Controllers Council recently held a webinar on Scaling Financial Operations for Growth, sponsored by BILL.
BILL is a leading financial operations platform for small and midsize businesses (SMBs). As a champion of SMBs, BILL automates the future of finance so businesses can thrive.
Our expert panelist was Garrett Lent, Senior Account Executive at BILL. Our moderator was Joe Flesher, Webinar Content Marketing Manager at BILL.
Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.
What is a multi-entity organization? What are the typical scenarios in which businesses establish multi-entity organizations?
A multi-entity organization is simply an organization that has different entities set up. And this can be done a couple of different ways. NetSuite software is set up as subsidiaries. If you’re familiar with QuickBooks, they’re going to be set up as company files. But essentially, it’s different organizations all under one umbrella that work in Cohesion together.
There are so many different reasons why an organization can decide to expand and instead of expanding on their core single entities and branch out and open a new entity. Here are a few reasons why:
- Expansion into different markets or regions
- Diversification of products or services
- Risk management and liability mitigation
- Tax optimization and compliance
- Mergers and acquisitions
- Asset protection and estate planning
What challenges do finance teams encounter most often when establishing workflows to manage payments among multiple entities?
Acquiring a business or expanding into a multi-entity, there are so many choices that you have to make, or there are so many different pieces that you really have to learn about the business.
In the case of acquisitions, you’re essentially adapting a whole new culture, a whole new set of a chart of accounts built inside your ERP system. They’re certainly going to have their own bank accounts as well. So, a lot of the challenges that you see are really kind of like the in and out of finance. So, it’s, hey, what are we going to decide to do? Do we want them to keep using their own chart of accounts or should they be using the account codes, the sub account codes, the coding string that we’ve been using this entire time? What about bank accounts? Do we have them open a new bank account or do we let them keep using theirs?
Now, let’s talk about accounts payable. So currently, if we keep letting them use an existing accounts payable email address or whatever sort of accounts payable structure they have, are we going keep that decentralized? So, they’re getting their emails over here and we’re getting ours over here and we just hope that works or do we centralize it? Is it going to work even if we centralize it.
Then we must focus on reconciliation at the end of the day too, because essentially, it’s two different sets of books that you have to reconcile those payments to. It’s always easier said than done opening something up, but the structure that you can get out of it, and especially if you have a nice piece of software behind it, or people that are there to manage those workflows and keep everything steady. As a company transitions from a single entity to a multi-entity organization, how can finance leaders facilitate reconciliations? it certainly does have a high payoff.
As a multi-entity organization evolves, how can finance leaders support sustainable growth?
With growth, there’s always a few key things that people are always looking for. They want to become more scalable is the biggest one in growth. And you can become more scalable by having better data, creating efficiencies in your workflows and processes.
One of the big ones that I see is removing bottlenecks. We’re tied down by one specific bottleneck that is going to stunt our growth that we’re having. My real recommendation, especially with multiple entities, is to be as efficient as you can for your workflows, your communications, and once a bottleneck has been identified, go after it, attack it, get it.
Another big one is training. Making sure that the individuals that you hire to do a job or a task or fulfill a certain role are going to be proficient, understand exactly what they’re doing. And what I mean by that is don’t duplicate work. Don’t have one person doing the exact same role that needs to be done in finance or whatever that may be.
Another one is internal controls. Making sure that we have good storage for documents, making sure that, hey, if we want to know exactly how many payments we made last month, we can access that at a click of a button instead of having to sit there and scroll through our different month to months and perform another audit on ourselves just to know. How much are we even paying? How many payments did we make? How many invoices did we receive? How many invoices did we send out for accounts receivable?
Lastly, the automated workflow is to manage essential financial processes, including approvals, payments, and reconciliations, so you aren’t using manual data entry.
To view the complete webinar, download here.
ABOUT THE SPONSOR:
BILL (NYSE: BILL) is a leading financial operations platform for small and midsize businesses (SMBs). As a champion of SMBs, we are automating the future of finance so businesses can thrive. Our integrated platform helps businesses to more efficiently control payables, receivables and spend and expense management. Hundreds of thousands of businesses rely on BILL’s proprietary member network of millions to pay or get paid faster. Headquartered in San Jose, California, BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers. For more information, visit bill.com.
