MGO CPA | Tax, Audit, and Consulting Services

Topic: Acquisitions

The Strategic Impact of Accounting Outsourcing on Business Operations

Key Takeaways 

  • CFOs now have a significant concern: the lack of qualified accounting professionals. Outsourcing is quickly emerging as a valuable solution to bridge talent gaps and reduce overall overhead costs.
  • Outsourcing enables companies to improve efficiency, scale resources, and leverage others’ knowledge and experience — especially for “non-core” tasks or during periods of transition, like initial public offerings (IPOs) or mergers and acquisitions (M&As).  
  • Relying on external professionals means they focus on selecting, integrating, and managing those tools effectively while you run your business.

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C-level executives today face crucial accounting and finance challenges, including the ongoing shortage of accounting professionals, the struggle to keep up with technology (including AI), and the generally inflationary cost environment. While it may be tempting to view the finance and accounting (F&A) function as an overhead expense to be managed, this approach severely underestimates the F&A function’s strategic impact on business operations. Outsourcing can play a critical role in optimizing the performance and cost of the F&A function, especially when its use is tailored to the company’s specific needs. 

Today’s Common Accounting Staff Concerns 

According to BDO’s 2024 CFO Outlook Survey, 36% of CFO respondents consider the current talent shortage a pervasive risk to their business. A lack of qualified, experienced staff can significantly impede business operations and long-term planning, making staffing concerns a serious threat at any point in the company’s life cycle — from budding start-up to mature company. External accounting professionals can help fill the gaps.  

Outsourcing can effectively augment a company’s current staff, providing much-needed support. Leveraging external accounting professionals can empower companies to meet their accounting and finance demands while avoiding some of the overhead costs associated with full-time, permanent employees. This approach can give the business the flexibility to scale accounting resources while filling any talent gaps, especially during situations where additional accounting and finance support is needed.  

Lack of scale can also be a driving factor to outsource some or all of a company’s accounting and finance functions. Rising labor costs have made maintaining a robust in-house team more challenging than ever. Outsourcing critical functions that do not absorb the full capacity of a staff can be a great way to leverage the advantage of “fractional ownership.” Leveraging an outsource provider for those functions allows the company to experience best-in-class output without the waste associated with underutilized employees. 

Accounting and financial outsourcing can offer a dynamic, flexible solution that enhances a company’s ability to meet its reporting requirements, improve operational efficiency, and strengthen financial planning and analysis. But today’s environment also relies heavily on technology-driven opportunities. 

Keeping Up with Technology

How should companies use tech — which sometimes seems to change at the speed of light — to handle accounting and finance functions? Companies can leverage technology solutions to enhance their accounting and finance functions, driving efficiency and accuracy while freeing up valuable resources for strategic initiatives. 

Finding tech solutions that deliver the best results for accounting and finance is a first step. From cloud-based accounting platforms to advanced analytics tools, the right technology can revolutionize how financial data is used for the company’s benefit by streamlining processes, enhancing data accuracy and analysis, and providing real-time insights. 

But identifying and supporting such technology can be daunting, especially if done alone. 

To choose and implement the best solutions, companies may need help with tech enablement from outside sources. External accounting professionals can provide valuable guidance in many areas, including: 

  • Selecting the right tools, 
  • Integrating them with existing systems,  
  • Training staff to use them effectively, and 
  • Avoiding common pitfalls.  

Generative AI is one of the most exciting advancements in tech. For accounting and finance teams, AI can significantly improve efficiency by automating routine tasks, such as data entry and reconciliation, and providing predictive insights that inform strategic decision-making. Companies may also enhance their compliance capabilities by using AI to address anomalies and risks proactively instead of reactively. However — and this is important — the “human” touch is necessary when using AI, and external professionals can bolster the AI results as well as provide training for internal staff. 

External accounting and finance professionals often can provide proprietary tech solutions including automation and advanced analytics tailored to the company’s specific facts and circumstances. 

Accounting Outsourcing Scenarios 

When should companies consider alternatives to traditional in-house accounting? The short answer — any point in the business life cycle. 

For startups, tapping into the experience and knowledge of an outside firm can be the most cost-effective and efficient way to begin. Building an in-house accounting team may be fiscally difficult for a new venture, but operating without a robust accounting function can leave the company vulnerable. Outsourcing accounting tasks brings in experienced professionals who can set up financial systems, offer strategic analysis and advice, and help ensure compliance.  

Mature enterprises may find that their accounting and finance processes are falling behind widely accepted practices, including the adoption of innovative technology. They may need to leverage external accounting professionals to update their systems and methods, as well as bridge gaps in staffing. 

Companies looking toward a business transition or an exit — think IPO, M&A, or direct sale — will want their finances in good order to attract investors or buyers and be ready when opportunities arise. Outsourcing or augmenting accounting and finance functions can help ensure that financial statements are accurate, transparent, and compliant. Discrepancies and inaccurate financial reporting can discourage investors, buyers, and other stakeholders from proceeding. Additionally, seasoned accounting professionals can provide strategic insights, improve financial efficiency, and ensure adherence to the latest regulatory standards, thereby enhancing the overall value proposition of the company. 

How MGO Can Help

No matter what stage of life your business is in, oftentimes in-house accountants are limited to handle only the basics. MGO has a robust outsourced accounting team staffed by CPAs with diverse industry backgrounds and technical specialties. We can provide you with the right-size service you require, so you can focus on the organization’s other needs. Some of the areas we support include day-to-day accounting tasks, complex financial systems projects, regulatory compliance demands, M&A deals, raising capital, and more. Whether you’d like to augment your team or undertake a comprehensive accounting transformation, MGO can help you move your business forward. Reach out to our Client Accounting Solutions team today to learn more.

Written by John Gauffreau, Tony Huckeby and Jared Carollo. Copyright © 2024 BDO USA, P.C. All rights reserved. www.bdo.com 

Are You Ready to Take Advantage of Rescheduling and Audit Opportunities?

Key Takeaways: 

  • Audit services are crucial for cannabis businesses to navigate industry changes, especially with potential rescheduling on the horizon.
  • Audits can help strengthen your position in M&A deals by providing financial transparency and uncovering hidden risks or opportunities.
  • Comprehensive audits enhance operational efficiency, prevent fraud, and prepare businesses for evolving regulatory frameworks.

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With the potential for rescheduling continuing to move forward, companies and investors need to assess the opportunities that may emerge in the cannabis industry. Have you considered how audit services can help your company thrive in this changing environment?

Here are some key areas where audit services may be beneficial:

Strategic Positioning for Mergers and Acquisition (M&A)

Whether you’re buying or selling a cannabis business, audit services can significantly strengthen your position. By demonstrating financial transparency to potential buyers, you can potentially improve your pricing and valuation. Additionally, streamlining due diligence can shorten the time to close deals and uncover any accounting irregularities or hidden risks — such as tax exposure or liabilities.

Operational Excellence

An audit isn’t just about numbers; it’s about enhancing your business operations. Identifying areas to streamline and reduce costs can lead to significant savings. Moreover, uncovering inefficiencies in your cash flow management and receiving recommendations to enhance your internal controls can improve your overall business efficiency.

Fraud Prevention and Detection

Protecting your business and assets is crucial. A comprehensive examination of your financial records can reveal potential vulnerabilities and spot red flags that may indicate fraudulent activity. Based on audit findings, you can implement stronger safeguards to protect your business.

Regulatory Readiness

While rescheduling may ease some burdens, it could introduce new regulatory frameworks. An audit can help you assess your current compliance status and identify areas that may need attention under potential new regulations. This positions your company to adapt quickly to regulatory changes.

How MGO Can Help

With a dedicated Cannabis practice and personalized audit and assurance solutions based on your needs, we can help you navigate the evolving landscape of the cannabis industry with confidence. Schedule a consultation with Cannabis Industry Leader Scott Hammon today to discover how our audit solutions can benefit your business.

How to Prepare Your Tech Company for a Financial Audit 

Key Takeaways:

  • A financial audit is crucial for tech companies seeking investment or acquisition, providing credibility and insights into financial health and processes.
  • Proper preparation involves assembling the right team, establishing solid financial systems, and gathering comprehensive documentation.
  • Approaching the audit as an opportunity rather than an ordeal can lead to stronger financial practices and a clearer path toward business objectives.

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You have taken your tech company to the next level with a groundbreaking idea and compelling vision. Now, you are eyeing the next big move — going public, courting major investors, or positioning for an acquisition. But innovation alone will not seal the deal; you need a captivating financial story that stands up to public scrutiny and due diligence.

Enter the financial audit. A well-executed financial audit can be a powerful tool for your business, providing credibility to investors and partners while offering valuable insights into your financial processes. With the right preparation, you can transform an audit from a perceived hurdle into a launchpad for your next phase of growth.

Understanding the Goal of a Financial Audit

A financial audit is an independent examination of your company’s financial statements and underlying records, conducted by a certified public accountant (CPA) or CPA firm. The goal is to provide reasonable assurance that your financial statements are free from material misstatement and fairly represent your company’s financial position.

For tech companies eyeing future fundraising, acquisitions, or public offerings, an audit is more than a compliance exercise — it is a crucial step in telling your financial story accurately and building trust with potential investors or acquirers.

Building an Audit-Ready Foundation

Your audit journey begins long before the auditors arrive. Set your business up for success by having these elements in place:

  • Human resources: Staff your team with personnel who have solid financial accounting backgrounds. Their knowledge will be essential in maintaining accurate financial records and complying with relevant accounting standards.
  • Internal systems: Implement accounting platforms to accurately track transactions, inventory, and sales. An efficient accounting system will streamline the process of gathering and presenting financial data.
  • Formation documents: Maintain comprehensive records from your company’s inception with complete capitalization tables, including intellectual property (IP) documentation. This will make all foundational aspects of your business well-documented and easily accessible.
  • Legal support: Engage an attorney knowledgeable in your industry to help protect your IP. They can also assist with contract reviews and regulatory compliance, which are often scrutinized during an audit.
  • Regular period closes: Establish a routine for closing your financial periods (monthly or quarterly) to keep your books consistently up to date. This practice will facilitate the audit process by providing timely and reliable financial information.

Assembling Your Audit Team

Choosing the right team is critical to how efficiently your audit is conducted. Selecting your external team typically includes:

  • CPA firm: Choose a reputable CPA firm with experience in your industry and the ability and resources to grow with your entity. A CPA firm with relevant industry experience will have a better understanding of the specific challenges and requirements of your business.
  • Investment banker: Depending on your transaction type, you might need an investment banker. Investment bankers can provide valuable insights and assistance in structuring and executing your financial transactions.
  • Unrecognized transactions or errors: These may require significant time to research and correct. Proactively reviewing, identifying, and addressing any unrecognized transactions or errors early on will help in avoiding delays during the audit.

Timeline and Planning

Establish a realistic timeline for your audit and subsequent transactions. A well-planned timeline will help in managing the audit process so that all necessary steps are completed on time.

  • Audit duration: Allocate at least one to three months for the audit process, factoring in elements like company size and complexity, quality of accounting records, and completeness of your documentation.
  • Public offering timeline: Keep in mind that going public can take at least three months, and unexpected issues can cause delays.
  • Regular reviews: Regularly review your timeline with your service providers to adjust, as necessary.

Gathering Your Documentation

The success of your audit hinges on the quality and completeness of your documentation. From the C-suite to your front-line employees, all your documentation needs to be up to date and accurate. Prepare:

  • Financial statements: Have your income statement, balance sheet, and cash flow statement up to date to accurately reflect your financial position. Accurate financial statements are essential in providing a clear picture of your company’s financial health.
  • Supporting schedules and notes: Prepare detailed breakdowns of major accounts and transactions, along with explanatory notes for complex items. Supporting materials provide additional context and clarity to your financial statements.
  • Internal controls documentation: Compile documentation of your financial policies, procedures, and risk assessment activities. Internal controls documentation demonstrates your company has effective processes in place to manage financial risks.
  • Contracts and agreements: Gather all significant contracts, including customer agreements, vendor contracts, and loan documents. These documents provide evidence of your company’s legal obligations and financial commitments.
  • Tax filings and records: Have your tax returns and related documentation ready for review. Tax filings and records are essential in verifying your company’s compliance with tax regulations and identifying any potential tax liabilities.

Common Pitfalls (and How to Avoid Them)

Be aware of potential challenges that can delay your audit:

  • Complex transactions: Tech companies often deal with complex financial instruments like preferred stock, stock options, or convertible instruments. Proper accounting for these is crucial. Equip your team with the necessary knowledge to handle complex transactions.
  • Revenue recognition: Follow appropriate guidelines, especially for Software as a Service (SaaS) companies where revenue recognition can be complex. Accurate revenue recognition is critical in providing a true and fair view of your company’s financial performance.
  • Inadequate documentation: Lack of proper documentation can significantly slow down the audit process. Have all required documents complete and readily accessible to avoid delays.

Best Practices for a Smooth Audit Process

Once the audit begins, your role shifts to facilitating the auditors’ work. Your team can contribute to the speed and efficiency of the audit by employing these practices:

  • Respond promptly: Provide requested information and documents in a timely manner. Delays on your end can derail the entire timeline.
  • Maintain open communication: Be transparent with your auditors about any issues or concerns.
  • Stay focused on your objectives: Remember the audit is a means to an end — whether that is preparing for an acquisition, going public, or attracting investors. Keep this perspective to maintain a positive attitude throughout the process.

Embracing the Audit as an Opportunity

Your financial audit doesn’t need to be a stressful ordeal. By approaching it with thorough preparation, open communication, and a focus on your long-term objectives, you can turn this process into a valuable opportunity for growth and improvement.

Remember, the goal is not just to get through the audit — it is to emerge with stronger financial practices, increased credibility, and a clearer path toward your business objectives. With the right mindset and preparation, your audit can be a pivotal step in your company’s journey to success.

How MGO Can Help

We have extensive experience working with tech companies, including serving as the auditor for companies preparing for IPOs, mergers, acquisitions, and other capital-raising activities, as well as tech companies that need an annual audit for a bank or investor.

Our approach includes:

  • Rapid response times: Echoing our firm’s fundamental “Be a Fanatic About Response Time,” we prioritize quick response to all your requests.
  • Automated processes: We integrate automation into our audit process to minimize the burden on your team.
  • Network of resources: We can help connect you with attorneys, investment bankers, and other professionals to meet your needs.

If you need assistance preparing for your financial audit or an experienced auditor who understands your needs, reach out to MGO today. We are here to support you in achieving your objectives and guide you through a successful audit process.

Are You Ready to Take Advantage of Rescheduling M&A Opportunities?

Key Takeaways:

  • Rescheduling cannabis could unlock new merger and acquisition opportunities that companies need to strategically prepare for.
  • Sellers should focus on optimizing financials, tax implications, and valuation to maximize exit outcomes.
  • Buyers must conduct thorough diligence, structure tax-efficient deals, and plan for post-acquisition integration.

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The potential rescheduling of cannabis from Schedule I to Schedule III could open up increased opportunities for mergers and acquisitions (M&A) in the industry. Navigating this new M&A landscape will require strategic preparation.

Whether you are looking to sell your company or acquire new assets and operations, you will need to position your business to properly capitalize on this wave of investment activity. Careful planning is critical to maximizing outcomes.

Preparing for M&A in a Post-Rescheduling World

As you anticipate this regulatory change, it is crucial to prepare for the complexities of the M&A process. Here is how you can position your company to take full advantage of upcoming opportunities.

Exit Strategies: Key Steps for Sellers

1. Books and Records Remediation

To attract investors, your financial records need to be in order. Focus on preparing your financial statements and building a comprehensive data room that investors can easily review. Solid financial reporting will not only boost investor confidence but also help you stand out in the marketplace.

2. Tax Optimization

Understanding the tax implications of a transaction is essential. Structure your deals to minimize tax liabilities and maximize financial outcomes. Engage with tax professionals early in the process to help you achieve the best possible financial results.

3. Audits and Reviews

Depending on the size and nature of the transaction, having audited or reviewed financial statements may be necessary. Even if not required, these statements can increase the likelihood of closing a deal, improve pricing, and reduce the time needed to finalize the transaction.

Acquisition Strategies: Essential Considerations for Buyers

1. Diligence

Conducting thorough diligence is crucial for identifying potential risks associated with an acquisition. This includes financial and tax diligence to uncover any issues that could impact deal terms, pricing, or strategy. Understanding these risks upfront will enable you to make more informed decisions.

2. Structuring

Designing a tax-efficient acquisition structure is key to the transaction’s success and the long-term health of the combined entity. Work with advisors to develop structures that optimize tax outcomes and operational efficiency.

3. Post-Deal Integration

Post-acquisition integration is critical for realizing the anticipated benefits of the deal. Strategic guidance and practical support during this phase will help you optimize both operational and financial performance, leading to a smooth transition and better overall outcomes.

Smart M&A Moves for Buyers and Sellers Alike

1. Quality of Earnings (Q of E) Assessments

A Q of E assessment provides a comprehensive evaluation of a company’s financial performance. For buyers, a Q of E offers valuable insights into the target company’s financial health, facilitating informed decision-making and risk mitigation. For sellers, this detailed analysis helps you identify key negotiation points, leading to better pricing and more favorable deal terms.

2. Strategic Guidance

Both buyers and sellers can benefit from strategic M&A advice tailored to your specific business goals. Engaging with experienced advisors can provide you valuable insights and help you navigate the complex M&A landscape, positioning your company to take full advantage of any opportunities that arise from rescheduling.

How MGO Can Help

With a dedicated Cannabis team and a comprehensive suite of services, MGO is here to help you navigate the complexities of M&A — both now and in a post-rescheduling world. Reach out to our team today for support at every stage of the M&A process.

Is Your Tax Advisor Discussing These 4 Key Tax Developments in 2024? 

Key Takeaways:

  • Businesses must now capitalize Research & Experimental (R&E) expenditures and amortize them over 5 or 15 years, significantly impacting cash flow and project viability for innovation-driven enterprises.
  • The gradual phase-out of bonus depreciation rates necessitates a reevaluation of capital expenditure strategies and their tax implications.
  • Mergers, acquisitions, and international transactions can come with complex tax consequences. Proactively engage with your accountant to navigate compliance, optimize tax positions, and leverage strategic planning opportunities.

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You turn to your tax advisor to learn how the latest tax law changes will impact your organization. But does your advisor reach out proactively to discuss how upcoming changes might impact your business and its tax liabilities?

As we progress through 2024, several significant tax developments may impact how you make business decisions and manage your tax obligations. Is your accountant aware of these changes and, more importantly, actively discussing the implications and opportunities with you?

1. Research and Experimental Expenditures

Internal Revenue Code (IRC) Section 174 was one of the most radical components of the Tax Cuts and Jobs Act (TCJA) of 2017 and continues to create questions for corporate tax departments today. It requires your company to capitalize and amortize Research and Experimental (R&E) expenditures over five years (15 years for the research performed outside of the U.S.) instead of deducting them in the year incurred.

Losing the ability to deduct R&E expenditures can significantly increase your taxable income, impacting cash flow and project viability.

Your accountant should guide you through the implications of this change, helping you maintain records linking expenses to qualified research activities and maximizing your R&D tax credits.

2. Accelerated/Bonus Depreciation Phaseouts

Another significant change from the TCJA that might catch you off guard is the phaseout of accelerated and bonus depreciation.

As a reminder, the bonus depreciation rate was 100% in 2022 but dropped to 80% in 2023. It will continue to drop by 20% each year until bonus depreciation is unavailable in 2027 (assuming Congress doesn’t enact new tax law changes).

This gradual reduction impacts your ability to deduct the cost of capital expenditures, affecting your tax liability and financial planning strategies.

Despite the phaseout, there are still planning opportunities for companies to consider.  For example, you might accelerate planned equipment purchases before year-end, use a cost segregation study to accurately categorize building components into asset classes with shorter recovery periods, and continue to take advantage of Section 179 expensing rules.

Your accountant should proactively discuss these changes with you to help you make informed decisions about capital investments.

3. Foreign Sales – FDII Deduction

The Foreign-Derived Intangible Income (FDII) deduction represents a significant tax-saving opportunity if your company has foreign sales.

FDII is income from the use of intellectual property — legally protected, non-physical assets in the United States used to create an export.

You can deduct 37.5% of your FDII against taxable income, effectively reducing the tax rate on each dollar of FDII to just 13.125%. However, the FDII deduction will be reduced after 2025, at which point the effective tax rate will rise to 16.4% under current law.

Your accountant should actively inquire about foreign sales activities and advise on the potential benefits of the FDII deduction, so you do not overlook valuable tax savings.

4. M&A and Cross-Border Transactions

Mergers and acquisitions (M&A) and cross-border transactions present a complex array of tax considerations.

Cross-border transactions can include any transaction outside of the U.S., including receiving interest or royalties from a foreign entity or making sales in a foreign country (whether to an unrelated third party or a related entity). These transactions can come with transfer pricing considerations, foreign tax consequences, and reporting requirements in foreign jurisdictions.

In the mergers and acquisitions space, your accounting firm can help with various issues, including buy- or sell-side due diligence, risk mitigation, structuring the transaction as a stock sale or an asset sale, analyzing transaction costs, and determining whether you can deduct or capitalize those costs.

Whether you’re contemplating a transaction or have recently completed one, your tax advisor can provide support in navigating the tax implications, ensuring compliance, and optimizing your tax position through strategic planning and structuring.

Unlock the Power of Proactive Advice

The tax landscape in 2024 includes significant changes and opportunities. From how businesses account for R&E expenditures to the strategic implications of FDII deductions, and the potential tax benefits, these developments require careful consideration and strategic planning.

To navigate these changes effectively, engage with a team of advisors who are aware of these developments and prepared to discuss their implications for your business. Reach out to an MGO advisor today.

Five Signs You’re Ready for Outsourced Accounting Support

Executive summary

  • A growing organization is a positive, but along with it usually comes increasingly complex financial accounting.
  • Outsourcing provides businesses of all sizes with an opportunity to manage an array of issues — from staffing shortages or a lack of specific expertise to disorganized or unsecure financial records.
  • Benefits of outsourcing include significant cost savings, direct access to specific accounting knowledge, the minimization of turnover, the ability to scale, access to tools and processes, and flexibility.

Many CEOs and business leaders are experiencing challenges in the aftermath of the COVID-19 pandemic, including changing customer trends, aggressive competition, emerging digital technologies, and the new normal of employee expectations for workplace flexibility.

These uncertain economic forces and cultural shifts are putting increased pressure on staffing for organizations of all sizes – especially fast-growing ones. While these difficulties are difficult to overcome, they are also an opportunity to change the “status quo” and level-up back-office performance.

For leaders navigating the uncertain tailwinds of the pandemic and planning to enter a new era of growth, outsourcing represents a powerful opportunity to address any staffing issues or business challenges. It empowers you to access specialized insight on a temporary basis, create value ahead of a major transaction, manage overhead costs, and modernize and revitalize business processes.

A recent study showed that 59% of all businesses utilize outsourced resources and that accounting is the most commonly outsourced function. So, how do you know if outsourcing your accounting function is right for your organization?

In this article we’ll look at five indicators that this strategy might be right for you and detail the key benefits to outsourcing or augmenting your accounting function.

Five signs your business may benefit from outsourced accounting


Here are some questions you should ask yourself to determine if your organization would benefit from outsourced accounting services:

  1. Is your business growing rapidly?

If you’re experiencing a significant influx of revenue, first off, great work! Your business model is proving out and you’re on the fast-track to success. But what is happening to your expenses, profitability and working capital? Depending on your answer it could mean that your accounting needs are evolving, the risks of a breakdown are higher, and overall, there is simply more at stake. It may be time to confirm that your current in-house team is qualified and staffed appropriately to handle these new responsibilities.

  1. Are you struggling to keep up with your accounts receivable or payroll?

One way to get a firm answer to whether your team is understaffed is if you’re missing key deadlines or struggling to get timely collection of cash from your accounts receivable. The inability to collect and follow-up on AR is essential to funding current and future growth and is directly connected to meeting your payroll commitments – one of the largest expenses of any business. If anything falls behind, you can find yourself in a difficult position if you do not have the ability to access cash or financing.

  1. Are your financial records organized and producing usable data?

Your accounting function does more than compliance, it should help guide your organization’s financial hygiene. Organized financials tell a clear story of earnings, spending, and investment, so you can make informed decisions. An over-worked or inexperienced accounting team will be working furiously to keep up with compliance and may not have the capacity, or necessary experience, to provide guidance on your financial scorecard to accrete value to the organization.

  1. Do your accounting needs fluctuate significantly throughout the year?

If your business experiences big shifts in labor productivity based on the calendar year and your taxes filings are late with significant overages from the tax preparers, or your audits have a significant number of adjustments, that may mean your accounting team lacks capability. Striking the right balance between hiring quality talent and the speed of bringing new hires up to date with company procedures can be a challenge. Outsourcing your team can deliver the resources you need, when you need them, and limit costs during the slower periods.

  1. Are you concerned about financial security and checks and balances?

If your internal accounting team is one or two individuals, you may be open to hidden risks. An independent team can provide the checks-and-balances that help mitigate the risk of fraud and asset misappropriation.

If you answered yes to any of these questions, you should consider outsourcing part or all of your accounting function. With an outsourced accounting team, you gain immediate access to trained, knowledgeable staff with the knowledge you need in technical accounting. The right outsourced resources can help your business grow faster and run more smoothly — often at a lower price than building an internal accounting department.

Benefits of outsourced accounting services


1.Cost and time savings

Maintaining full-time employees can be costly — and for most organizations, labor costs are some of the highest expenses. By relying on an outsourced team, you can devote your time to growing your business and spend less time managing accounting.

  1. Direct access to specific accounting expertise

Every company is different, which means every company’s needs are different. By outsourcing, you have access to the service you need when you need it. An outsourced team will bring familiarity with an array of accounting and reporting standards, including GAAP, IFRS, GASB, etc. Plus, they can provide specific experience with M&A transactions, raising capital, scaling, or downsizing operations.

  1. Minimize turnover disruption

In a smaller organization, each employee is vital to the business’s success. When you lose one, the disruption left in their wake can provide additional challenges. An outsourced accounting team will never leave you in the lurch, so you can focus on what is most important: generating revenue.

  1. The ability to scale

If your organization has grown quickly, you may experience growing pains when your fortunes suddenly shift. In boom times, you may need to hire more staff to meet demand. But that also means you may find yourself laying off employees in a downturn. Outsourcing allows you to handle more work without hiring additional employees or scale back if your capacity shrinks.

  1. Tools and processes

No matter what your organization’s size, you should always try to keep your overhead costs minimal. By outsourcing, you can save money on specific tools or processes you might otherwise need to function. The right outsourced team will provide the know-how and equipment you need to succeed.

  1. Flexibility

By outsourcing certain jobs, you can plan — and pivot, as needed — depending on your organization’s needs. This is especially relevant in the case of needing specialized guidance. If you’re planning a major transaction or other market move, an outsourced CFO can provide tactical expertise when and where you need it.

MGO can help

As your organization grows, your financial accounting needs become increasingly complex. Because your in-house accountants may be limited to handle the basics, outsourcing to professional teams with specialized knowledge and experience can provide precisely the kind of service you require — and give you the time you need to focus on the organization’s other needs.

MGO has a robust outsourced accounting team staffed by CPAs with diverse industry background and technical specialties. We’ll provide the right-size solution to your organization’s needs. Areas we support include day-to-day accounting tasks, complex financial systems projects, regulatory compliance demands, and support for M&A deals, raising capital, and other major transactions.

Whether you’re interested in simply augmenting your team with additional financial knowledge, or undertaking a complete accounting transformation, we can help you with the people, processes, and technology you need to move your business forward.

To explore your options and start along the path to organizational change, contact us.

Five Reasons Private Companies Should Adopt Public Controls

Often viewed as a “public company problem,” private organizations may want to consider implementing internal controls similar to Sarbanes-Oxley (SOX) Section 404 requirements. The inherent benefits of a strong control environment may be of significant value to a private company by providing: enhanced accountability throughout the organization, reduced risk of fraud, improved processes and financial reporting, and more effective inclusion of the Board of Directors.

Private organizations, while not always smaller, often have limited resources in specialty areas, including accounting for income tax. This resource constraint —the work being done outside the core accounting team — combined with the complexity of the issues, means private companies are ideal candidates for, and can achieve significant benefit from, internal controls enhancements. Thinking beyond the present, the following are five reasons private companies may want to adopt public-company-level controls:

1. Future Initial Public Offering (IPO) – Walk before you run! If the company believes an IPO may be in its future, it’s better to “practice” before the company is required to be SOX compliant. A phased approach to implementation can drive important changes in company culture as it prepares to become a public organization. Recently published reports analyzing IPO activity reveal that material weaknesses reported by public companies were disproportionately attributable to recent IPO companies. Making a rapid change to SOX compliance can place a heavy burden on a newly public company.


2. Merger and Acquisition Deals – If the possibility of the company being sold to an M&A deal exists, enhanced financial reporting controls can provide the potential buyer with an added layer of security or comfort regarding the financial position of the company. Further, if the acquiring firm has an exit strategy that involves an IPO, the requirement for strong internal controls may be on the horizon.


3. Rapid Growth – Private companies that are growing rapidly, either organically or through acquisition, are susceptible to errors and fraud. The sophistication of these organizations often outpaces the skills and capacity of their support functions, including accounting, finance, and tax. Standard processes with preventive and detective controls can mitigate the risk that comes with rapid growth.


4. Assurance for Private Investors and Banks – Many users other than public shareholders may rely on financial information. The added security and accountability of having controls in place is a benefit to these users, as the enhanced credibility may impact the cost of borrowing for the organization.


5. Peer-Focused Industries – While not all industries are peer-focused, some place significant weight on the leading practices of their peers. Further, some industries require enhanced levels of security and control. For example, cannabis companies with a heavy regulatory burden, industries with sensitive customer data like lifesciences, and tech companies that handle customer data, often look to their peer group for leading practices, including their control environment. When the peer group is a mix of public and private companies, the private company can benefit from keeping pace with the leading practices of their public peers.

Private companies are not immune from the intense scrutiny of numerous stakeholders over accountability and risk. Companies with a clear understanding of the inherent risks that come from negligible accounting practices demonstrate their ability to think beyond the present, and to be better prepared for future growth or change in ownership.