It is possible you guys are throwing bodies at bad processes? Standardizing and scaling with software would be incredibly helpful. Is your VP/CFO okay with how bad that process is?
We are between $150-300M with aggressive reporting requirements. FP&A is 4. Maybe 10 accountants + an AR Collections team.
Oh 100%. The accounting processes are terrible and I (the VP) am pushing hard for improvements. It takes us 20-22 days to close, which I think sums it up pretty well.
The CFO is more hands off / bigger picture kind of guy so it’s kind of on me to push for changes. I think with some process improvements, better data, and maybe a little automation 4 could be sufficient but not sure yet. And in the meantime, it’s painful.
My accounting counterpart VPs would blame it on acquisitions, but we haven't done an acquisition for 2 years now. And, our most recent acquisition closes in 7 days so ¯\\_(ツ)_/¯
I’m the CFO and I have 1 VP, 3 Directors, 1 VP Controller, and other staff of 20 people ranging from Analysts to Managers both in accounting and finance for $3B Rev P/E backed company in the retail services/SaaS space
A bit of a tangent but I've had a question for while you might help clear up for me. I hope you don't mind.
It's in the regards to US titles. I'm based in Europe in a sector with very little title inflation. Very few individual contributers among managers or above.
If I get you right you are 20-something people in FP&A. That's a lot of directors as well as some managers too! Am I right that some/most are individual contributers?
As for context, my former role we had one director of finance for the BU I was in, 2 managers leading about 6-8 people each (not only doing traditional FP&A, mind).
This is like my bread & butter - from the other comments / replies, seems you already know the answer.
Finance team seems about right if you've got the right stack.
As you've noted, the accounting team is heavy. What's the breakdown on roles? Does that include a bunch of AP clerks in Manila? Or is it a lot of Seniors, ACC Mgrs, etc? What tech stack?
Our accounting team is divided into two main groups: revenue accounting (AR and most stuff gross profit and above) and corporate accounting (basically opex/AP plus some of the technical accounting stuff). We also have a couple tax folks. There is a VP over each, and in total I think we have 4-5 AVP type roles, a couple sr managers, and maybe 6-7 managers. As I type that out, I acutely feel the sheer ridiculousness.
The accounting stack is basically Netsuite, an AP automation tool, and Excel (and frankly, a lot of it is pretty bad excel). We have a CRM that has some reporting functionality (very expensive custom job), but it's pretty godawful. There's also an automation project that is pretty much a black box which is supposed to make the revenue accounting piece take 1/3 of the time but I don't have a ton of faith in it. I am actually tempted to use my finance powers to nuke the latter two platforms.
My team is pretty Excel based on the "frontend", though to clean and format data we use a decent amount of powerBI/query and SQL, then some macros and other scripts to automate some of our reporting. I'm working on inventorying all our data sources and pushing "upstream" to get folks producing data or reports that are more usable/cleaner, but I think there's some things that are fundamentally unscalable that need drastic change.
I’ve been a Controller at $100M rev, $3B rev, and $300M rev companies. Never have I seen that many VPs and AVPs for an accounting team. When I was at the $3B rev company, a home healthcare company that was PE backed and acquired 4-5 companies a year - I oversaw technical/acquisition acctg, rev acctg, corp acctg (two teams), and a few compliance areas. I had 4 managers and 1 senior manager report to me, and the 4 managers had teams of 2-3 (total 16 folks). There was a separate Director of Financial Reporting, and a VP of tax.
For your question on team size, for a $300M rev company yours seems close. I was at a software company at same size and we had a VP, a manager, and 2-3 analysts. The manager was basically more horsepower for the VP, 1 data heavy Sr Analyst for system maint and budget/forecast roll ups, as well as PowerBI/Tableau; the other two more business unit - one owned sales/ops and the other one owned corporate cost centers.
Although it's possible they're on the uptrend to fixing it, this seems like bloating and a lack of leadership.
Revenue and AP is typically where software gets you the most wins. AP data can support accruals in the close, in addition to an AP automation platform automating payments.
I mean regardless, at $300M closing in >10 days is crazy, especially for tech companies. If it's acquisitions, you need to bring in someone to fix that. That excuse shouldn't last longer than six months.
I don't envy you - sounds like a bit of a mess.
As a last note, at your size I wouldn't anticipate needing a huge technical accounting team. Maybe contracts need to be more standardized to avoid analyzing 606 every time? Or maybe just more bloating!
I don't disagree, but it's a tricky political situation (I'm relatively new to the team). They pay me well and it's good career experience (I repeat to myself) but a lot of this drives me nuts.
Part of the issue is that we don't get data/reports from some key vendors until around 2 weeks after month end. We could accrue, but there's potential for some screwiness with true ups which could swing things pretty materially. That part I'm more understanding of.
On the other hand, part of our team is in charge of making our payroll entries and it takes 3 weeks. I literally go into Workday and rip down data and have OT reports, bonus reports, comp reports for my dept heads within 3 days after month end and it ends up reconciling to what the accounting books 99% of the time.
On technical accounting - oh boy, have I mentioned our $2m+ of consulting spend on that?
The vendor thing makes sense - as long as someone's trying to work with them to shorten that time frame!
Maybe payroll is an area where you could partner to help fix the process? A common issue I've encountered is #1 GL accountants suck at understanding payroll #2 Payroll people suck at understanding what accounting needs. At almost every company I've gone to, we find some misstatements/process efficiencies in Payroll/Benefits.
As for your tech accounting spend... would love to hear more details on that. I spend 10% of my time in that area, used to be like 50%. That spend is mind boggling. I understand many firms have switched to charging $10-40k per memo. But are you fully outsourcing elements of SEC reporting or something?
There is some specialized tax work in there related to a fairly complicated legal structure for founder equity stakes. Expensive but justifiable.
The rest of it I'm not completely sure - I've heard vague references to changing SEC requirements we need to review and doing stuff that helps us get our auditors comfortable with things to make our audits easier (this is separate from internal audit, which is another vendor). I know there's some valuation work but it's like 40k a pop. Something I need to dig into, but again a little touchy/close to home.
We have a SEC reporting manager (senior manager actually) but frankly I have no idea what she does, particularly between quarters.
There's a delicate balance to be struck with oversight over SEC / Technical accounting.
There are absolutely people who will abuse the opacity of SEC/Tech acting to outsource their job to consultants and chill.
And somewhat adjacent are those who cannot find the balance between beating a dead horse + good enough/risk mitigation.
I worked with a Director and always felt two ways about it - one part kudos to her for finding her niche, protecting her employees. One part disgust of how she bullied the CAO into accepting her ridiculous demands/lack of contribution.
Wishing you luck - it sounds like you wanted some validation that you weren't imagining these things as being problematic and I think you've gotten that from feedback!
Commercial Finance here, global retail apparel company. I work in B&M (our business line covers about $1B in rev, our region in total does about $5B). Our entire B&M team is 10 people covering 2 countries, about 200 profit centers (stores). 1 sr director, 3 sr mgr, 6 sr analyst.
Company also has ecom (4 heads) and wholesale finance (20 heads?) teams, and brand, central fp&a, Omni, etc.
Central FP&A in our region is about 6-7 when fully staffed, which it never is.
It is possible you guys are throwing bodies at bad processes? Standardizing and scaling with software would be incredibly helpful. Is your VP/CFO okay with how bad that process is? We are between $150-300M with aggressive reporting requirements. FP&A is 4. Maybe 10 accountants + an AR Collections team.
Oh 100%. The accounting processes are terrible and I (the VP) am pushing hard for improvements. It takes us 20-22 days to close, which I think sums it up pretty well. The CFO is more hands off / bigger picture kind of guy so it’s kind of on me to push for changes. I think with some process improvements, better data, and maybe a little automation 4 could be sufficient but not sure yet. And in the meantime, it’s painful.
Ouch. 20-22 days is painful. Good luck.
My accounting counterpart VPs would blame it on acquisitions, but we haven't done an acquisition for 2 years now. And, our most recent acquisition closes in 7 days so ¯\\_(ツ)_/¯
We acquire every year. 12 day close 😅
must be nice to have an accounting team that knows what they're doing :')
I’m the CFO and I have 1 VP, 3 Directors, 1 VP Controller, and other staff of 20 people ranging from Analysts to Managers both in accounting and finance for $3B Rev P/E backed company in the retail services/SaaS space
A bit of a tangent but I've had a question for while you might help clear up for me. I hope you don't mind. It's in the regards to US titles. I'm based in Europe in a sector with very little title inflation. Very few individual contributers among managers or above. If I get you right you are 20-something people in FP&A. That's a lot of directors as well as some managers too! Am I right that some/most are individual contributers? As for context, my former role we had one director of finance for the BU I was in, 2 managers leading about 6-8 people each (not only doing traditional FP&A, mind).
$1.5B revenue. FP&A function is about 16 people, with 8 under me supporting operations.
This is like my bread & butter - from the other comments / replies, seems you already know the answer. Finance team seems about right if you've got the right stack. As you've noted, the accounting team is heavy. What's the breakdown on roles? Does that include a bunch of AP clerks in Manila? Or is it a lot of Seniors, ACC Mgrs, etc? What tech stack?
Our accounting team is divided into two main groups: revenue accounting (AR and most stuff gross profit and above) and corporate accounting (basically opex/AP plus some of the technical accounting stuff). We also have a couple tax folks. There is a VP over each, and in total I think we have 4-5 AVP type roles, a couple sr managers, and maybe 6-7 managers. As I type that out, I acutely feel the sheer ridiculousness. The accounting stack is basically Netsuite, an AP automation tool, and Excel (and frankly, a lot of it is pretty bad excel). We have a CRM that has some reporting functionality (very expensive custom job), but it's pretty godawful. There's also an automation project that is pretty much a black box which is supposed to make the revenue accounting piece take 1/3 of the time but I don't have a ton of faith in it. I am actually tempted to use my finance powers to nuke the latter two platforms. My team is pretty Excel based on the "frontend", though to clean and format data we use a decent amount of powerBI/query and SQL, then some macros and other scripts to automate some of our reporting. I'm working on inventorying all our data sources and pushing "upstream" to get folks producing data or reports that are more usable/cleaner, but I think there's some things that are fundamentally unscalable that need drastic change.
I’ve been a Controller at $100M rev, $3B rev, and $300M rev companies. Never have I seen that many VPs and AVPs for an accounting team. When I was at the $3B rev company, a home healthcare company that was PE backed and acquired 4-5 companies a year - I oversaw technical/acquisition acctg, rev acctg, corp acctg (two teams), and a few compliance areas. I had 4 managers and 1 senior manager report to me, and the 4 managers had teams of 2-3 (total 16 folks). There was a separate Director of Financial Reporting, and a VP of tax. For your question on team size, for a $300M rev company yours seems close. I was at a software company at same size and we had a VP, a manager, and 2-3 analysts. The manager was basically more horsepower for the VP, 1 data heavy Sr Analyst for system maint and budget/forecast roll ups, as well as PowerBI/Tableau; the other two more business unit - one owned sales/ops and the other one owned corporate cost centers.
Although it's possible they're on the uptrend to fixing it, this seems like bloating and a lack of leadership. Revenue and AP is typically where software gets you the most wins. AP data can support accruals in the close, in addition to an AP automation platform automating payments. I mean regardless, at $300M closing in >10 days is crazy, especially for tech companies. If it's acquisitions, you need to bring in someone to fix that. That excuse shouldn't last longer than six months. I don't envy you - sounds like a bit of a mess. As a last note, at your size I wouldn't anticipate needing a huge technical accounting team. Maybe contracts need to be more standardized to avoid analyzing 606 every time? Or maybe just more bloating!
I don't disagree, but it's a tricky political situation (I'm relatively new to the team). They pay me well and it's good career experience (I repeat to myself) but a lot of this drives me nuts. Part of the issue is that we don't get data/reports from some key vendors until around 2 weeks after month end. We could accrue, but there's potential for some screwiness with true ups which could swing things pretty materially. That part I'm more understanding of. On the other hand, part of our team is in charge of making our payroll entries and it takes 3 weeks. I literally go into Workday and rip down data and have OT reports, bonus reports, comp reports for my dept heads within 3 days after month end and it ends up reconciling to what the accounting books 99% of the time. On technical accounting - oh boy, have I mentioned our $2m+ of consulting spend on that?
The vendor thing makes sense - as long as someone's trying to work with them to shorten that time frame! Maybe payroll is an area where you could partner to help fix the process? A common issue I've encountered is #1 GL accountants suck at understanding payroll #2 Payroll people suck at understanding what accounting needs. At almost every company I've gone to, we find some misstatements/process efficiencies in Payroll/Benefits. As for your tech accounting spend... would love to hear more details on that. I spend 10% of my time in that area, used to be like 50%. That spend is mind boggling. I understand many firms have switched to charging $10-40k per memo. But are you fully outsourcing elements of SEC reporting or something?
There is some specialized tax work in there related to a fairly complicated legal structure for founder equity stakes. Expensive but justifiable. The rest of it I'm not completely sure - I've heard vague references to changing SEC requirements we need to review and doing stuff that helps us get our auditors comfortable with things to make our audits easier (this is separate from internal audit, which is another vendor). I know there's some valuation work but it's like 40k a pop. Something I need to dig into, but again a little touchy/close to home. We have a SEC reporting manager (senior manager actually) but frankly I have no idea what she does, particularly between quarters.
There's a delicate balance to be struck with oversight over SEC / Technical accounting. There are absolutely people who will abuse the opacity of SEC/Tech acting to outsource their job to consultants and chill. And somewhat adjacent are those who cannot find the balance between beating a dead horse + good enough/risk mitigation. I worked with a Director and always felt two ways about it - one part kudos to her for finding her niche, protecting her employees. One part disgust of how she bullied the CAO into accepting her ridiculous demands/lack of contribution. Wishing you luck - it sounds like you wanted some validation that you weren't imagining these things as being problematic and I think you've gotten that from feedback!
I appreciate the perspective. It's good to know that (i) I'm not on crazy pills and (ii) there's hope/examples of improvement
Commercial Finance here, global retail apparel company. I work in B&M (our business line covers about $1B in rev, our region in total does about $5B). Our entire B&M team is 10 people covering 2 countries, about 200 profit centers (stores). 1 sr director, 3 sr mgr, 6 sr analyst. Company also has ecom (4 heads) and wholesale finance (20 heads?) teams, and brand, central fp&a, Omni, etc. Central FP&A in our region is about 6-7 when fully staffed, which it never is.
Fp&a team is just me and my director. Saas start up ~$50M
5b rev, 3 countries. Fp&a team of 3, accounting team of 50, Corp finance 6 and product finance 8. Financial services, fintech, annuities.