Written by: Daniel Martins
We think being accountants is pretty darn cool. Going beyond what’s typically expected of accountants is even cooler. Over the decades of supporting entrepreneurial business owners, we learned that simply filing tax returns or preparing financial statements isn’t how value gets delivered to clients. Being excellent advisors means that we can read between the lines, see the bigger picture, and keep our eyes open to opportunities even when we are not asked. Collectively, we have developed a suite of services that makes us a one-stop-shop for not only compliance, but also a wide variety of advisory services. These services include:
- Controllership and financial reporting assistance (often referred to as “fractional CFO” services)
- Reviewing and strengthening internal controls and processes intended to safeguard corporate assets and ensure the integrity of financial reporting
- Assisting in the preparation of budgets and forecasts
- Supporting or leading the planning and implementation of accounting system transitions
- Educating entrepreneurs on best practices in exercising oversight over the finance function
- Providing buy-side or sell-side assistance in due diligence processes
- Preparing Quality of Earnings reports
- Helping management and owners navigate through disruptive events such as mergers, acquisitions, and divestitures, including the assessment of any tax and accounting implications
Controllership and Financial Reporting Assistance (The “Fraction CFO”)
Despite what some may think, controllership and financial reporting is intricate and highly technical. Not everyone is equipped with the requisite know-how on how to record a complex transaction, report under a new accounting standard, or implement consolidated reporting. Many are surprised to learn that their year-end or month-end checklists are missing critical items and adjustments. From our experience, this can result in interim financial information that is outdated or inaccurate, rendering it difficult to make informed decisions. If you find yourself waiting for your year end meeting to learn how your business did, you might find assistance in this area helpful. We can work with you and your team to develop management reports that help you keep a pulse on your results throughout the year.
Internal Controls and Processes
Internal controls are the absolute bedrock of safeguarding corporate assets and ensuring the integrity of financial reporting. Internal controls are those procedures and processes that ensure, for example, that only authorized vendors are being paid for goods actually received and that only real employees are being paid for work actually performed. Segregation of duties, reconciliations, and approvals are all integral parts of the puzzle in ensuring that assets are not misused and that systemic errors are prevented or detected. Farnham
is ready to help review, remediate, and strengthen the internal controls that underpin your business’ day-to-day activity.
Budgeting and Forecasting
Forward-looking planning is a crucial part of every business. It can often spell the difference between a highly successful business that proactively sets goals and seizes opportunities, and a troubled under-performer that’s simply reacting to events as they happen. However, building an operating budget or forecasting model from scratch can be challenging as there’s a delicate web of interconnected schedules and calculations under the hood. Our team can work with you to help build a comprehensive model that translates plans into financial projections that can aid in resource planning and cash management.
Accounting System Transitions
Whether it’s due to growing size, volume, or informational needs, nearly every business outgrows their accounting system at some point. Old legacy systems might slow down and crash with age and increasing transaction volume. Others fail to produce the reports we need or lack much-needed features tailored to the business. At first, the idea of switching systems may appear daunting. From software selection, to planning, to implementation and post-transition review – Farnham is happy to help.
Educating Entrepreneurs on Finance Oversight
Perhaps you’re an entrepreneur who’s quite active in operations and management, but relatively hands-off within the finance function. We all instill a great amount of trust in our finance teams, and most deserve it, but how do you ensure that you’re receiving the right reports, in the right frequency, and that all records are being checked, balanced, and retained? Most only become aware and react to errors, omissions, or wrongdoing when it’s too late. Farnham can help develop a monthly reporting process that your finance team can follow and educate you, the entrepreneur, on what to focus on in order to detect issues.
Due Diligence
Buying or selling a business is no small feat. Perhaps you’re on the buy-side and want to make sure that, in buying a new business, you’re not inheriting unforeseen CRA liabilities or legal claims. Furthermore, you’d want to make sure that the buyer’s purported financial health is genuine, and that any claims and representations made regarding the business are true. Conversely, if you’re on the sell-side, the onslaught of questions and document requests may be overwhelming. Let Farnham help you navigate the often-daunting due diligence process.
Quality of Earnings Reports
Potential investors and creditors often look beyond the annual financial statements and into what’s known as a business’ “quality of earnings”. Quality of earnings focuses on a business’ normalized performance, trends therein, and the overall “quality” of its profits. Features like closeness-to-cash, recurrence and predictability, the consistency of accounting policies, and minimal estimation uncertainty all contribute to earnings being deemed “high quality”. Farnham is pleased to offer the preparation of quality of earnings reports as a value-added service.
Mergers, Acquisitions, and Divestitures
Maybe you’ve spent years or decades building a successful business, and now you’re looking to sell the company in order to realize the rewards of your efforts. Or perhaps you’re looking to grow your portfolio of businesses and wish to acquire another company with high forward-looking potential. Mergers, acquisitions, and divestitures are complex. From sourcing a potential buyer, to getting a signed Letter of Intent (“LOI”), to proceeding through the various stages of due diligence, negotiation, and closing – the process itself can be complicated and difficult to navigate. Not to mention that there’s a large number of tax and accounting implications to consider as well. Farnham is able to provide direction and assistance throughout the process, from start to finish.
Next Steps
Have questions? Feel free to contact us for further information. Questions concerning our advisory services can be directed to daniel@farnhamco.ca.