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Case Study: CFO & Controller Services

Pacific Medical Data Solutions
  • Online resource and education platform for real estate investors
  • 17 years old
  • $20+ million privately-owned company; 20% annual growth rate

KEY SERVICES:

  • Process improvement
  • Weekly cashflow analysis and 13-week projection
  • SaaS revenue recognition and deferred revenue calculations
  • Reduce monthly financial close time by 50%
  • Implement accounting automation
  • Calculate royalty payouts
  • Redefine chart of accounts
  • Audit readiness
  • Board and investor reporting

SITUATION:

BiggerPockets is a SaaS company that offers content, tools, and a community of over 2,000,000 members to help people avoid mistakes; learn valuable tips; find partners, deals, and financing and make the best investing decisions possible. BiggerPockets works hard to bring together real estate experts, newbies and everyone in between to gain the knowledge needed to reach their full potential. The 20+ million company has multiple revenue centers, 50+ employees and 100s of contractors. For a company of this size and complexity, a strong financial team leads to a more profitable, stable organization that needs to understand how the various aspects of its business impact its bottom line.

In the months leading up to hiring VertexCFO, BiggerPockets was in the midst of restructuring the accounting and finance team. The company’s accounting firm recommended VertexCFO.

“We hired VertexCFO during a difficult transition of losing our entire finance team,” said Scott Trench, CEO BiggerPockets. “They came in with no on-boarding, had to play detective, and improved the situation with little guidance.”


SOLUTION:

BiggerPockets partnered with VertexCFO during a difficult time and relied on them to figure out the financial records, with no prior knowledge or history. Given the critical nature of the situation, VertexCFO focused on gaining a strong understanding of business operations and financial reporting with a focus on closing their month-end records. As time progressed, VertexCFO dramatically improved processes and procedures to streamline the close process and improve financial accuracy.

“Our institutional knowledge evaporated with the departure of our finance team, and VertexCFO was left with Excel spreadsheets to sort through,” said Trench. “We had a closing process that had an enormous checklist and was highly manual. They had to close the month without the benefit of a legacy accounting team. Despite that challenge, they shortened our close process over a period of a few months, and were really able to improve our process.”

VertexCFO provided the following:

  • Full billing and collections services
  • Balance sheet reconciliations
  • Board-investor financial reports and KPI’s
  • Introduced a standard cadence for internal review and payment of vendor invoices (previously ad-hoc)
  • Delivered a weekly cashflow analysis and 13-week projection
  • Designed a new process to capture development costs for capitalization
  • Provided support for R&D Tax credit analysis with outside firm
  • Evaluated inefficient manual processes and re-designed or automated them
  • Liaised with major book publishers to obtain more concise and timely reporting of sales
  • Audit readiness and year end support
  • Produced a set of best practice policies and procedures for future reference

“As the CEO, I appreciated their independence and ability to figure out the situation without my over-involvement,” said Trench. “They were able to close the books, improve and accelerate our close process, and handle our annual audit process at the same time, allowing me to focus on my job while they handled the accounting and controller activities.”

As time passed, VertexCFO recognized that Bigger Pockets needed more internal support and assisted with training and on-boarding as part of their transition.


RESULTS:

“I can’t gush enough about what a lifesaver VertexCFO was for BiggerPockets,” said Trench. “They not only walked into a mess and made sense of it, but they left our finance department in a much better position, with processes and procedures, in a matter of months.”

Prior to VertexCFO, the closing process took 10 days with 80-hour work weeks for the internal team. With process improvements VertexCFO reduced that to 5 business days to close and converted to full GAAP accounting. In addition, VertexCFO automated downloads and the sync of accounting information, made improvements to the AP approval and disbursement process and improved the posting of large-scale credit card transactions to reduce redundancy in workload. VertexCFO also continued managing a complex audit project, underway as the new CFO on-boarded, allowing him to get acquainted with the company’s strategic needs.

BiggerPockets has since hired a full-time CFO, as a company their size warrants, and now has a full Finance and Accounting team.

Key accomplishments:

  • Reduced monthly close time by 50% to provide more accurate and timely financial information to senior leadership and board of directors
  • Implemented accounting automation within current accounting tools to streamline processes
  • Improved financial reporting
  • Redefined chart of accounts to improve classifications of financial information and streamline financial reporting
  • Partnered with vendors and 3rd party consultants to convert from ad-hoc to regular payment cycles
  • Managed the external audit process to successful completion, with no key adjustments
  • Assisted in the successful transition of the payroll function to a new 3rd party provider
  • Supported a new CFO and team in their on-boarding

“VertexCFO went above and beyond for us,” said Aaron Sallade, CFO, BiggerPockets. “Their speed and accuracy is excellent, and I really appreciate their straightforward approach. They are independent, don’t over-promise, and worked with our 3rd parties in a professional manner.”

““It’s very rare to find someone who can come in with no insight and make such a positive impact on a company. It was legendary,” Trench said.

From the CEO

“We would absolutely use VertexCFO again and highly recommend them to other SaaS and high-growth companies. You won’t regret it.”

“I can’t gush enough about what a lifesaver VertexCFO was for BiggerPockets. They not only walked into a tough situation and made sense of it, but they left our finance department in a much better position, with processes and procedures, in a matter of months.”

“Our institutional knowledge evaporated with the departure of our finance team. We had a closing process that had an enormous checklist with complicated Excel files rather than an automated process in the GL. They had to close the 1st month by tracking down numerous hard-coded numbers hidden in complicated Excel files. Despite that challenge, they shortened our close process and got us through the first couple of months, and then were able to improve our process. They used our existing GL software to automate and eliminate wasteful procedures, shortening our close process from 10 days to 5.”

“As the CEO, I appreciated their independence and ability to figure out the situation without my over-involvement. They were able to close the books, improve and accelerate our close process, and handle our annual audit process at the same time, allowing me to focus on my job while they handled the accounting and controller activities.”

“We hired VertexCFO during a difficult transition in our finance team. They came in with no on-boarding, had to play detective, and improved the situation with little guidance. It’s very rare to find someone who can come in and make such a positive impact on a company with so little background. It was legendary.”

“VertexCFO attacked every problem head on.”

– Scott Trench, CEO, BiggerPockets, a $20+ million privately-owned SaaS company providing online resources and an education platform for real estate investors