for some exciting international assignments and adventure. She worked the SOX front at Maxtor. Liz was also the SEC reporting manager, SOX manager and AP manager at Power Integrations, most recently handling SEC, accounts payable and international due diligence work in the United Kingdom and Switzerland. “I was drawn to RoseRyan for its work/life balance and more flexible work options,” she says. “Consulting leverages my career’s wide and deep experience while giving me the opportunity to make family events.”

LYNN CHRISTOPHER

Lynn first got to know RoseRyan as a client, when she was the controller at Blue Coat Systems. She’s joining us after an eight-year gap with a solid résumé of controllerships at Force 10 Networks, Responsys and most recently Adap.tv, which was purchased by AOL. Lynn is a force to be reckoned with when clients need revenue recognition expertise, SEC reporting help or assistance going IPO. 

CLARISSA ENANY

With audit prep and technical accounting among her top talents, Clarissa gives the rest of us a reason to visit the Seattle area, her home base. A KPMG alum, she most recently was the assistant controller at DocuSign, where she managed the month-end close process, accounts payable and payroll. Clarissa was with us for over three years taking on SEC filings, stock-based compensation work, and assignments for our Technical Accounting Group. “I love having the opportunity to work with multiple clients and see a variety of issues each week,” Clarissa says. “My work with RoseRyan allows me to spend time with my family while maintaining my professional edge in accounting.”

LAURA MAGALLON

Laura brings a mix of senior leadership thinking and nitty-gritty accounting expertise to everything she does. Since her first consulting tour with RoseRyan, she has held VP of finance and controller positions, and she has fine-tuned her passion for startups and newly funded companies. She loves setting up financial structures and ramping up companies from the start to grow phase of their lifecycle. Laura’s specialties include the month-end close process, FP&A, accounting systems, SOX, revenue recognition and audit prep. What brought her back to us? She loves the flexibility that comes with being a consultant plus the benefits package we provide our gurus. Plus, the camaraderie and support she gets here can’t be beat. “I really like working for Kathy Ryan—she’s a great boss and mentor,” Laura tells us. “And we have a great team of consultants!”

SUSAN WONG

Susan was here at RoseRyan from 2007 to 2012, working closely with startup clients. She knows the controller and CFO roles inside and out for both small businesses and midsize companies. Her expertise includes cash flow management, audits, business strategy, budgets and debt/equity financing. To top it off, in her spare time she teaches finance at UC Berkeley Extension and Menlo College, where she is an adjunct accounting professor.

All of our seasoned pros want to stretch and grow professionally. We love to provide them with a variety of assignments and challenges to help them do just that. They strive to stay on top of their game. They have found a supportive place in RoseRyan, where we have a healthy learning and development focus, an enviable list of clients, and our culture is known for being friendly and respectful, and for doing the right thing. No sharks here!

Sure, we’re always disappointed if a consultant jumps off for a hot corporate job. But we’ll be here to welcome them back.

LI profile pictureDoes RoseRyan sound like your kind of place? We are hiring! Check out our current opportunities here. As Talent Manager at RoseRyan, Michelle Hickam is always looking for finance and accounting pros who have strong technical chops as well as “soft skills” for melding into our clients’ corporate cultures. She’d love to hear from potential candidates. Email her at [email protected].

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View the finance work around the IPO as a marathon, not a sprint

Going public takes endurance. The whole process—from the decision to go IPO, to the S-1 filing and the roadshow, to the first day of trading and then the post-IPO phase—usually takes longer than expected and puts a major strain on resources. It takes mental strength and stamina to power through the several years before and after the transaction if you do it right.

It’s understandable why so many executives want to take a great big breath when they get past what they view as the finish line—the day the initial public offering is made. But they’ve got to keep going toward the next milestones and transition to truly operating as a public company, as noted by the experts who participated in RoseRyan’s recent webinar, “Smooth Sailing for a Successful IPO.” Senior Consultant Diana Gilbert, who leads the Technical Accounting Group at RoseRyan; Matthew Rossiter, Partner at Fenwick & West LLP; and Susan Berland, Consultant, Finance & Strategy offered up a lot of advice and warnings in the one-hour session aimed at companies contemplating or going public.

“Everybody’s excited, you rang the bell and you feel relieved,” Gilbert said. “You think, ‘Oh my gosh, this sprint, this crazy thing, is over.’ But the reality is you’re actually in a marathon. You’re not in a sprint. Now you’re in a public company.” There’s a lot more to be done.

The run to each milestone doesn’t have to be sweaty and messy. Companies can move forward in a cool and collected way (although, to be sure, there will be some bumps: Download our report The IPO Journey: 6 Potential Obstacles to Avoid for a Smoother Trip to see what we mean) with some best practices tucked into their back pocket.

Here are just a few takeaways from the webinar:

Start early. Decisions can be made in the very early days of the company’s existence that can set everyone up for an eventual IPO. This means nurturing the kind of culture that highly values accurate information and keeps documentation in order. If certain systems are in place and certain ways of doing things are the way of company life early on, that will make the transition easier if an IPO does indeed become part of the company’s plan.

Instill smart habits. Before going public, finance teams should adjust to tighter reporting turnaround times. They can work out the kinks before meeting deadlines becomes an SEC mandate. They’ll need to streamline the close process and begin getting used to recording the work that they do—not just the results.

“Remember a lot of private companies now going public don’t have people who have been through the Sarbanes-Oxley process,” Gilbert said. “They’re not in the habit of documenting everything they do, so while they may be doing it, there’s no evidence of it.”

Know the timeline. Because of the JOBS Act, many companies get some breathing room when it comes to adjusting to all the regulations they’ll be subject to once they get over the first going-public hurdle (most notably, the requirement that auditors attest to management’s review of internal controls, aka SOX’s Section 404(b)).

“Essentially all high-growth IPO companies right now are ‘emerging growth companies,’” Rossiter said. “Any private company with less than $1 annual billion in revenue will be eligible to be an emerging growth company, and will remain an emerging growth company until the fiscal year ending the fifth year after IPO, or potentially sooner when one of several financial triggers hit,” such as the company becoming a large accelerated filer, with public float of more than $700 million.

Anticipate problems. There will be mistakes along the way as the company ramps up to go-public status, and that’s why building in time is essential. “I usually say it’s not whether the company is going to fail on some controls, it’s which ones,” Gilbert noted. “We need time to remediate and fix it and get things running really sleek and clean before you hit that period where you need to be compliant for 404, before you get the auditors involved.”

Want another great tip? Develop a solid finance team with buttoned-up processes and a drive for efficiency and integrity throughout the going-public process and afterward. It’s evermore important when the company has passed the IPO mark and is in the public eye.

“You want to have a solid, solid team in place and make sure that in the process of all of this you are doing things in a disciplined, careful way,” Gilbert said. “That you don’t take shortcuts and you get it right the first time. Because when you are communicating with the outside world, they are not very forgiving if you make a mistake and have to go back and make a restatement. That can be a big negative on your credibility.”

For more sage advice on crafting your successful IPO process, listen to the recorded webinar Smooth Sailing for a Successful IPO.

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On the road to IPO? 6 obstacles to avoid at all costs

All eyes are on you when your company goes IPO. Everyone, it seems, wants to know the company’s every move—its past results, its risks, its future projections. Working at a newly public company can make employees feel like they’re in a giant fish bowl with everyone swimming around and crashing into each other. Unless, that is, the company planned ahead for a bit of mayhem.

A new intelligence report written by RoseRyan CEO Kathy Ryan warns top executives of pre-IPO companies about six potential pitfalls that await them on the multi-year journey they’re about to undertake. These are obstacles along the IPO path that can easily sink a deal.

By being more aware of the potential problem areas, companies have a better chance at a better ride (it’ll be bumpy no matter what—as anyone who has suffered through the aftershocks of an IPO can tell you). They’re also likelier to achieve a tighter corporate culture on the other side, a reduced risk of public mistakes (like a messy restatement), and a realistic, satisfactory share price.

Kathy emphasizes in the new report, The IPO journey: 6 potential obstacles to avoid for a smooth trip, that going public is much different that actually being a public company. To do it right, companies should view the entire deal as having three phases—the IPO prep, the IPO process itself, and the IPO hangover of suddenly being public. Along the way they should stay away from the following missteps:

Avoiding the tough questions: Kathy reveals the hard questions that need to be asked, including whether the company is moving forward with the transaction for the right reasons.

Skipping the prep work: There are years of laying foundations before the journey gets into the S-1 frenzy, from getting the financial house in order to figuring out the key metrics that will be shared and how they will be expressed publicly.

Being unprepared for a big culture shock: Senior executives rarely consider the transformation employees are expected to go through as the company changes from an entrepreneurial mindset to the more disciplined, accountable organization of a publicly traded company beholden to new regulations. The culture can—and should be—managed during the IPO process.

Lacking the right talent at the right time: Just as the culture should be evaluated, so should the skills. To what extent can existing employees be trained to withstand the needs of a public company, and to what extent does the company need to look outside to fill in the skills gap? It’s better to wonder this as the company goes along—rather than risk overloading employees more than they need to be.

Being in denial about the IPO hangover: There is a hard truth about going IPO and it’s what happens on “Day 2,” the day after the IPO, when the company starts operating in a whole new world, and the next few years that follow. It is a tsunami of work. It takes awhile for everyone to adjust, for efficiencies to take hold and new processes to become routine.

Not actively managing the share price: Many executives think they cannot influence how investors perceive and thus value their company. But it is possible, with effective messaging by company leaders, who need to put themselves in investors’ shoes and hone their storytelling skills to speak their language.

Preempt the mishaps. Prepare the troops. And get ready for the exciting trip that lies ahead. Download The IPO journey: 6 potential obstacles to avoid for a smooth trip.

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How to earn a spot on the “Top Workplaces” list: 3 tips on employee engagement

Foosball tables in a company break room only go so far in fostering employee interaction and loyalty. If employees don’t feel a strong connection to their company, its future and their role in it, they’ll eventually step away from the foosball handles and polish up their résumés.

best_places_to_work_BANG_Portrait_2015_AWThis is a constant issue throughout Silicon Valley and San Francisco as well as our industry. In the midst of the talent war in the finance and accounting field, it is paramount to keep employees engaged and inspired. Well, we must be doing something right, as RoseRyan was just named to the prestigious Top 100 Workplaces list by the Bay Area News Group. Based on confidential employee surveys, the competition revealed that our team believes that RoseRyan has very strong organizational health and rate their jobs well. Overall, they gave the firm a big, fat thumbs-up.

Our team gave our organizational health very high marks, helping RoseRyan stand above the benchmark group in many respects. RoseRyan’s results were really high in the areas of overall strategy, ethics/values and confidence in leadership, and we achieved rave reviews in the areas of efficiency and execution.

What’s worked for us? Here are three hot tips we can humbly offer up:

Forge connections: Since our folks are predominantly out at client sites across the Bay Area and beyond, we double our efforts to keep people feeling connected with one another. Our setup has led to tight bonds among peers as well as between consultants and the client managers who oversee our engagements. Gurus who need some backup are able to quickly and easily reach out to the entire team, so the “collective intelligence” really comes to life. Teammates who know and trust each other can get things done so much more quickly than those who don’t.

And there are so many ways to stay connected. Technology helps break down the barriers of space and time, as text, chat, Skype, social, phone and email keep us connected. But those things have limitations. Real time spent face to face with people is always optimal. Lunches and happy hours with other employees, clients and partners are particularly fun for forging friendships and trading talk. These meetups are popular times to connect, sort through the business and swap great stories. Our volunteer activities with colleagues at food banks, childhood literacy agencies and backpack drives help support our community. The wine club, book club, fun runs and other activities are still more ways to give employees the chance to enjoy shared hobbies or a personal cause together.

Keep everyone informed: It’s important to actively manage the multiple streams of communication to keep the team up to date—such as email communiqués, videos, webinars, virtual fireside chats, all-hands meetings and social gatherings. Make it easy for folks to easily access all the material they need and know where to go for more. Every one of our managers enjoys chatting with employees live and over email for feedback, to gain input on strategy and to answer questions along the way—it is an open office world here, with genuine interest in hearing what’s on people’s minds.

RoseRyan employees feel well-informed about important decisions at the firm, according to the survey results, way more than their peers at other firms. Our employees believe that senior managers know what is really happening. The results were great to hear, because we work hard at developing a culture of open and honest communications.

Focus on execution: That sounds cliché, yet it remains so true. RoseRyan scored extremely high in overall execution, far outpacing firms we were benchmarked against. It’s a gratifying finding since that’s how we roll: we revel in jumping into fast-moving companies, picking the best practices that suit the situation, tailoring a few tools and melding it all together with our years of expertise from having worked with over 700 clients. By having swift and steady execution as a top priority and part of our DNA, we help clients move on to the next stage of the business lifecycle quickly and efficiently. Employees really relish the satisfaction of a job well done.

We’re thrilled to be named as a “Top Workplace” in the Bay Area. The recognition builds awareness, adds to our solid reputation and will naturally help our recruiting efforts this year. It’s a talent war out there, and the best candidates will gravitate to the firms that have leaders who lead, corporate cultures that inspire and truly live their values, and teams that work together like a well-oiled machine. That’s us.

For more information about the Top Workplaces in the Bay Area, see our press release. And to inquire about a career at RoseRyan, reach out to our talent manager, Michelle Hickam, at [email protected]. And just so you know, our workforce gets to work at some of the hottest Bay Area companies, so if you work with RoseRyan, you can still score the occasional foosball game.

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The 4 stages of the business lifecycle and how to recognize what you need next

Many companies tend to follow similar patterns as they adapt and change over time. The trajectory is known as the business lifecycle, and we’ve identified four particular stages that companies typically move through from beginning to maturity. Knowing where a company lies along the lifecycle is critical for truly understanding its current and future finance needs.

Like humans, businesses have a growth track they follow as well as a constant pull to reevaluate who they are and where they’re going. As companies grow from the small-business stage and expand and evolve into fully fledged ongoing enterprises, they have to adjust to increasing demands and the rapid pace of change around them. And they need to constantly reinvent themselves to stay competitive.

With all these points in mind, we constructed our view of the stages of the typical business lifecycle and the different finance challenges that occur at each stage. Is there a pressing need for a huge ramp-up? Could an IPO give the company the boost it needs, or will it remain private indefinitely? Companies go through existential crises all the time, from startups cobbling together basic funds and a tight team, to large public companies facing pressures at a global level. The lifecycle is a useful map for the potential future journey of a company, and can help evaluate whether the finance team’s resources can keep up with all the changes and demands.

Here is our take on the four stages of the business lifecycle:

Start: The first stage of growth involves balancing the fight for survival with getting the small business up and running. It’s just a few employees forming a solid team, gathering funds together and developing a sellable product at warp speed. Many startup companies haven’t gotten around to setting up their financial infrastructure yet. They may need to lean on outside sources before they bring on full-timers.

Grow: This is the time of building the business rapidly to scale. It’s all about managing high growth on this rollercoaster, and potentially chaotic financial messes. Many companies need to rapidly set into place new organized processes and systems to get their financial house in shape and ready for the prying eyes of investors, auditors and potential acquirers.

Expand: Here is when companies move on to a whole new strategy for growth and it usually involves a big transaction. They may buy another company, merge or go for an IPO. What’s missing at this stage at times is a plan for traveling through it and getting through the aftermath. Most companies underestimate the work and amount of change involved.

Evolve: At the fourth stage, the mark of maturity, ongoing businesses hit a barrage of change at every turn, from high pressure by competitors, investors and customers to unpredictable business crises. They frequently need to reinvent themselves to stay a winner.

What keeps companies in motion? It won’t surprise you to hear that I believe the success of any company rides a lot on the strength of its finance team. With a solid financial infrastructure in place and access to just the right talent at the right time, the company can keep humming and stay on top of all the requirements. By having a strong financial backbone, with efficient systems and processes, companies can focus on strategic changes that will push the business forward. Those are the ones best poised for success.

At RoseRyan, we reflect upon each client and where they are in the business lifecycle, to best anticipate what services they might need most. Companies appreciate our experience—having helped hundreds of companies through each stage—and trust us to get them through it quickly.

For more about how RoseRyan helps across the lifecycle, go here.

Kathy Ryan is the CEO and CFO of RoseRyan. Since co-founding the firm in 1993, she has served as interim CFO at more than 50 companies.

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