A case study demonstrating Controllership Solutions LLC broad scope of services and the power of QuickBooks:
Can QuickBooks run a billion dollar company?
In 2010, when market conditions were right, a group of private-equity-backed, petroleum industry experts formed to acquire distressed oil refineries and turn them around. The newly formed company with significant financial backing went from 0 to 3 oil refineries in less than a year. Each deal required a quick close, and accounting systems were needed for implementation ASAP. However, their system of choice, SAP, would take months to configure and roll out. An employee suggested QuickBooks; they searched for the right professional resource and, after interviewing several firms, found Controllership Solutions LLC. Smith immediately got to work. The assignment was three-fold.
Understand the full accounting cycle. Years of working in a fully automated SAP system had isolated many tasks from the up & downstream users and sub-ledger systems. Smith toured the refineries, interviewed dozens of employees and researched legacy accounting tasks. He also became familiar with the operations of the business to gain a more thorough understanding; this included the chemistry and process flow of the refinery business. (The first 1-2 months of the engagement)
Once data sources were identified, QuickBooks was optimized to provide stakeholders the detailed reports they would need. Smith configured QuickBooks by utilizing customized fields, templates, memorized reports and chart of accounts. Frequently, complex calculations for pricing and volumetric activity were required. This was beyond QB’s computational ability. Smith analyzed and codified customer contracts and developed excel-based worksheet templates that would convert numerous pricing, volumetric and chemical analysis inputs into the required price and quantity values for QB invoicing.
Finally, Smith developed detailed procedure manuals. As the company staffed up, Smith trained the new hires, configured user accounts with proper permissions and served as a QB tech supporter and troubleshooter. The accounting process was designed to ensure accuracy and completeness via segregation of duties and checks and balances fitting for a billion dollar company with go-public aspirations. Specifically, control totals and completeness tests reconciled sub-ledger systems to the QuickBooks GL on a daily basis. This insured accuracy and allowed the books to be closed within weeks after month end.
As the accounting department continued to expand, Smith stayed on and continued to provide controllership services. Smith ran customized reports for management, helped reconcile problematic transactions and answered staff questions. Given the understanding Smith had acquired of the company, he was utilized for cross functional and special departmental projects. Smith assisted with booking month end journal entries and auditing unusual balances. He also brought the SAP implementation team up to speed on the knowledge and information he gathered when implementing QuickBooks and parsing data for the SAP upload. When the books were audited by their outside accountants and creditor banks, Smith acted as point person to coordinate numerous detailed and highly substantive audit requests.
“Stephen exceeded all expectations. He quickly recognized what needed to be done and executed timely and accurately with little direction and much initiative. His ability to anticipate the reporting needs of management, his knowledge of QuickBooks and effectiveness as a trainer to bookkeeping staff was instrumental in getting a complex, billion dollar work flow with zero errors right the first time. Stephen was respected by staff and an asset to management.”
A Case Study demonstrating Controllership Solutions LLC’s set-up and training services and the importance of quality data.
In the Northern pan-handle of Idaho, just 30 miles shy of the Canadian border resides, Selkirk Powder Company (www.SelkirkPowder.com). SPC provides guided back country snowcat skiing excursions and separately operates snowmobile tours. Formed in 2002, SPC operates a unique model; to lower overhead costs they searched out and created their 4000+ acre operation on the back of an “up and coming” Rocky Mountain ski area, Schweitzer Mountain Resort. (www.schweitzer.com)
The outfit has grown to include a 10 passenger snowcat (grooming machine with a cab), a fleet of snowmobiles and a lodge on the summit of Schweitzer Mountain. Guests travel from all over the world to ski with SPC and are rewarded with an experience that exceeds expectations. Highlights include personable guides, beautiful scenery, keepsake YouTube videos and 300-400+ inches of powder/ season which have created a strong following of loyal customers.
While incredible attention was invested in the guest experience, a lack of focus on accounting and customer data created an information gap between management and investors and the bottom line. Much of the daily recordkeeping was done manually via Excel or paper. This meant that accurate, real-time P&L and backlog information was not available until it was too late.
Enter Controllership Solutions LLC and Stephen M. Smith CPA (a lifelong skier). Smith had an existing client relationship with an SPC founder. When a simple cash flow question was asked, additional discussions were had and it was soon evident that SPC’s accounting systems needed upgrading. Smith got to work developing a QuickBooks file structure enabling multiple data metric points that could be later analyzed for guest bookings, cash flow, CRM and operating stats. To ensure secure access by multiple stakeholders across the country, the file was hosted on secure 24x7 servers.
Smith traveled to Sandpoint, Idaho to train management and staff on the new policies and procedures. SPC’s outside accounting firm was included in the process and welcomed the system upgrades which allowed them to be more efficient with tax and financial statement preparation. Smith’s involvement continued as a “virtual controller” upon returning back East. Smith answered follow up questions, addressed problematic transactions, insured accuracy by reconciling balance sheet items and provided stakeholders monthly financial summaries with financial visuals, analysis and commentary. In addition to consulting on SPC’s accounting, Smith provided input on marketing, software management, website design and other business issues.
The improvement in data organization was of immediate benefit for customized tasks like tracking customer deposits and automatic issuing of credits due to weather cancellation. Income was now matched with expenses and revenue was appropriately recognized on the actual day of the excursion. The resulting financial data provided better cash flow projections and the increased controls over scheduling and cash provide a platform for scaling booking operations.
And as for Smith, who had never skied out West prior to this trip - he has been converted to the thrill of powder skiing!
Check out these video’s produced by his client, and friend, Selkirk Powder Company:
(Smith is the silky smooth skier sporting the Yellow & Black North Face jacket.)
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