Elevated Accounting for Growing SaaS Company

Challenge

One of our coolest customers, a scaling software as a service start up, came to GrowthLab to elevate their accounting and bookkeeping needs. This young bootstrapped company turned a profit in 2019 after less than 3 years in business. After a few years with a prior service provider they came to GrowthLab needing help cleaning up restructuring their financial statements and accounting policies and procedures. Moreover, as our customer began to plan their eventual exit strategy in 2020 they turned to the GrowthLab team to prepare their accounting and tax planning. 

Solution

GrowthLab worked closely with the company's managing director and founders to improve their accounting, financial management, and tax strategy. With deferred revenue at the core of its business model, we created work papers and supporting documentation for schedules, balance sheets, and other financials. As we began to unravel the deferred revenue schedules, we had uncovered hundreds of missed invoices. We developed a monthly cadence with the director to connect and review financials in order to close the month and provide the company with accurate financials. 

GrowthLab set up workflows for this company in Box. We also utilized Slack to have quick communication with the directors. We acquisitioned information for the accounts in question, with the documents there was a story to show which provided answers to any questions. We were an extension of the company’s team, when customers needed support, it came to us. 

With the financials in order, GrowthLab was able to get an accurate tax return for this company. We worked with them to make sure that their international operation was managing properly from a financial side. We utilized Quickbooks and CCH axcess tax tools along the way to get this business where it wanted to be.

For any of our customers, we put a heavy emphasis on rigor and cadence up front. Without this, companies, including the one we are referencing here, are often unable to make foundational changes that are needed to scale and grow a company. For example this rigor helped to solidify quality work papers and supporting documentation to ensure proper backup to the deferred revenue. Without confidence in deferred revenue, management would have a difficult time feeling confident in any tax plan or strategy that came out of our conversations together. 

Results

As a result of GrowthLab’s multiple services we helped position the company for a successful exit in 2020. As the saying goes “when you buy a company you immediately replace their accountants and lawyers” but the new owners and management team have decided to keep GrowthLab as part of their accounting and tax advisory team. We believe that our team helped our customer be in a position to quickly execute on its sale in the mist of the COVID-19 pandemic. Our tax team also positioned our customer, the seller to execute a tax efficient transaction. 

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.