Webinars

Are You Overpaying for Software? How Companies Can Maximize ROI in the SaaS Jungle

Earmark Team · May 1, 2024 · Leave a Comment

As software expenses continue to rise, accounting departments are faced with the daunting task of managing these investments effectively. In a recent webinar, Jason Parker of FinQuery dives deep into the critical importance of effective software management in today’s business landscape. With software expenses, particularly in the SaaS space, becoming a larger portion of business budgets, organizations must prioritize proactive strategies and processes to manage these investments effectively.

The Growing Importance of Software Spend Management

Parker begins by discussing the rapid growth of software spend, particularly in the SaaS space, and the need for businesses to prioritize effective management strategies. As he points out, “Finance, of course, is responsible for making sure that the money spent at an organization returns the commensurate value that you’re looking for. So if I’m a finance professional, I want to make sure I have visibility into spend across the organization.”

Effective management is increasingly critical, with software expenses becoming a larger portion of business budgets. Organizations must understand and optimize software spend across various departments and functions to ensure investments align with business goals and deliver value.

The Challenges and Risks of Limited Visibility

One of the biggest obstacles to effective software management is limited visibility into software investments. Parker explores the challenges and risks associated with this lack of transparency, including:

Siloed decision-making
Complex contract structures
Inadequate understanding of software usage

These factors can lead to suboptimal renewal decisions, security risks, and wasted resources. Companies need to adopt a cross-functional approach and centralized processes to mitigate these risks and navigate the complexities of software management.

The Path to Optimization: Data-Driven Strategies and Processes

So, what can companies do to optimize their software investments and drive long-term success? Parker outlines several key strategies and processes, including:

Centralizing contract management
Automating IT processes
Making data-driven purchasing decisions

As he emphasizes, “You want to be intentional about this. You got to make sure that what you’re using these tools for is solving the intended problems.”

Another crucial aspect of effective software management is measuring success through metrics like subscription spend per resource and license utilization rates. Parker notes, “What we see today is that almost every business is overspending on software because they don’t have the information they need to make the best decision. Managing that subscription spend per resource is important because just about every business out there can reduce that spend and obtain even more value in their investments.”

By adopting these data-driven strategies and processes, companies can optimize their software investments, mitigate risks, and ensure their investments align with business goals and deliver value.

The Bottom Line: Prioritizing Software Asset Management for a Thriving Company

In an increasingly software-driven world, effective software management is no longer a nice-to-have but a critical imperative for companies seeking to thrive. As businesses become more reliant on technology, companies prioritizing cross-functional collaboration, centralized processes, and continuous optimization will be best positioned to navigate the complexities of software management and drive long-term success.

By adopting the strategies and processes outlined by Parker, companies can optimize their operations and better serve their clients in navigating the complexities of the digital landscape. To learn more about how your firm can master the art of software management, be sure to watch the full webinar recording.

The Power of Transparency: How Accurate Compensation Data is Transforming the Accounting Industry

Earmark Team · April 22, 2024 · Leave a Comment

Are you getting paid what you’re worth? It’s a question many professionals ask, but finding reliable answers can be challenging.

Having accurate and transparent compensation data is crucial for accounting professionals to advocate for fair pay and for firms to attract and retain top talent in an increasingly competitive industry. Fortunately, Dominic Piscopo, Founder of Big Four Transparency, has the data. In a recent webinar, he shared what he learned, and we’ve summarized the key takeaways for you in this article.

The Birth of Big Four Transparency

Dominic learned the hard way about the significance of paying people what they deserve. While working at one of the Big Four accounting firms, he realized he was being paid much less than other firms in the area were paying people with similar skills. This discovery made him frustrated and unhappy with his job, even though he liked everything else about it.

Piscopo was inspired to create Big Four Transparency, a crowdsourced compensation database that helps accounting professionals know what they’re worth and assists firms in staying ahead of the curve.

Dominic explains that “Big Four Transparency is essentially a giant crowdsourced compensation database. The front-facing function is to help accounting professionals gain access to high-quality compensation data. This is meant to help guide you in your career, help you advocate for the type of compensation you should be looking for in today’s market, and keep you up to date on the evolutions of that.”

Big Four Transparency is essentially a giant crowdsourced compensation database. The front-facing function is to help accounting professionals gain access to high-quality compensation data. This is meant to help guide you in your career, help you advocate for the type of compensation you should be looking for in today’s market, and keep you up to date on the evolutions of that.
Dominic Piscopo, founder of Big 4 Transparency

The accounting industry is experiencing a growing demand for dependable compensation data, as evidenced by the popularity of platforms such as Big Four Transparency. According to Dominic, almost a quarter of a million professionals have utilized his platform alone. As more employees seek out this information, firms prioritizing transparency will have a competitive edge in attracting and retaining the best talent.

The High Cost of Inaccurate Compensation

Compensation is crucial for accounting firms, as it directly impacts their profitability. The workforce generally constitutes the most expensive part of the business. If the firm pays its employees excessively, it may significantly impact its profits.

But the costs of underpaying employees can be just as severe, including:

Constrained resources for taking on new work, sacrificing firm growth and valuation
Loss of institutional knowledge due to high employee churn
Disrupted team dynamics and low morale, which leads to more turnover
High recruiting and onboarding expenses that can exceed the cost of raising salaries to market rates

Accurate compensation data helps firms make informed decisions that balance financial considerations with employee satisfaction and competitiveness in the market. By investing in the correct data, leaders can develop strategies to optimize costs while attracting the talent needed to drive growth.

Navigating the New World of Work

As remote work becomes more prevalent, accounting firms must adapt their compensation strategies. Piscopo emphasizes the importance of considering the office model (remote, hybrid, in-person) when setting salaries.

For example, remote-first firms should assess whether they need to target high-cost-of-living talent markets. These firms can offer competitive pay while maintaining profitability by carving out certain expensive cities from their compensation benchmarks. However, firms may still need to include those geographies for roles requiring specialized skills concentrated in pricier areas.

The Power of First-Party Data

To make sound compensation decisions, firm leaders should prioritize first-party data over other sources. Salary guides from recruiters and data shared among firm alliances can be prone to bias and lack granularity.

In contrast, first-party data sourced directly from employees is less biased, more detailed, and provides greater confidence in accuracy. Piscopo advises firms to invest in accessing reliable first-party compensation benchmarks to stay ahead of the curve.

The Importance of Nuanced Analysis

Throughout the webinar, Dominic stresses the value of granular data. He shares how filtering out a few high-cost-of-living cities can significantly impact salary benchmarks, even at the entry level.

When analyzing compensation data, firm leaders should examine both averages and percentiles. Averages provide an excellent high-level view but can be skewed by outliers. Percentiles are less sensitive to outliers and lend themselves well to setting salary bands.

Dominic recommends using the 25th, 50th, 75th, and 90th percentiles to establish pay bands with room for progression. For example, a first-year senior accountant might start at the 25th percentile, while a high-performing third-year senior could reach the 90th percentile.

Firms should also dig into granular data cuts, not just overall ranges for a role. Drilling into specific cities, experience levels, and service lines can reveal essential nuances. For instance, firms should avoid grouping higher-paid advisory/consulting roles with audit/tax positions.

Leveraging Data to Spot Red Flags

Beyond informing pay decisions, compensation data can help leaders identify potential organizational issues. Piscopo shares an example of how comparing a firm’s average weekly hours to industry benchmarks might reveal understaffing. By proactively addressing these red flags, firms can boost retention and productivity.

Compensation platforms can also provide insights into job satisfaction through factors like the office model. For instance, if remote employees consistently report higher fulfillment, firms might consider expanding virtual work options.

Recognizing Data Limitations

While compensation data is a powerful tool, firm leaders must also understand its limitations. Piscopo cautions that small sample sizes can skew benchmarks, particularly when segmenting by role, city, and experience level factors.

He suggests strategies like grouping together geographically and economically similar cities to draw reliable conclusions from limited data. Firms should also be transparent about any limitations and avoid misleadingly presenting data.

The Risks of Relying on Negotiations

Piscopo points out that relying on candidate salary demands is risky, as most applicants won’t disclose the minimum they’re willing to accept. Firms that base pay decisions on these negotiations may end up overspending.

Instead, leaders should ground compensation strategy in data. By understanding the market through a data-driven lens, firms can develop salary bands that balance external competitiveness with internal equity and profitability.

Embracing Transparency, Driving Growth

In today’s competitive landscape, accurate compensation data is more than nice to have – it’s a critical tool for driving firm growth and profitability. By investing in first-party data, analyzing the nuances, and proactively identifying issues, accounting firms can optimize their talent strategies to attract top performers and boost retention.

The demand for pay transparency will only continue to grow. Firms that embrace this trend and arm themselves with reliable data will be best positioned to navigate the challenges of the evolving industry. In the words of Dominic Piscopo, “Compensation is usually the highest cost item for accounting firms. If you don’t get it right, it will cause some issues.”

The Hidden Costs of Business License Non-Compliance: How to Protect Your Company’s Reputation and Bottom Line

Earmark Team · April 18, 2024 · Leave a Comment

Imagine your business making headlines for all the wrong reasons – a news crew at your doorstep, questioning why you’re operating without proper licenses. The reputational damage alone could be devastating, not to mention the potential financial and legal consequences. In today’s complex regulatory landscape, effective business license management is more critical than ever to ensure compliance and avoid costly pitfalls.

In a recent eye-opening webinar, Alan Ruttenberg and Vicky Basile from Avalara dive deep into the often-overlooked world of business license compliance. They shed light on the dire consequences of non-compliance and emphasize the importance of effective license management.

Let’s explore the key takeaways from their discussion and discover how your business can navigate the complexities of licensing requirements.

The High Cost of Non-Compliance

Non-compliance with business license requirements can lead to severe penalties and consequences that can jeopardize a business’s success and reputation. Financial penalties can range from small fines to significant amounts impacting a business’s bottom line. At the same time, legal consequences can include misdemeanors, court appearances, and even jail time in some cases.

The most devastating consequence of non-compliance is the potential for reputational damage. Alan Ruttenberg shares, “I always cite this person named Gladys; she had a catering business. She had a license, a food license that had expired… She found out because the local news station did a report on businesses that are out of compliance within the municipality, and they sent camera crews to her catering business and forced their way in and tried to interview her staff about why they don’t have their business license.”

The negative media coverage and public perception resulting from such incidents can be hard to quantify but devastating to a business’s image and customer trust.

The Complexity of Industry-Specific Requirements

Adding to the compliance challenges is that business license requirements vary widely across industries. Some industries, such as healthcare, food service, and construction, face more stringent and extensive licensing requirements due to public health and safety concerns. Failing to meet these industry-specific requirements can lead to severe consequences.

As Vicky Basile points out, “They can also come down and come in and shut down your business. I’ve been on construction sites where the inspector comes and lines all of the contractors up and asks for their licenses. All the electricians and plumbers, and if they don’t have them, they have to leave the job site.”

To effectively navigate these complexities, businesses must develop robust management strategies tailored to their unique compliance needs. This involves staying up-to-date with industry-specific regulations, maintaining accurate records, and proactively managing license renewals and applications.

The Critical Role of License Management in M&A

Business license management becomes even more critical during mergers and acquisitions (M&A). While an issue with business licenses usually won’t jeopardize a merger or acquisition, it can create problems after the deal is complete.

As Alan Ruttenberg explains, “Business licenses don’t just transfer. You don’t buy the business licenses from the company that you’re obtaining. There are big ramifications to not getting a head start on transferring the licenses from the acquired entity to the acquiring entity. This is something that can trip up a lot of M&As.”

Failing to transfer licenses during M&A properly can lead to significant disruptions and risks for the acquiring entity, including the inability to operate in certain jurisdictions or complete ongoing projects. To mitigate these risks, businesses must incorporate compliance considerations into their due diligence and integration processes, ensuring a smooth transition of licenses and permits.

Navigating the Path to Compliance

So, how can businesses navigate the complex world of business license compliance and avoid the pitfalls of non-compliance? Here are some key strategies:

Conduct a thorough audit of your current licenses and permits to identify any gaps or upcoming renewal deadlines.
Invest in robust license management software or services to streamline the tracking, application, and renewal processes.
Stay informed about industry-specific regulations and requirements and develop tailored compliance strategies.
Foster a culture of compliance within your organization, emphasizing the importance of proactive license management.
Seek guidance from compliance experts or legal professionals when navigating complex licensing issues, especially during M&A.

As the regulatory landscape evolves and becomes more complex, the importance of proactive and effective business license management will only continue to grow. Businesses prioritizing compliance will be better positioned to avoid costly consequences and maintain a competitive edge in their industries.

Don’t let non-compliance derail your business. Take action today to ensure your licenses are in order and your compliance strategies are robust. To learn more about the real-world implications of business license compliance and practical strategies for effective management, watch the full webinar featuring Alan Ruttenberg and Vicky Basile from Avalara.

Earn Free CPE for Watching

You can also earn free NASBA-approved continuing professional education credit for watching the webinar. Create a free account and complete the course below to earn your CPE certificate.

The Global Shift Towards Instant Payments

Instant payment systems have been gaining traction worldwide, with many countries already implementing or working on real-time payment solutions. Chandi says, “Currently, more than 70 countries have a real-time payment solution available: instant payments. Either they already have it, are working on it, or will have it this year or next year, including Canada.”

The rapid global adoption of instant payments puts pressure on the US to catch up and remain competitive in the international business landscape. This global shift underscores the urgent need for the US to modernize its payment infrastructure to support the growth and competitiveness of its businesses.

The Challenges of the Current US Payment Landscape

The current payment landscape in the US presents significant challenges for businesses, particularly SMEs. Slow payment methods lead to cash flow issues, hindering business growth and stability. Chandi highlights the severity of this issue, stating, “82% of businesses fail due to cash flow problems. Many of these businesses might have been profitable, but they didn’t have the money in the bank account when they needed to do payroll or pay their rent.”

In addition to cash flow problems, the high costs associated with traditional payment methods, such as credit card fees, eat into profit margins. Fraud risks expose businesses to financial losses and security concerns, particularly with checks. These challenges highlight the urgent need for instant payment solutions to improve cash flow, reduce costs, and enhance security.

The Benefits of Instant Payment Solutions

Instant payment solutions offer a range of benefits that address the challenges businesses face in the current payment landscape. These include:

Improved cash flow: With funds available in real-time, businesses can better manage their finances and invest in growth opportunities.
Reduced costs: Instant payments eliminate the high fees associated with credit card transactions and the processing costs of checks and ACH.
Enhanced security: Real-time payment systems, like Fednow, incorporate robust security measures to mitigate fraud risks.

Chandi adds, “I believe eventually it will end up similar to how we handle ACH. There will be some responsibilities on the bank side to ensure both parties are real and there’s no fraud happening.”

The benefits of instant payment solutions directly address the urgent need for US businesses to modernize their payment processes and remain competitive in the global economy.

The Path Forward

Adopting instant payments in the US is crucial for leveling the playing field for SMEs in the global economy. Accounting professionals and financial decision-makers are vital in advocating for and implementing instant payment systems in their organizations. By embracing instant payments, US businesses can contribute to a more resilient, efficient, and secure financial ecosystem.

To understand the urgent need for instant payments in the US, we encourage readers to watch the full webinar recording featuring Nick Chandi. As an accounting professional or financial decision-maker, now is the time to explore instant payment solutions for your organization and take proactive steps toward implementation. Doing so can help your business clients succeed in an increasingly competitive global market.