With Strategic Financials' help, this IT staffing firm was able to reduce financial operation systems costs to $82,400 a year to run-a whopping 66 percent cost reduction-compared to the $245,000 it previously totaled.
-Dom Black, CEO of Advanced Software Talent
Project |
Before |
After |
Financial Reports |
Delivered 2 weeks after months end with "C" accuracy |
Delivered weekly with "A" accuracy |
Month-end Close |
14 Days |
2 Hours |
Year-end Close |
42 Days |
2 Days |
Year-end Audit |
3 months, with many adjustments |
2 Weeks, with no adjustments |
Payroll Reports |
2 Days |
10 minutes |
Financial System Cost |
$245,000 |
$82,400 |
Strategic Analysis:
A prominent professional IT staffing firm needed to accelerate and optimize its financial operations system, as well as improve overall efficiency for the company. At that time, the firm employed four accountants to manage its financial operations. Even with this dedicated staff, financial reports were delivered two weeks after the month end with "C" level accuracy, and the year-end close required six weeks to complete. Equally disconcerting was the fact that the year-end audit took over three months to complete and required a dozen adjusting entries. As a result, the cost of running the firm's financial system was topping $245,000 per year.
The first step in improving the company's efficiencies and cost effectiveness was to provide a comprehensive audit of the firm's financial procedures . After a comprehensive audit of the firm 's financial procedures careful analysis , several bottlenecks were revealed including unnecessary manual entry/re-entry of data and an over reliance on the paper trail.
Solutions:
A number of strategic changes were made to help the firm save both time and money in their financial procedures. Based on the recommended new procedures, new software was installed and the following solutions implemented:
Activity |
Before |
After |
Timecards |
Collected bi-weekly via fax |
Electronic submission via the Web |
Payroll |
Manual entry into system from timecards |
Electronically transferred to Payroll System from timecards |
Payroll reports |
Hard copy |
Delivered electronically, automatically extracted and imported to the general ledger |
Payroll Checks |
Hard copy checks mailed to recipients |
Electronic direct deposit |
Invoices |
Printed and mailed bi-weekly |
Sent via e-mail bi-weekly, hard copy only sent when requested by customer |
AP |
Processed bi-weekly, checks cut, reviewed, signed and mailed manually |
Electronic payment made, hand written checks when required |
Expense Reports |
Hardcopy delivered manually, coded and entered into the system-manually approved |
Electronic delivery, automatically coded by the system, approved and paid electronically |
Cash Forecasting |
Not Done |
Weekly |
Results:
Once the proposed changes were implemented, the results showed significant improvement on the company's business and bottom line. In addition to increasing overall speed and accuracy to ensure real-time access to all of the company's key performance indicators, this client was able to reduce their financial department from four full time experts to one part time accounting professional to run the new and improved financial system.
Currently, the system is operating so seamlessly that all functions are handled remotely-saving additional costs. Weekly consultation meetings between Strategic Financials and the IT company's CEO and founder are all that's required to sustain the new, high level of financial control.
As a result of these measures, the financial operation system now costs $82,400 per year to run-a whopping 66 percent cost reduction-compared to the $245,000 it previously totaled. At the same time, the system has resulted in vastly improved performance-and near-instantaneous closes to the monthly books.
These results are not unique, but representative of the improvements strategic financial solutions can produce-especially in regards to optimizing the speed, accuracy, security and cost of creating the information required to actively monitor and manage a growing business.
