The trials and tribulations of Enron and its auditors at Arthur Andersen are highlighting the importance of a company having qualified accountants and financial controllers on its team. Now, more than ever, business managers from firms of all sizes are finding good financial managers are a good investment in the future of their companies. For smaller firms, finding the right resources at an affordable price can make an important difference. San Diego has a wide selection of both national and local service providers who can meet their needs on modest budgets.

Free Advice

One of the best places to start a search for help in financial management is the free advice offered by service providers to market their expertise and educate their clients. Blum & Clark, for example, publishes an online newsletter. A recent issue makes a strong case for getting professional help: “Many small business owners often have no idea of what works financially to grow their business. That’s not surprising, because they got into business because they were good in their specialty, not accounting,” asserts CPA Derek Maiorano in the firm’s April newsletter.

Elsewhere, Leaf & Cole LLP publishes “Tax and Business Alert” each month. Many agencies are pleased to offer advice on how to get the most out of their services.

Spherion, for example, a Fortune 500 company, matches financial consultants with business clients. “Companies like Spherion allow you to customize a solution with lots of skill sets, as diverse as cost accounting for manufacturing, acquisitions or due diligence,” says the firm’s Susan Pace. “We can customize a team.”

Jeff Litteken of Abacus Staffing says his firm’s rigorous testing of applicants’ strengths helps it match client needs to consultant skills. “We typically bring in someone with industry background so that the ramp-up time is less,” Litteken says.

Looking at the bottom line, Robert Scherer of The Accounting Group says, “If a company needs a CFO for more than three days a week, it pays to hire its own employee. Otherwise, they can save $35,000 to $50,000 a year with an outsourced CFO.” The company bills on an hourly basis for its chief financial officer and controller functions.

Pay As You Grow

An additional advantage to outsourcing for growing companies is the spectrum of services available. “A company that is going to grow can get a wider skill set from outsourcing than internally,” explains Linda Rose, who runs K Linda Rose & Co. An additional advantage of her firm’s service package is its application service provider system, which enables clients to use software and computers hosted by the firm without making a significant investment for their own software and systems.

In addition to skills, software and systems from the outside, professional services firms can contribute talent that does not live in the community. Litteken cites the Washington, D.C., area as a good source of talent for San Diego area companies which seek support in applying for federal funding or government contracts.

Several software products are targeting the market for financial management at small and mid-market companies.

Intuit’s Quick Books, Oracle Small Business and perennially popular Peachtree Accounting provide software packages to handle day-to-day financial management. The price is right for do it yourselfers — package software starts at about $1,000.

Software savvy managers who want to manage their own financial reporting but not be entirely on their own have a flexible alternative: retaining one of the dozens of certified professionals in the San Diego area who can help put in place customized applications.

Intuit has designated 200 local experts as ProAdvisors for its QuickBooks Program. Jayne Millum has that designation at The Accounting Group, as does Brian Redlin at Considine & Considine. Another alternative is the Quick Books support network, which provides financial software expertise for a flat fee or Intuit’s own telephone support on a pay-as-you-go program.

Oracle Small Business offers professional consulting by telephone, for an annual fee starting at $600.

Clients in need of traditional full-service help also can participate in a pay-as-they-go plan.

Barsa & Associates President Jo Barsa emphasizes this approach as “cost effective because you only pay for what you use. So our typical client will pay $2,000 to $5,000 per month for full service. The advantage is that the client has no additional costs for software or facilities and has access to sophisticated software so we can give them a lot of functionality. Our accounting department is available 45 hours a week, not just part time.”

Even small companies will find the accounting giants have the full service they are looking for. KPMG, Deloitte + Touche, PriceWaterhouseCoopers and Ernst&Young are the best known quartet in financial services. Those four, which collectively share the business of the Fortune 500, encourage small business clients as part of their own plans for growth. Deloitte + Touche tracks the fastest growing 500 companies in America as part of its data services, and PriceWaterhouseCoopers’ Money Tree Survey has become the benchmark book of the venture capital industry.

Get What You Pay For

After a business has selected a financial management service, it can learn to manage that effort for better results. Spherion’s Susan Pace coaches clients to have an internal manager run the project. “Typically, a client is going to do a good part of the preparation,” Pace says. “If they engage Spherion, the agency can provide a lot of that preparation. I always encourage clients to engage a consultant part time at the very beginning of the project and use their expertise to estimate how long it will take for individual modules.”

Pace finds good consultants also provide one-on-one training of a client’s internal staffs, transferring valuable skills such as SEC accounting or preparing for a stock offering.

Financial professionals also can do much more than quick books and bill paying — they can work with clients to streamline financial policies so ongoing financial management is easier for everybody.

As Litteken points out, “We also help with purchasing procedures and policies, and help avoid pitfalls.”

Barsa outlines a typical program as: “We design a chart of accounts and policies for who approves what transactions at what levels and we process accounts payable from our office. We provide them with forms, do all their payroll, set up weekly schedules for checks and the monthly cycle for financial statements. We also stay involved in business transactions going on and can set up employee manuals with HR standards.”

Outsourcing financial management also can build the foundation for an in-house financial management team when the time is right. The Accounting Group, for example, provides direct hire services with the advantage of understanding its clients’ financial management needs by having worked with them on a regular basis.

Barsa has had similar experiences of seeing a customer outgrow her services. “For some clients, this is a temporary solution,” she says. “As the company starts to grow and is ready to add its own staff, we can hook them up to our systems so we can transition functions to their staff. We also sell and implement accounting software and help recruit the controller or accounts payable staff.”

Success stories speak for themselves. Rose cites Cargo Technology, which was able to customize its financial software for the special financial practices of the packing and shipping industries with help from Rose professionals. The Accounting Group notes its success at Pacific Building Group, where annual revenue grew from $10 million to $50 million as it set up a financial management program and ultimately hired a corporate controller.

Whether a growing business uses financial professionals for immediate savings or to build a foundation for its future finance staff, these success stories show that when it comes to managing money it pays to go with a pro.