Accounting is such a broad term. Yes, it obviously includes ledgers, spreadsheets, guidance, and the like. But at its heart, it's so much more than that. Accounting is both a vehicle and service that helps organizations reach their goals – big or small – whether that's preparing for an IPO, streamlining the month-end close, or building out a tech stack. The problem, of course, is that some of those objectives are tougher to achieve than others, even for a fleet of in-house CPAs.
But that's why accounting advisory services exist – to give CFOs and their finance organizations the horsepower they need to achieve those lofty goals. To fix complex problems. Or maybe just ensure they maintain a tight, compliant ship. And it accomplishes all of this without inflating headcounts and labor costs like the Goodyear blimp.
Naturally, this is a topic we know like the back of our hands here at Embark. Therefore, we wanted to give you a backstage pass to financial accounting advisory services (FAAS) – what they do, how they do it, and the myriad of ways these critical accounting services can help your organization reach its shimmering potential.
What Are Accounting Advisory Services? A Closer Look
Let's get a digital show of hands – how many of you understand ESG is critical to your company's future but have no idea how to implement effective ESG initiatives? Or start to zone out when you hear "new lease accounting standards?" Or maybe want to attract private equity investors, but your financial statements look like the closing minutes of a neighborhood yard sale?
These are the types of things that keep CFOs up at night, and they're just the tip of the iceberg. Like it or not, this is an extraordinarily complex world we live in, one filled with extraordinarily complex rules and regulations. That's why most companies need specialists when going public, initially tackling the tangled web of SOX compliance and other regulatory requirements, or identifying and implementing the right ERP. Because all of these, and countless more, require very specific skill sets.
Of course, a CFO can hire specialists in each of these areas, but there are only so many dollars and open seats to go around in a finance organization. In other words, it usually doesn't make good business sense to expand your headcount in such a dramatic way, only to pay out the nose for talent that likely isn't on par with outside specialists.
Enter an advisory financial accounting firm, one that possesses the requisite skills and knowledge to address complex accounting issues and drive new initiatives. Just as importantly, the firm should also fit in with your accounting and finance functions and workflows, vision, and overarching culture. And although a well-equipped advisory team can bring a list of benefits brings that could go on for miles, some of the larger areas include:
- Technical accounting & complex transactions
- Financial audit facilitation
- Internal audit and control environments
- Internal and external financial reporting
- Process improvement and optimization
- Financial cleanup
- Technology implementation
- Finance transformation initiatives
- Transaction advisory
- Valuation assessments and services
- Capital markets services
- and oh-so-many more
As we said, that already lengthy list is a mere drop in the bucket, assuming you choose an accounting advisory firm that knows its way around a modern finance organization. Wink wink, nudge, nudge.
Strategic Planning for Growth and Value Creation
To reiterate, accounting advisory can feel like a somewhat nebulous term from a distance, simply because of everything it entails. However, to avoid a forest-in-the-trees scenario, we don't want to imply that accounting advisory services are strictly transactional in nature.
Granted, Embark can certainly help you address any of those items from that hefty list above, from revenue recognition, year-end reporting, and complex GAAP issues to restatements and business combinations – and then some. However, if AICPA and FASB gurus are all you see in an outside advisory partner like Embark – or any other experienced advisory group, for that matter – then you're truly missing out on the best of what a relationship with the right firm can bring to your organization.
To that point, the best consultants from the best firms will truly get to understand a clients’ business. From there, they’ll use those insights to help strategize for the future and, with a little elbow grease and a whole lot of experience, help the client reach their financial and operational goals, even if those goals are still a bit hazy or unformed. For example, let's say your board wants you to streamline your management reporting so your decision-makers have the information they need to successfully drive the enterprise forward. Sounds pretty straightforward, right?
Well, an accounting advisory firm will think big picture rather than exclusively focusing on specific, day-to-day tasks. Again to use ourselves as an example, Embark's team of specialists will get to know you, your goals, and what you want to accomplish with the engagement, undoubtedly streamlining your management reporting so it's faster and more insightful than you thought possible. However, for an advisory partner to generate genuine, lasting value for your organization, the discussion shouldn’t stop there.
- Where are you on the business intelligence curve given your current data environment and systems?
- Are you descriptive, constantly reacting to trends and forces after the fact?
- What do you need to become more predictive or prescriptive in your decision-making so you can accurately forecast for the road ahead?
In this example, what might have started as an engagement around management reporting evolves into a much bigger conversation, one that ultimately opens your eyes to automation tools, data dashboards, real-time analytics, and other solutions that can transform your financial information and management reporting into a distinct competitive advantage.
Now, whether you actually decide to pursue those expanded avenues is an entirely different matter. However, at the very least, you now have significantly improved management reporting for leadership to rely on, along with an understanding of the difference between mere reporting and true, forward-looking business intelligence, not to mention the tools that can help you generate it.
The same holds for IPO readiness, M&A, an effective restructuring strategy, risk management, budgeting and forecasting, or beefing up your cybersecurity for your first PCAOB audit. In other words, virtually anything outside the purview of the finance and accounting professionals on your staff, yet still essential to your success, falls within the jurisdiction of an experienced financial advisory team.
The Bottom Line
Think of it this way – when you hire an advisory services leader like Embark, it's not exclusively about the task at hand. Yes, we can advise you on ESG reporting and your 13-week cash flow forecast. But you're also leveraging our perspective, experience, and opinions on what you can do to drive growth and profitability, create value, and reach your potential, even when it's something you might not have thought of yet. That's about as powerful an asset a business can have, and puts a bounce in any stakeholder’s step.
So, when you’re ready to see what you, your people, and organization are capable of achieving, Embark will be there with bells on. It’s what we do, and we can’t wait to get started
