Why Cloud Accounting Makes Sense for Your Company - Part 2
December 16, 2020
In this episode of The Bottom Line, Tim Schuster, Senior Manager in the Private Business Services Group, has a conversation with John Delalio, Managing Director of EisnerAmper’s Outsourced Accounting Services Group. John discusses why Cloud Accounting is an alternative for your business, especially during COVID-19, and how cloud accounting can help if your considering raising capital or selling the business.
TS: Oh, glad to have you back. So John, why don't we kick this off, tell the listeners a little bit about yourself.
JD: Great, I run a outsourced accounting division of EisnerAmper that's designed for small businesses. It's called EisnerAmper Cloud Accounting. Basically, using the latest cloud-based accounting technology, we're able to deliver all the functionality and value of an accounting team to small to mid-sized businesses at a fraction of the cost and hassle of hiring a full team.
TS:Wow, that's fantastic. So, obviously COVID-19 has had some major issues with some of our clients. The pandemic has just been just a major hindrance on some businesses. Have you seen more companies looking towards cloud accounting? Do you have any examples of businesses that have recently switched over?
JD: Sure. I think one of the things over the last time of COVID that has been nice is that we've actually been able to really help our clients who are in an out source mode, or thinking about it, survive what's going on. There's two ways that we've been able to do that. The first is, we provide accurate data. When it came time to fill out the PPP applications, or figure out where the cash was, or make decisions about, do we do this, do we do that, the clients were making decisions with accurate data and not a dartboard. Really, really important, and it was a great way we could help our clients.
The other thing that we were able to do is, because our platform is pretty flexible and we've got to, not to be bragging, but we've got a great team at EisnerAmper where we help our clients pivot quite a bit when business opportunities arose that were unexpected.
Let me give you an example, we have a client that is a foreign entity that was coming to the United States to basically bring their software product to the US. They did not want to hire people in the US, they didn't understand the US laws, they barely got a building. They hired our cloud accounting team to do what we call Coming to America. So, we worry about running accounting operations in the US side and the tax, international tax, and we got them running. They were in business, we started up this business in January, and we're off to the races. Well, then COVID hit in March, and their business, which was wholesale, actually wholesale in the restaurant business. So, it got hit hard, but they were able to pivot and actually start up a second company that was a B to C play, where they were actually able to take their technology that was providing food to restaurants and provide it directly to people in an e-commerce format. We were able to help them do that within a very short timeframe. So, now they have two businesses that are both operating, so that was a good story out of this mess, quite honestly.
TS: Yeah, really. That's truly, truly amazing. Now, let's actually flip the script on that, and let's say that here's a company considering raising money, or even perhaps selling itself, how can cloud accounting help in this area?
JD: I have a lot of clients who are small businesses, I have a lot of friends that run small businesses, and there's a uniqueness to a small business. Generally, the product is very personal, there's family members involved. The accounting is kind of taking second hand. When buyers come to look at a business, they're like, all right, you're a family owned business. All right, let's look at the books. They've got a bit of skepticism before they even come to your company. When you hand them accurate financials that are closed every single month, and there's a team available that can answer their questions and allow that deep dive, there's two things in an acquisition, right? There's EBITDA and there's your multiplier. Those are two main things when selling a business or buying a business. Well, EBITDA is correct, but correct books changes your multiplier. So, it can really have a significant impact on the valuation of your company.
TS:Exactly, exactly. Before I wrap up this podcast, John, are there any parting words you want to leave our listeners with?
John Delalio: I guess what I would say is, the sooner the better. What’s the adage? “When is the best time to plant a tree? Today.
I believe that, really, because I think if you have a business and you're in operation, get yourself some accurate data, use your accounting data to run your business and provide value to your customers and your investors.
TS:That's awesome. Hey, John, thanks again for this useful information.
JD: You're very welcome, Tim.
TS:Before we close out this podcast, I like to provide one of my famous New Jersey fun facts, and while not a New Jersey fun fact, per se, I would like to keep to the theme of computers. So, this is interesting. Apparently, the password for the computer controls of the old nuclear tip missiles for the United States back in the day, used to just a string of zeros for eight years, who knew!
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