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“In light of the breadth and nature of the comments from our issuer community, and others, NASDAQ has
determined to withdraw the proposal so that we may adequately consider these comments. NASDAQ remains committed to the highest standards of corporate governance, and believes it is important that listed companies have appropriate mechanisms and processes in place to review risks and the system of internal controls. It is our intent to revise the proposed rule, taking into account the comments, and resubmit it. We will of course keep you updated as things progress…”

NASDAQ Proposes Internal Audit Requirement

The NASDAQ Stock Market LLC (NASDAQ) filed a proposed rule change with the Securities and Exchange Commission (SEC) on February 20, 2013 requiring all NASDAQ-traded companies to have an internal audit function. Currently, companies traded on the NASDAQ are not required to have an internal audit function, although in accordance with the Sarbanes-Oxley Act (SOX), they are required to maintain internal controls over financial reporting. This rule is still in the proposal stage, however if approved, would require companies listed on NASDAQ on or before June 30, 2013 to have an internal audit function established no later than December 31, 2013.

Why would NASDAQ have proposed this rule? NASDAQ has indicated the proposed rule is designed to protect investors and the public interest by (a) ensuring that listed companies have a mechanism in place to regularly review and assess their system of internal control, and (b) make sure that management and the audit committee are provided with ongoing information about the company’s risk management processes and system of internal control. Further, New York Stock Exchange (NYSE)  listed companies have been required since 2003 to maintain an internal audit function (with certain exclusions such as closed-end and open-end funds registered under the Investment Company Act, passive investment vehicles, foreign companies and companies that list only debt or preferred stock). The NYSE implemented this change in 2003 just before the SOX requirements went into effect, presumably to ensure that companies had the function in place to oversee the SOX regulatory requirements.

What are the Pros and Cons of this Rule? The positive aspect of this rule is the integration of the Internal Audit function into the organization’s overall governance structure to provide oversight for compliance with financial reporting and other technology and operating requirements. The internal audit function is important for companies, and will provide an independent, unbiased and objective viewpoint of financial and operational business activities and the performance of management. The negative aspect of this proposed rule is that smaller organizations with limited complexity or operations and effective management oversight of all business activities will incur an additional cost burden that may be questionable as to its benefits.

Will this Rule Be Approved? It’s uncertain, but the SEC has received a large number of concerns, questions and objections against the new rule. Most parties believe there should be a minimum size requirement to implement the rule ($100 million market capitalization was recommended by several responders).

One executive was more colorful in her feedback to the proposed rule by quoting Ralph Waldo Emerson: “Foolish consistency is the hobgoblin of little minds”.

Want to Read More? Here’s a link to a Wall Street Journal article on the proposed rule: http://blogs.wsj.com/riskandcompliance/2013/04/01/nasdaq-may-amend-or-withdraw-internal-audit-rule/

How can Bridgepoint Help? Bridgepoint’s Risk Services practice has seasoned professionals skilled at assessing risks and implementing internal audit functions in companies. We can provide assistance to address the impact of the proposed NASDAQ rule from implementation to execution of an internal audit function that “fits” your organization.  We believe that a value-added internal audit function can independently assess risks and controls as well as help drive company performance. We also are staying apprised of latest NASDAQ requirements for you.

Contact John Sorrells (JSorrells@bridgepointconsulting.com) or David Roe (DRoe@bridgepointconsulting.com) if you have any questions.

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• Mark Friedman, Accruent
• Eddie Machaalani and Mitchell Harper, Bigcommerce
• Dan Graham, BuildASign.com
• Bob Pruitt, Cal-Tex Protective Coatings
• John Erwin, Carenet
• Glenn Garland and Jim Stimmel, CLEAResult
• Rony Kahan and Paul Forster, Indeed
• Veronica Edwards, InGenesis
• Kendra Scott, Kendra Scott Designs
• Chris Hester, Kinnser Software
• John Arrow, Mutual Mobile
• R. Paul Deere, Tolteq Group

The Tingari-Silverton Foundation Social Entrepreneur finalists are as follows:

• Karen LaShelle, Creative Action
• Joyce McDonald, Frameworks
• Ronda Rutledge, Sustainable Food Center
• Max Elliott, Urban Roots

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10 Important Considerations for Any Company that Trades Financial Derivatives

The Dodd–Frank Wall Street Reform and Consumer Protection Act, known as Dodd-Frank or DFA, was signed into law in 2010 in response to the financial crisis of 2008. Enacted to reduce risk and increase financial system transparency, Dodd-Frank has brought about the most significant changes to financial regulation since the Great Depression. According to a high level summary posted by the U.S. Senate Banking Committee, Dodd-Frank proposed eight areas of regulation as follows:

• Regulate Credit Cards, Loans and Mortgages
• Oversee Wall Street
• Stop Banks from Gambling with Depositors’ Money
• Regulate Risky Derivatives
• Bring Hedge Funds Trades Into the Light
• Oversee Credit Rating Agencies
• Increase Supervision of Insurance Companies
• Reform the Federal Reserve

Companies that are a party to a financial derivative transaction (this might be an interest rate hedge or a swap transaction of a commodity) are subject to the requirements imposed by DFA. The type of transactions and the type of company will dictate the compliance requirements.

It’s complex. While many critics disagree with the financial reforms of Dodd-Frank, its complexity can’t be argued. Markets and regulators are still wrestling with the complicated implementations. In addition to every aspect of the financial industry, it has heavily affected several specific industries. The remainder of this piece will provide some additional implications of Dodd-Frank to companies in the energy industry, specifically companies dealing with derivative contracts.

What does Dodd-Frank mean for energy companies? The short answer: centralized clearing and exchange trading of swaps and much stricter oversight and reporting requirements – especially for oil, gas, power and utility companies that are registered as swap dealers or major swap participants. Dodd-Frank brings all energy swaps under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC). This regulatory framework contemplates transforming the over-the-counter (OTC) market for swaps into a market with strong similarities to the futures market. In addition, organizations will be required to replace bilateral swap arrangements with a centralized swap system that standardizes reporting and reconciliations.  If you are subject to the requirements of DFA, you may have to revise your trading practices, internal processes, company agreements, and capabilities to record and report derivative transactions. The following will help your organization assess trading activities and whether or not it’s impacted by DFA.

Important considerations and questions for energy companies that trade derivative transactions

• Ensure swap transactions are periodically tested against definitions and thresholds of a swap dealer and major swap participant, and results are documented and retained.
• Upon trade execution, are transactions for hedging purposes labeled and documented as such, that may fall under the definition of a swap (including the often overlooked embedded option in a physical contract)?
• Are individual swap transactions tagged and identified as such, and are mechanisms in place to quickly aggregate swap transactions across the entire organization?
• Can the organization aggregate and monitor position limits daily?
• Calculate potential collateral requirements for swap transactions that will qualify for a clearing exemption.
• Has the organization amended the International Swaps and Derivatives Association, Inc. (ISDA) and other master agreements to reflect new DFA rules, including the identification a reporting party to comply with reporting requirements?
• Modify approach of transaction execution with capital review of counterparties and dealers. Also evaluate viability of alternative transactions such as futures and physical contracts.
• Identify which swaps will migrate from OTC-brokered negotiations to an electronic SEF (Swap Execution Facility) or through a DCM (Designated Contract Market).
• Develop real-time communications and data interfaces with SEFs, DCMs, and SDRs (Swap Data Repositories) are in place for transaction and compliance reporting.
• Is data necessary for periodic CFTC reports easily accessible, stored and retrievable for up to five years after the transactions’ settlement or expiration?

For more information, or if you need help navigating Dodd-Frank or addressing the aforementioned list of considerations, please contact us. John Sorrells, 713-594-6307, JSorrells@BridgepointConsulting.com  or Ross Warriner, 832-465-5590, RWarriner@BridgepointConsulting.com.

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Here’s a brief summary of the conversation topics among the participants:

• Different motivators: Understand what drives your stakeholders’ decisions. For example, company management may view internal audit as a “value add” function to supplement and support company initiatives/growth. Whereas, the audit committee may view internal audit as primarily a compliance function to support the board’s risk management responsibilities. Different approaches may be required to maintain independent and objective, but “mutually aligned” relationships with both groups.
• Reporting structures: A common organizational structure of internal audit is reporting functionally to the audit committee and administratively to the CFO. Some have experienced challenges with this structure such as differences of opinion regarding scope and budget. Reporting administratively to the General Counsel or CEO may be considered a best practice.
• Communication: Prevent surprises (a.k.a. turmoil). Maintain open lines of communication with the executive management (CEO or CFO) and the audit committee, including formal or informal updates on a quarterly or defined, consistent basis. Update the executive team before reporting to the audit committee. In some cases, it’s a good practice to get with the General Counsel beforehand as well.
• Know your audience: Different people have different ‘hot buttons’. If you have a new Audit Committee Chairperson, get to know that person. For example, if your Audit Chairperson has previous experience in dealing with certain types of issues or industries, anticipate questions and inquiries that are similar to this person’s previous experiences.
• Face time: A best practice to consider is for the audit committee to periodically meet with the audit team, in addition to the internal audit executive, to further support communications and create a positive relationship.
• Culture: Yes, it’s true. The company’s culture often dictates the formality of the reporting lines between internal audit and its constituents.  The more “corporate” the environment, expect to have more formal reporting processes. Even if you exist in an informal culture, however, it’s still important to maintain solid relationships and a consistent reporting line.
• Trust: In the end, relationships between internal audit and stakeholders come down to trust.  Having a true understanding of the business and relevant risks, along with board level and management expectations, will help foster the best relationships as an independent, trusted advisor.

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Attendees included Bill Patterson, Principal, Dawn Ragan, Managing Director, and Gina Budd, Director of Marketing. Ragan is currently the Treasurer and Secretary and a member of the Board of Director’s for the TMA Dallas Chapter.

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When the time comes, potential buyers will ask hard questions and request information that supports the value of the business. Owners should have a plan to intentionally and proactively address critical business, legal and operational information. Time is money — acquiring companies want the information to be right the first time. The more organized and prepared, the easier the due diligence process will be, and the more likely a company will be poised for a successful transaction.

Accounting Clean Up. Acquirers expect two to three years of financial information: balance sheets, statements of operation and statements of cash flow, with general ledger accounts reconciled. While audited financials may not be required, they will ease the concern of any buyer. Revenue recognition is often a significant issue, particularly if the acquirer is a public company. A private company may be more lax, whereas auditors for a public company will expect all aspects of this to be thoroughly addressed.

Lender and Investor Agreements. Companies should maintain a current capitalization table, or schedule of all stockholders and holders of agreements that offer a right to purchase equity. This includes stock options, warrants, restricted stock, preferred stockholders, convertible note holders, or anyone that’s been promised equity in a written and signed agreement.

Customer Contingent Liabilities.  Compile obligations the company has entered into in the ordinary course of doing business. This includes product/service warranty terms, rebates/discount and rights of return. There are many nuances within that a buyer will consider for forecasting, contingencies, etc.

Contract Database. Sellers should disclose any legal contract still in effect. This often becomes a fire drill that can be avoided by maintaining a contract database. Many contracts have change of control requirements, termination clauses in case of control change, etc. There may also be commitments for product upgrades, etc. that are notable. Active non-disclosure agreements or confidentiality agreements should also be housed here. And make sure all contracts have been signed by all parties to the agreement.

Governance Documents. Company formation documents must be presented to potential buyers. Organizations should structure their legal entity in a manner to anticipate a transaction. Sloppy governance documents often scare away a potential buyer, so maintain a disciplined approach around all governance meetings (board, committees, etc.) with a schedule following corporate document requirements and documented minutes.

Legal Protection. Is the company’s intellectual property protected? Any proprietary IP will increase the value of a business but can diminish the value if the company doesn’t properly protect it. Also, the company should have a full understanding of outstanding litigation and claims by third parties. Acquirers may use contingent liability scenarios to require an escrow of a portion of the sales proceeds until uncertainty of these issues is fully resolved.

Human Resources. Companies should be diligent about keeping HR in compliance with the myriad of related rules and regulations.  Maintain a master employee database that includes all current and historical employees, along with agreements that are signed by all parties, including clearly defined terms regarding intellectual property ownership. Additionally, maintaining the appropriate classification of employee status (contractor vs. W-2) is critical.

Information Technology. Companies should have stringent IT policies and procedures around document retention, disaster recovery and other IT infrastructure systems. This will demonstrate that the business has been careful about system access and loss of trade secrets and company data.

Data Room. Once ready to “go on the market”, sellers should set up a virtual data room so potential buyers can access all the important information. This also enables the seller to track who is accessing which information for how long, etc. There are several options to use such as Drop Box, plus there are services that set up secure data rooms especially for acquisitions.

Be prepared. The Boy Scout motto applies to business too. To maximize success in business – especially for a sale, companies should always “be prepared”. Management who employ good business practices will increase the value of their businesses in the long run.

About the author: Bill Patterson is a Principal with Bridgepoint Consulting LLC, an Texas-based professional services firm that provides financial, management and technology consulting.

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Johnson presented about how internal audit can be more than a “gotcha” function and can provide real value to school districts. The session provided audience memebers with an increased understanding of what internal audit really involves and the benefits it can deliver. Here is a summary of topics that Johnson covered:

• Enhancing fiduciary responsibilities: Every school district is ultimately responsible for providing the best services possible to its students. This starts with “tone at the top” governance that cascades from the Board to all district personnel. Internal audit can enhance the effectiveness of district operations by ongoing assessment, monitoring and recommendations.
• Assessing and managing risks: Internal audit has evolved beyond ticking and tying numbers from the business office to assessing risks across the entire district.  The result of district-wide risk assessment enables audit activity that can be focused on the areas in most need. Performing and routinely updating a thorough risk assessment, with consideration to the internal control environment, provides the foundation for an effective audit plan.
• Fraud prevention/detection: Fraud happens. Even in your district. There is no silver bullet to totally prevent fraud. However, internal audit can serve a crucial role with risk management through its presence and monitoring role.
• Improving systems, processes and internal controls: Internal audit can be a trusted advisor without compromising independence. An effective function does not only spotlight negative findings, but recommends solutions to create valuable systems, processes and controls.

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As a result of the combination, Liz Harder, recruiting industry veteran and owner of Harder Consulting, became an equity partner at Bridgepoint.  Harder will lead the overall strategy and operations for the firm’s combined recruiting practice as well as a separate temporary staffing division of Harder Consulting, which will be rebranded and operate separately as B360 Solutions. Three additional recruiters and 15 consultants from Harder Consulting have also joined the combined group.

“We’re excited about blending Harder’s knowledge and expertise in the recruiting arena with Bridgepoint’s broader suite of services,” said Bob Smith, Principal at Bridgepoint Consulting. “We have known Liz professionally for many years and truly respect her and the business she has created. We believe she will be a great addition to our team.”

In addition to Recruiting, Bridgepoint’s other practice areas include CFO Services, Financial Operations, IT Consulting, GRC (Goverance, Risk Management & Compliance) and Business Turnaround & Restructuring Services. Prior to the merger, Bridgepoint had 95 employees. With the addition of Harder Consulting recruiters and consultants, the headcount has reached 110 employees.

“I seized a great opportunity to align our core competencies with a highly reputable consulting firm like Bridgepoint,” said Liz Harder, owner of Harder Consulting. “This was a strategic opportunity for both of us to combine our complementary resources to strengthen our practices.”

Bridgepoint attributes their expansion efforts to increased activity in the market that drives the need for their professional services combined with a team of outstanding team of consultants who are assisting their clients.

“When our clients are active and growing, that’s when they need us the most,” said Smith. “Our team of quality professionals and their ability to deliver excellent client service enabled us to serve more than 200 clients in 2012 alone.”

Bridgepoint’s long-term plan is to continue to methodically grow and scale to meet the needs of clients throughout Texas with emphasis on Austin, Dallas and Houston.

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“We are thrilled to have been chosen by TRS to partner on this critical, long-term endeavor,” said Michael Johnson, Bridgepoint Consulting principal and project lead, “Our goal is to implement a cost effective, efficient, and sustainable program of business and technological processes that enables TRS to serve the expanding and ever-changing needs of its members,” said Johnson.

Through a series of defined projects, Bridgepoint will provide an independent assessment and provide recommendations and best practices to the TRS Board of Trustees and Executive Director that will improve overall governance and management of the agency. The program will provide for the collection and maintenance of accurate and reliable data, expanding the number of automated processes, and incorporating modern technologies.

The Bridgepoint team of four key members began work with TRS on January 7. The team is engaged on the project through 2017 with an option of two one-year renewals. They will coordinate with all staff, vendors, contractors, and oversight bodies involved with TRS.

“After an extensive six-month RFP process, we selected Bridgepoint because we had the confidence they were the best fit to support TRS’ monumental undertaking” said Brian K. Guthrie, Executive Director, TRS, “We were impressed with Bridgepoint’s experience and knowledge of business and IT transformation and believe their expertise will help us deliver successfully on this important project.

About Bridgepoint Consulting: Bridgepoint Consulting is a leading Texas-based professional services firm that provides strategic services and highly qualified professionals to solve complex financial, management and technology challenges. Since 1999, the company has been helping executives and management teams reduce their business and operational risks, bridge resource gaps and improve overall performance. Bridgepoint has a team of 80+ qualified professionals with offices in Austin, Dallas and Houston.

About TRS: Teacher Retirement System of Texas (TRS) delivers retirement and related benefits that have been authorized by the Texas Legislature, and manages a $112 billion trust fund established to finance member benefits. More than 1.3 million public education and higher education employees and retirees participate in the system.

Contact:

Gina Budd, Dir of Marketing, Bridgepoint Consulting, gbudd@bridgepointconsulting.com, Tel: 512-422-6571

Howard Goldman, Dir of Communications, Teacher Retirement Systems of Texas, howard.goldman@trs.state.tx.us, Tel: 512-542-6508

# # #

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“Bridgepoint Consulting has been helping clients select and implement ERP systems for years,” said Michael Johnson, Principal at Bridgepoint Consulting, “We see the NetSuite partnership as a way to support our existing clients while serving other companies interested in a cloud-based ERP solution.”

Since 1999, Bridgepoint Consulting has delivered services to companies in the software, life science and medical, semiconductor, energy, manufacturing, distribution, retail, construction and services industries. Bridgepoint Consulting has observed an increase in demand for cloud-based business management software among their existing clients, as they seek the benefits of quickly deployed solutions without investments in IT infrastructure or additional internal support. Many of their clients include start-up and high-tech companies, and companies experiencing rapid growth.

“Cloud-based solutions are a natural fit for many organizations,” said Johnson, “They allow them to efficiently support growth without a large capital expenditure.”

“By extending its portfolio with the unique capabilities of the NetSuite Cloud, Bridgepoint Consulting can effectively address the ever-increasing market demand for cloud solutions,” said Craig West, Vice President of Channel Sales, NetSuite, Inc. “Having Bridgepoint Consulting join NetSuite’s partner program further extends NetSuite’s reach into new markets, enabling even more enterprises to achieve greater business results.”

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Did you know that 2013 is the Year of the Snake? Be prepared so you don’t get bitten!

Don’t spend Christmas Eve in your office! There’s only nine weeks left in the year. Now’s the time to address the extra requirements associated with year end:

1. Clean up and reconcile accounting data from 2012
2. Prepare and Finalize 2013 budget
3. Prepare Form 1099s and W-2s
4. Plan for staff PTO during holidays
5. Complete IT system check
6. Update accounting software package to current version
7. Prepare for auditors and Tax CPAs
8. Address employee equity awards, etc.
9. Address HR issues and staffing for 2013
10. Revisit chart of accounts beginning Jan 2013
11. Complete year-end collections
12. Call Bridgepoint Consulting!

Bridgepoint Consulting’s team of 80+ professionals can help you be ready for 2013. We can assist with projects that are small, large, or somewhere in between. With our services, you dictate the amount of support you need and our team delivers.

If  you’re already feeling the year-end crunch, give us a call today and let us see how we can help 2013 be a year of good luck and prosperity. Call Monica L. Gill at 512.437.7910 or mgill@bridgepointconsulting.com.

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1)      The threat is real – almost every company has experienced some attempt to attack their networks.  Those threats are increasingly coming from Eastern Europe and China.  If you are not aware that such attacks have been attempted, you may not have the right detection systems in place.

2)      Access control continues to be an issue – the most dangerous threats to your organization may come from inside.  Access to internal systems, particularly by IT staff, needs to be regularly reviewed, and terminated employees need to have their access removed immediately.  We see exceptions to access control policies in most of our IT controls testing at Bridgepoint Consulting.

3)      Data security is more complex than ever – with the advent of smartphones, tablets and personal laptops on the corporate networks, data security now extends outside the walls of the organization.  If you allow personal devices to access corporate networks, you need to have a policy on securing those devices and a way to clean the corporate data if the device is lost or stolen.

4)      Cloud security varies based on approach – when deploying applications in the cloud, organizations must understand the security implications.  Using public cloud offerings (Amazon Web Services, Microsoft Azure, Rackspace OpenStack etc) does not relieve the organization from responsibility for security.  Applications deployed in the cloud must be tested and controlled similar to internally hosted applications.  For mission critical applications, a private cloud may provide better services levels and security than a public cloud.

5)      Don’t make it easy – hacker organizations such as Anonymous, use widely available intrusion techniques across many organizations looking for those with little or no data security controls in place.  Your organization needs to be more secure than others so you are not a victim.

6)      Have a response plan – one of the key components for limiting the impact of a data breach is to have a plan on responding to breaches.  A data breach may have operational, legal and public relationship impacts.  The quicker your organization responds appropriately to a breach, the less damage the breach will cause.

Technology is continually evolving.  Data security approaches must evolve with technology.  While no organization can be completely secure from data breach, your organization should not be behind the curve.  If you have a solid plan to prevent, detect and respond to data security threats, your organization will be less vulnerable.

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here

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Stay focused on good customers

Leverage your balance sheet

Maximize stakeholder value

Get current with technology

Be a cash hoarder

Stay focused on good customers. It’s easier to keep your current customers than find new ones, so make frequent touch points and closely monitor retention rates. Discuss future volumes and forecasts, and offer them incentives if possible. If you have slow paying and/or unprofitable customers that are high maintenance and add complexity to your business, seriously consider your cost to keep them as a customer.

Leverage your balance sheet. Little things can add up. Measure DPO (days payable outstanding) on your payables and DSO (days sales outstanding) on your receivables. You may realize there are opportunities to increase cash flow just by tweaking your payment or collection habits. Don’t pay vendors early unless rewarded, and get creative when negotiating longer payment terms. If you have inventory, pay special attention to DSI (days sales in inventory). Many companies have untold fortunes and cash flow tied up on inventory shelves. If the inventory is not moving, move it, regardless of the sales price.

Maximize stakeholder value.  Maximize all relationships for growth potential. Stay connected and nurture relationships with bankers, attorneys, accountants, insurance agents and consultants. Communicate regularly, provide timely reporting, ask for ideas. Keep key employees happy, and maintain open lines of communication with key vendors.

Get current with technology. Integrate your systems – measure inefficiency. Revenue growth should not equal people growth. Don’t be afraid to spend money – ROI is faster than you think.

Be a cash hoarder. Measure your headcount efficiency often. Forecast weekly cash flow. Negotiate discounts or co-marketing opportunities with vendors. Eliminate low ROI initiatives. Re-evaluate your lease vs. purchase. Be diligent on collections.

So what’s the net of this? The devil is the details. Often times it’s the little things that can be holding you back or costing you more than you think. Take a close look at the basics. You’ll be pleasantly surprised at the seemingly small adjustments that can have a significant impact on financial performance.

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More about the speaker: Kirk Watson is State Senator for District 14.  He is a lawyer and former Austin Mayor.  In addition, he is former chair of both the Texas Advisory Board for Environmental Defense and the Greater Austin Chamber of Commerce. Senator Watson has been recognized repeatedly for his legislative work.  In 2011, Texas Monthly magazine recognized him as honorable mention in its coverage of the state’s best legislators.  In 2009, he was on the magazine’s “10 Best” list, and was named its legislative “Rookie of the Year” in 2007.

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1. Keep Your Eye on the Ball – In tennis, if you don’t watch the ball, you miss lots of shots. Same in business. If you don’t pay attention to your core business, your business will fail to deliver and quality will suffer. Keeping your ‘eye on the ball’ is more difficult than it sounds. In tennis, the ball is on the racquet’s strings for about five milliseconds.  (Our eyes aren’t quick enough to see the impact). In business, it’s easy to spend too much time on an acquisition or new line of business, and forget about your customers and the attributes that helped you build your core business.
2. Every Shot Matters – In tennis, it’s amazing how often players give up on the point.  Three things matter when keeping the point going: stay in position, anticipate your opponent’s next shot, and don’t give up on the shot. In tennis, a player’s movement when not hitting a ball is just as important as the movement to a ball hit by an opponent. In business, everything matters (this is DLA Piper’s business slogan, and it’s definitely true). Don’t ignore certain aspects of your business because you don’t enjoy it. For example, don’t ignore your financials just because you don’t like reviewing financial statements. Or, if you’ve developed great products, you still need a marketing plan to reach customers. Don’t expect customers to find you without it.
3. Endurance – To play tennis, players need a certain amount of cardio training to keep the pace for an entire match. John Isner, an American tennis player, has a knack for playing long matches. He’s the guy who, in 2010, played an 11 hour, 5 minute match at Wimbledon. We don’t need that level of fitness, but to play an entire match, it requires stamina. In business, you need consistency and the ability to perform time and time again. Anyone can hit a great shot occasionally, but you must build solid processes and systems (and endurance) to ensure repeat performance.
4. Be Opportunistic – In tennis, if your opponent hits a weak shot and you have a chance to hit a winner, do it. Don’t back off—you need to put the ball away and win the point. In business, when you see a market opportunity because of a weak competitor or a new market, jump on it. He who hesitates is lost.
5. Be Strategic – In tennis, put yourself in the best position possible to win each point, game and set. Identify types of shots where you can best capitalize on your competition. If your opponent doesn’t cover the court very well, hit the ball to open positions on the court and make your opponent move. If they hit weak shots and you can take the net, do so and find a shot to put away. Same in business: plan, plan, plan. Without something to shoot for, you’ll never be able to measure your progress, but, adjust those plans accordingly as new opportunities present themselves.
6. Be Realistic – In tennis, don’t try to serve a winner if you’re opponent has hit a strong return. You should keep the ball in play and hit as strong a shot as possible. Same in business. Understand your business’ competitive strengths and weaknesses, but if your cost structure or products don’t allow you to compete in a certain market, work at creating advantages before trying to capitalize on the opportunity.
7. Hone Your Skills – In tennis and in business, we need to continually ‘sharpen our saw’ as Stephen Covey says. We need to work on our strengths and improve our weaknesses. This takes time and energy and we shouldn’t expect for it to happen without hard work and determination.
8. Exhibit Good Sportsmanship – Nobody likes an arrogant winner or a sore loser.  This, too, applies to both tennis and business. Don’t try and get away with fudging the rules to your advantage, because it may end up costing you in the long run. An example in tennis: the foot fault (stepping over the baseline before the serve). This may give you an advantage if your opponent doesn’t call the foot fault, but if an opponent calls you out on this, it can impact your ability to make changes when needed. The same philosophy applies in business. If you cut corners trying to get around rules and policies, it may prevent you from accomplishing other achievements later.
9. Champions Win the Important Points – Prepare yourself for the crowning moments on the tennis court or in the boardroom. Surround yourself with a strong team and be humble as you enjoy these moments. While it stinks to lose a game or deal, don’t sweat it. Respond to both wins and losses with gratitude and thoughtfulness.  This will increase your likelihood of future achievement and success when it really counts.
10. Have Fun! – How often do we forget about the pleasure of playing the game—whether it’s tennis or business? Enjoy the great moments. Endure and learn from the challenging times. But most importantly, enjoy yourself each day and in each match.

Bill Patterson is a Principal with Bridgepoint Consulting LLC, an Austin-based professional services firm that provides highly-qualified professionals to help organizations solve an extensive scope of financial, management and IT challenges. He plays tennis at Westwood Country Club. He may be contacted at BPatterson@BridgepointConsulting.com.

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 Creating Sales Comp Plans that Motivate without Killing Margins

“Two things: Sales people are coin operated,” said a CFO at the recent Bridgepoint Leader’s Edge event for finance executives, “And changes to a comp plan can have bad unexpected effects if not thoughtfully planned.”

This was part of the discussion when Bridgepoint Consulting recently hosted an interactive roundtable with 25 CFOs and finance leaders at the offices of Multimedia Games about the topic of sales compensation plans. The discussion was led by industry veterans Adam Chibib, CFO of Multimedia Games and Trey Chambers, CFO of Compass Learning, and was moderated by Bob Smith of Bridgepoint Consulting.

“While not always true, I’ve found that sales people that are more motivated by a higher variable opportunity are typically more confident and hungry, and therefore more successful at selling,” said another CFO in the group. “However, most want both – high base and high variable compensation.”

What was the common base / variable balance among the group for their sales teams? The total compensation “balance” varied between a 50-50 split of base and commission pay out, to a 20-80 split that offered higher variable opportunity.

A variety of topics, considerations and opinions were shared. The list below highlights a few of the discussion topics.

• Fixed and variable comp ratios – Among the group of executives, there was a mix of ratios of base and variable comp. All agreed that both approaches have merit depending on the product, pricing, sales cycle and recurring revenue options. In the technology company attendees, it was agreed that comp plans for hardware products are much easier to manage than software products.
• Create plans thoughtfully and monitor closely to avoid unintended consequences – for example, accelerators, a commission percentage in excess of quotas, can backfire. Be careful or you will be spending more time negotiating payouts with your sales person than with the customer in which the sale was made. Also, you don’t want to get into a situation where the sales team hits their goals and earns commissions, but the company misses their earnings targets and yet owes significant amounts to the sales team.
• Company draws – Several of the execs said they allow financial draws for sales people, especially new team members. However, they agreed that you can’t count on recovering the draw if the employee quits before it is paid back. One
• Incentives drive profitability – Contests with cash incentives, as well as the esteemed President’s Club (P-Club) recognition, are very popular motivators that incent the sales team to go the extra mile, especially during slow quarters or months. Several CFO commented that “…the best sales people are very competitive and ego-driven.”
• Splitting commission – if multiple personnel are involved in a given sale, it can be very challenging to split the commission after the fact. This needs to be very thoughtfully spelled-out beforehand to avoid conflicts and headaches.

“I have no problem at all paying out high commissions to high performers,” said an exec among the group, “If they are making more money than me, that’s a good thing.”

In summary, the simpler the sales comp plan can be outlined, the easier to manage and execute. However, that’s easier said than done, especially if you add spiffs and sales contests throughout the year. Also, the clear communication of measurable objectives is paramount when implementing any changes to sales compensation plans to ensure maximum performance by the sales team and maximum sales and revenues for the company.

The post Event Recap: The Art of the Sales Comp Plan appeared first on Bridgepoint Consulting.

Bridgepoint, with numerous projects already underway in Houston, will offer their full suite of professional services including Governance, Risk Management and Compliance, as well as Financial Operations and IT consulting to companies of all stages and sizes, with heavy focus on energy and manufacturing.

“It was an easy decision to move into Houston based on the requests we were receiving from numerous clients,” said Bob Smith, Principal for Bridgepoint Consulting. “As our footprint was expanding, it just made sense. In addition, we believe John’s vast experience in the Houston area as well as his expertise in governance, risk management and compliance provides us with the necessary foundation for growth.”

Sorrells has more than 30 years of experience in finance, operations and administration in risk management and audit across multiple industries. Most recently, he was a Managing Director of Risk & Compliance Solutions at Protiviti, a global business consulting and internal audit firm.

“The Bridgepoint team has incredibly talented professionals with great success in the Central Texas market.  I look forward to further extending this success by creating a dynamic Houston team and practice while adding critical value to client engagements,” said Sorrells.

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Craig Fleming, CFO of Jones Energy Ltd was the large company winner, and Van Goodrich, CFO of Accruent LLC was the Private company winner. Click to read full list of award recipients.

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So how do you know if your IT organization is performing well?  Well, here are five tell-tell signs you might need to assess your IT organization:

• Systems are down – if basic services like email, telecommunication and core business systems are not operating you might need an IT assessment
• Costs are up and service is down – if your IT spend as a percentage of overall spend continues to increase, and the service levels to users are decreasing, you might need an IT assessment
• Your CEO knows how to reboot the router – if you employees are performing routine IT tasks because IT is too overworked, you might need an IT assessment
• IT is a fire drill – if your basic IT operation is a heroic act, you might need an IT assessment
• IT is evil – if IT is a necessary evil rather than a strategic part of your business strategy, you might need an IT assessment

Often times, IT professionals get focused on day-to-day activities and fail to see the bigger picture.  An IT assessment can help your organization move IT from being reactive to proactive, and turn IT into a competitive advantage rather than a detriment.  Bridgepoint Consulting has successfully helped many of our clients navigate this process, so if you need help, give us a call.

About the author: Michael Johnson is a principal at Bridgepoint Consulting that leads their IT Practice.

The post Five Signs You Might Need an IT Assessment appeared first on Bridgepoint Consulting.

Award Recipients for the Ernst & Young Entrepreneur Of The Year Award on June 7 included: Jonny Jones, Jones Energy Ltd; Brian Sharples, HomeAway, Inc.;  and Allen Gilmer, Drilling Info, Inc.  Other client finalists included: Glenn Garland and Jim Stimmel, CLEAResult; John Arrow, Mutual Mobile; Kevin Cunningham and Mark McClain, SailPoint; and Dan Graham, BuildASign.com.

For the ACG awards, Jonny Jones, Jones Energy and John Arrow, Mutual Mobile were both award recpients while SailPoint and CLEAResult were recognized as finalists for this award.

“Bridgepoint is proud to have affiliations with these outstanding companies and their leadership teams,” said Bob Smith, Principal, Bridgepoint Consulting. “They have successfully demonstrated their excellence while contributing to a thriving Austin economy.”

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Bridgepoint Consulting hosted 25 Austin-area CFOs and finance leaders on May 31 at HomeAway’s corporate headquarters for an interactive roundtable meeting. Bob Smith, Principal at Bridgepoint Consulting, moderated a discussion led by Lynn Atchison, CFO of HomeAway, and George McHenry, CFO of Hanger Orthopedics, in which they shared experiences about how they sort, manage and use analytics and data to make better management decisions.

In addition to general challenges with overwhelming amounts of data derived from different sources, the leaders discussed the various financial, accounting and CRM systems they use, as well as related integration issues.  The entire group of leaders shared lessons learned and how they address their individual challenges.

According to Atchison, with the multiple acquisitions that HomeAway has completed, they are always working to catching up. “It’s a constant battle between what needs to be done and controlling costs,” she said, “One of our biggest challenges is converting all the acquired companies from their legacy systems to a common system.”

For Hanger Orthopedics, McHenry says compliance with medical billing rules and regulations is a big challenge, especially since they have over 700 locations with each site doing its own billing and collections. Luckily, they are in the process of developing a new practice management system to better manage the billing and collection process that will allow centralized monitoring of all locations.

Both Atchison and McHenry agreed that investing early in automating data gathering and analyzing is critical. But with new systems come steep costs, so management buy-in of the investment is imperative.

“Getting my CIO engaged in the new system development had been a huge leverage point in moving the project forward with management and the Board of Directors,” said McHenry of his new system. “We currently reconcile accounts receivable and cash each day. We have a team of 16 who deal exclusively with exceptions. The new system will eliminate much of this manual effort.”

For HomeAway, going paperless is a crucial aspect of distributing information in the timeliest manner. Atchison believes that preparing information on shorter intervals—weekly vs. monthly—allows management to make quicker operational improvements to prevent larger issues.

Another tip from Atchison: limit report customization and say “no” to the one-off requests for specific data that adds time to the report creation. “Limiting customization of reports allows information to be generated more quickly, allowing management to make appropriate changes in a timelier manner,” said Atchison, “Distributing key data on a consistent basis is better than more detailed information at longer intervals.”

What were the key take-aways of the meeting? Invest in the necessary systems as early as possible – and fight for the investment needed. Also, if you are growing by acquisition, move to common systems as rapidly as possible. Waiting to make the conversions will cause more problems in the long run.

The post Using Analytics to Thrive in the New Reality appeared first on Bridgepoint Consulting.

We have highlighted a few of the key aspects in the JOBS Act and commented on their impact on public companies and their requirements:

What are key aspects of the JOBS Act?

• Establishes a new category of public company referred to as “Emerging Growth Company” (EGC). This new classification is available to qualifying issuers for a five-year period after IPO (IPO on-ramp period).
• Exempts the EGC from certain public company requirements during the on-ramp period. For example:
• Provides more than two years of audited financial statements and selected financial data in its IPO registration statement.
• Adopts new or revised accounting standards effective for public companies (private company effective dates apply)
• Gives private companies greater access to capital:
• Increases the number of record holders that trigger public registration obligation to 2,000 investors (accredited investors, except for bank issuers) from 500 investors.
• Allows small investor “crowd-funding” limited to $1 million within a 12-month period; “Crowd-funding” refers to raising equity capital from multiple small investors (e.g., equity sales via internet, subject to caps based on investor net annual income/net worth) without adding to the record holder count.

What qualifies an issuer for “Emerging Growth Company” status?

• Revenue test: less than $1 billion in annual gross revenues during the most recently completed fiscal year.
• Cease to qualify during on-ramp period, when:
• annual revenues exceed $1 billion, and/or
• market capitalization exceeds $700 million thus deemed to be ‘large accelerated filer’, and/or
• issued more than $1 billion in non-convertible debt during the previous three year period.
• Effective date: first sale of common equity securities, pursuant to an effective registration statement, must occur after December 8, 2011 (cannot qualify if on or before this date).
• Determination date: issuer must qualify as an EGC at the time of submitting a confidential draft registration statement and each subsequent amendment submitted confidentially.
• Issuer must also determine whether it qualifies at the time it engages in permissible test the waters communications.
• Disclosure: issuer should disclose EGC status on the cover page of its prospectus included in both its confidentially  submitted draft registration statement and in its publicly filed registration statement.

What is the impact on SOX requirements?

• SOX 404(a) – management’s assessment requirement for internal controls over financial reporting remains applicable.
• SOX 302/906 – CEO and CFO quarterly certifications remain applicable.
• SOX 404(b) – EGC is exempt from auditor attestation requirement for internal controls over financial reporting (JOBS Act, Title I, Section 103).
• SEC Division of Corporate Finance Staff has indicated EGCs should consider discussing their status and related risks, including exemption from SOX 404(b) auditor attestation requirement for internal controls over financial reporting, in confidentially submitted draft registration statements and in publicly filed registration statements.

What are some of the concerns for investor protection?

• Not requiring SOX 404(b) compliance (auditor attestation) for EGC issuers will decrease the rigor around internal controls over financial reporting and disclosures.
• Enabling submission of confidential drafts of IPO documents to the SEC decreases investor transparency.
• Exemption from new accounting rules will lead to disparate financial reporting.
• “Crowd-funding” investments will create an opportunity for fraudsters to take advantage of this leniency in raising funds.

What’s next?

• Private companies need to consider how the JOBS Act affects their plans for accessing private or public market capital, and whether to opt in or out for ECG status, if qualifications are met.
• Reference should be made to the JOBS Act H.R. 3606 available at http://www.govtrack.us/congress/bills/112/hr3606.
• Reference should be made to the SEC Division of Corporate Finance Staff’s recent and forthcoming additional guidance available at http://www.sec.gov/divisions/corpfin.shtml.

 About the author:

David Roe is the Director of Bridgepoint Consulting’s Governance, Risk and Compliance practice that provides companies with internal audit and SOX services. If you have questions or would like more information, please contact him at 512-437-7903 or DRoe@BridgepointConsulting.com.

The post JOBS Act and SOX: Balancing economic growth and investor protection appeared first on Bridgepoint Consulting.

We wish each finalist the best of luck and are proud to be affiliated with such innovative leaders!

Dan Graham, BuildASign.com

Glenn Garland and Jim Stimmel, CLEAResult

Allen Gilmer, Drilling Info, Inc.

Brian Sharples, HomeAway, Inc.

Jonny Jones, Jones Energy Ltd

John Arrow, Mutual Mobile

Kevin Cunningham and Mark McClain, Sail Point

The post Bridgepoint Consulting Clients Named Finalists of Ernst & Young Entrepreneur Of The Year® Awards appeared first on Bridgepoint Consulting.

The discussion covered recent topics and trends in fraud prevention and detection. Dave Holody, Freescale Director of  Internal Audit and his security and fraud team provided insight and examples of their challenges and approach which contributed to a interactive discussion among the group.

Highlights of these discussions:

• Fraud is an issue that organizations always have to deal with. Estimates by the Association of Certified Fraud Examiners (ACFE) are that organizations experience fraud of 5-7% of top line revenue on average. If you think your organization doesn’t have fraud issues, you’re kidding yourself.
• Potential types of fraud include, but are not limited to,:
  • Cybercrime – IT system access
  • Intellectual property
  • Cash misappropriation
  • Kickbacks and bribes
  • Financial reporting misstatement

Best Practices:

• A formal Fraud Risk Assessment process with frequent updates is critical to understanding the fraud risks and audit coverage needed; the ACFE fraud risk assessment framework was used by several audit professionals
• Develop a formal continuous monitoring program
  • IT systems – continuous monitoring of security and access  control effectiveness
  • Data Analytics – develop continuous monitoring scripts for identifying unusual and suspicious types of transactions

• Increase automation of key processes and controls to mitigate manual adjustments/intervention
• Watch for and immediately investigate large/unusual downloads of data
• Difficult employee terminations – be aware of any malicious or vindictive behavior
• Deterrents internal audit functions have deployed –
  • New hire and annual acknowledgement by existing employees of having read Code of Conduct and responsibilities for reporting unethical/potential fraudulent behavior
  • Issue routine communications to increase  employee awareness of your Fraud programs, including summaries of fraud findings – situation and outcome (e.g., newsletter)
  • Provide whistleblower/ethics hotline ready access to employees, vendors and customers for reporting of known or potential fraudulent behavior
  • Routinely “walking the halls” and asking questions about the business creates awareness even if it’s not specific fraud inquiry
• Implement training program for the Audit Team on Fraud prevention/detection skills
• Establish and execute a formal documented process for timely coordination with internal and/or external  investigators and legal professionals, leading to prosecution for actual fraud occurrences

The post Roundtable Recap: Fraud Detection and Prevention appeared first on Bridgepoint Consulting.

The presentation and discussion included:

• overview and history of SOX;
• new requirements;
• external auditor expectations;
• IT security issues and challenges in a “cloud computing” environment;
• common challenges and benefits for Emerging Growth Companies (ECGs) as defined by recent passed legislation;
• leading practices and methodologies.

Resounding themes discussed by the group for successful SOX implementation included:

• Organizational buy-in to implement and sustain an effective SOX program;
• Start SOX readiness early – it always takes longer than anticipated;
• Apply top-down, risk-based-approach focusing first on pervasive entity-level and IT internal controls over financial reporting and disclosures;
• Identify key internal control design gaps and deficiencies timely for remediation; and
• Involve your external auditor throughout the process.

For more information, please contact David Roe, Bridgepoint Consulting Director of Governance, Risk & Compliance at 512-437-7903 or Droe@bridgepointconsulting.com.

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Throughout my career, I’ve seen all kinds of corporate hiring approaches—many simple and straightforward—others strategic and methodical. Panel interviews. Formal PPT presentations by candidates to management teams.  Even three hour tests that many an MBA can’t pass.

The following is a compilation of some key reminders, insights and lessons learned to help ensure a successful, pain-free hiring experience.

Planning the Hire

A hiring process that is well scoped and organized on the front end can pay huge dividends in the long run.  Many times employers underestimate the impact of planning, organization, internal communication, and setting a realistic timeline for the interview process.  It’s critical that the department has all their “ducks in a row” before starting the process, or it could result in wasted
time, effort, and resources with an uncertain end result.

Ready or not? If a company is not ready to hire full-time or commit to the position, I often recommend considering an interim consultant for the role. This can remedy short-term needs while also giving the organization time to fully vet the scope of the position. As we see in many cases, the consultant may become so ingrained within the organization that they are asked to join on a full-time basis.  Additionally, an experienced consultant may even provide valuable insight about the job in which the
decision makers weren’t previously aware.

Newly-created positions. If the position is a new one, make sure that all decision-makers agree on how the position will fit within the company’s priorities. Focus in on the job description and analyze how each credential, skill or personal quality fits into your company’s operating structure. If the
stakeholders are in agreement and there is an accurate perception of what is needed for the job, a company is more likely to identify professionals who fit the bill. If you are still working out the job description, budgeting for the position, organizational structure, or other politics, you are better off waiting to start the hiring process until that is complete.

Existing positions. If the opening is for an existing position that has proven to be essential over time, the hiring process can go relatively smoothly. The budget is set. The job description is in place. And the office and computer are ready to go. There may still be a few “bugs” in the system though, that should be overcome before posting the job or calling the recruiter. For instance, if the previous person in the role was terminated, had performance issues, or expressed frustration prior to leaving the company, management should take a long look at the challenges the position faces on a day-to-day basis to ensure that expectations for the position are realistic and that the support structure is adequate. A recent example I encountered was a client that had three different Senior Accountants leave the same position within a two-year period.  In that case, I recommended the hiring manager take a step back and re-evaluate the internal and external challenges for the position.  While this set the search timeline back about a month, my client was able to address some major challenges with the position and actually modified the job description and requirements.

Two Critical Virtues:  Patience and Timing

In my experience as a Finance/Accounting Executive Recruiter in the Austin metroplex, I’ve seen that companies are all across the board when it comes to the timeline for filling a position. A candidate might be hired on the spot, or it could take six months to fill a position.  Most companies aim to fill an advertised position within 30 to 90 days of a job’s posting.  Generally, a Staff/Senior level position
should be filled (offer accepted by candidate) between two to five weeks of the search officially beginning.  Mid-level roles (Finance Manager, Assistant Controller, etc.) on average take four to eight weeks to close.   Corporate Controller, Director, and VP positions take the longest, for good reason, and
this lag is created not only by the challenge of identifying the right person to hire, but also a more thorough interview process.

Can time be the enemy? The number one frustration I hear expressed from both candidates and clients is that it’s taking too long to pull the trigger.  No matter what level of position, it’s in the candidate’s and company’s best interest to make sure they are, in fact, hiring the right person for the job. You don’t
want rush to hire someone and have them wash out in six months, which I have seen happen on occasion when a company fails to take the proper measures.  On the flip side, when does process and due diligence overkill kick in and time become the enemy in a search?

Small company situations. Overall, small businesses are generally lighter on their feet when it comes to hiring, even with the challenges imposed by limited HR & Internal Recruiting resources.  At Bridgepoint, many of our clients are indeed in the start-up or small company demographic.  The value we are able to bring to these types of companies extends far past simply locating the person for the job.  In many cases, we are truly able to create and manage the hiring process, and this provides the opportunity for us to instill and train best practices within the client organization.

Large company challenges. While large companies might be able to afford tools that make their talent identification process easier – such as specialized recruiting software or advanced resume databases, a full-scale HR team or external recruiting fees built into the budget – they often have a lot more red tape to cut through before they can formally make a job offer.  This might include strict rules regarding
internal advertising for the position, more defined salary ranges, or a complicated bureaucracy that needs to sign off on the final candidate. They’re also more apt to conduct personality and skills assessments, extensive background checks, and drug tests, which may add a week or two to the process.

How long is too long? In my experience, when a search goes over 90 days, it’s generally a sourcing
issue.  I see this scenario when the position is very specific and technical in nature, or when a company is out to find a “rock star”, the best of the best in the market, so to speak.  I think it’s admirable for an organization to set it’s standards high; however, when doing so, it should also recognize that an enhanced talent identification approach will be required.  Some of the searches Bridgepoint Recruiting
has engaged in during the last year or so have been openings that the client company had been trying to fill for 3-4 months before turning it over to us.  The sourcing challenge the company faced was
due to the fact that the top potential candidates for the job were not actively looking, applying for jobs, or currently networking.  The top candidates were busy working at their current jobs, and had to be proactively vetted by a recruiter who knew where they were “hiding”.

Managing the patience of candidates. While not always the case, in general, companies don’t do a good job of clueing candidates into how long they plan on taking with their search, and also about their status in the process.  Advice I give to companies doing the slow hiring: Professionals understand challenges; they may not understand procrastination or avoidance.  Try to keep the communication as direct and upfront as possible, without giving away all of the cards you need to hold tight in any hiring process.

Candidate advice.  Here is the advice I give to candidates involved in a lengthy interview process with
a company hesitating to move forward:  Make the assumption that they are not sold on you. That doesn’t mean they won’t eventually come around, but you need to go out of your way to show them that you are the top candidate, rather than playing the wait-and-see game.  Assume that there is one person at the company who wants to keep looking, probably someone in the hierarchy above the hiring manager. So go to the hiring manager and ask what you need to do to win over the indecisive executive. It may include proactively writing a plan for transitioning into the job, or asking an influential professional reference to contact the executive.  In cases where indecisiveness is creating the time lag, I try to encourage both the hiring managers and the candidates to meet again, even for 30 minutes over coffee.

Wrapping It Up—Time to Hire

Here are a few pointers that will position your company “a step above the rest” by promoting an efficient offer process, communication with top candidates, and on-boarding the chosen candidate once an offer is accepted.

1. 1. A critical principle of hiring is to keep the time between the final interview and offer short. Keep the momentum going.  History has shown time-and-again that if you extend an offer to the chosen candidate in a timely manner, you are likely to get a positive response. If the lapse between interview and offer is too long, candidates will develop anxiety and puzzling interpretations of the process.  Put your organization at the head of the pack by making your process efficient. Reap the rewards of careful planning, which will give you every advantage in the offer-and-acceptance process. A hiring manager should iron out the details of the upcoming offer’s salary range, bonus target, benefits, etc. prior to conducting interviews. This way, you can minimize delays due to organizational bureacracy that typically affect the production of an offer letter.
2. 2. Stay in touch with runner-up candidates that you identify as competent, who also possess the “soft skills” to fit your company culture. Send them brief updates from time-to-time (networking for the purpose of networking never hurts, and can pay off for you personally in the future, too). Notify them of significant company successes.  Keep the channels of communication open and their interest in company alive.  You never know when you may need to contact them again–for referrals or to gauge their interest in a new opportunity. Good relationships mean good business.
3. 3. Once a candidate accepts an offer, as a hiring manager, you should make it a point to create a direct line of communication.  Be open to questions, and try to explain any internal politics before they arrive.  Inform the team of the hire.  Prep their staff, direct reports and supervisors so that the team will receive them openly and with positive expectations. Be upfront about your expectations and the candidate’s readiness to deliver measurable results.  Also, do not forget the little details.  Make sure that all office equipment and furnishings are in good working order.  Complete as much paperwork as possible before the new hire comes on board.  Introduce him or her to the team via email or in-person by organizing a lunch — before the start date, if possible.

Communication: The Secret Weapon

If I had to pick one word to summarize the most important component of the hiring process, it would be communication. Communication with key stakeholders to create the best job description. Communication with department employees so they feel like they are part of the process. Communication across company channels to identify obstacles. Communication with candidates throughout the hiring process. Excelling in the communication aspect in all stages of the hiring process will give your company a competitive advantage when seeking out the top talent in the marketplace.

About the author: Spencer Epley is the Executive Recruiting Manager at Bridgepoint Consulting, an Austin-based finance, management and IT professional services firm. He has more than six years of
experience placing finance and accounting professionals in the greater Austin area, and is a former CPA with a Big Four accounting firm. He can be reached at sepley@bridgepointconsulting.com.

The post Hiring Lessons from an Executive Recruiter appeared first on Bridgepoint Consulting.

Bridgepoint Consulting friend, Jim French, Office Managing Partner of PwC in Austin, spoke to an audience of 30+ local CFO and financial execs at Bridgepoint’s CFO roundtable on March 8, 2012 about pending revenue recognition standards that are scheduled to be rolled out by 2015. He did a great job informing the group about the proposed new model, including what the significant changes are, and how to prepare for them.

A little background:
The core principle of revenue recognition is to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. Simply put, however, current revenue recognition rules are very cumbersome, inconsistent and hard to manage. Therefore, the FASB and IASB created a task force in 2002 to address the challenges of the current standards. Their goal was to create one universal standard for revenue recognition, applied to all industries and capital markets. It was agreed upon that the new revenue recognition standards be principles-based versus the current rules-based model. The new standards are also intended to include: enhanced disclosures, a robust framework, clear principles and comparability measures across industries.

Revenue recognition changes – significant or not? There is a broad scope of changes for different steps in the new process. In some instances, there will be little modification to existing practices. However, in other cases, there will be major changes that finance execs may consider good or bad. The following outlines the decision process that will need to be followed. Each step includes a high level description, including the significance of change compared to current practices.

Step 1: Identify the contract with the customer.

It is a single, contract-based asset/liability model. The contract may be written, verbal or implied based
upon customary business practices.

Level of change: Elimination of written contract will have interesting ramifications, but otherwise not
major changes.

Step 2: Identify the separate performance obligations in the contract.

More items may be identified and separated as promised goods or services (for example: loyalty points, free product or discount on future sales, service-type warranties, in-transit risk of loss coverage, when and if available software upgrades, etc.).

Level of change: The results may vary for this. This may allow for earlier recognition of revenue that
previous guidance allowed.

Step 3: Determine the transaction price.

Judgment will be required to assess the components of the transaction price including estimates of variable consideration and whether a significant finance component exists when recording initial revenue.

Level of change: Expected contingent consideration anticipated to be paid included in initial recording
of revenue rather than subsequently when ultimately realized.  Collectability will no longer be a hurdle of
recognition and will impact gross margin.

Step 4: Allocate the transaction price.

Price for each component of transaction will be determined based upon estimated selling price of each
component. The hurdle for estimating sales price for various components is no longer dependent upon VSOE. Application of the residual approach will require judgment and is limited to cases when the standalone selling price of goods or services is highly variable or uncertain.

Level of change: Determining sales process for various components will be easier under new rules.

Step 5: Recognize revenue when a performance obligation is satisfied.

Revenue recognized when the customer obtains control over the promised item. In certain cases, revenue is still recognized over a period of time. It is expected that some entities will recognize revenue earlier under the proposed guidance because they will be able to recognize amounts before all contingencies are resolved if the entity has predictive experience.

Level of change: The current model is now based on control of the “asset” being transferred. Introduction of “reasonably assured” constraint.

During French’s presentation, the following were also identified as items creating significant levels of change in to the rules:  Onerous losses; Licenses – recognition based on transfer of control; and Disclosures, which will be much more extensive.

When will new rules take affect? It is anticipated that new rules will be applied beginning January 1, 2015 with retroactive application to as early as 2013!

So what should you be doing now? According to French, awareness and preparedness are essential for implementing new revenue recognition standards. Given the timeline, companies should be thoughtful and measured in their approach as they consider this complex challenge. Below are his suggestions on what you should be doing now to prepare for a successful transition:

• Perform a high-level assessment to determine significant impacts on your company
• Educate key stakeholders, including investor relations, the board and audit committee
• Consider impact of the new rules upon major company initiatives including processes, systems, and compensation plans
• Consider impact on strategic business initiatives such as changes in bundling, pricing, go-to-market strategy, new product and service offerings

The post Revenue Recognition: The Evolving Landscape appeared first on Bridgepoint Consulting.

 A few years ago, “cloud” or Software As A Service (SaaS) offerings, were limited to a few  solutions such as Salesforce, ADP and Quickbooks online. These solutions were effective for smaller businesses or for a point solution, but still left a void for larger enterprises.

 Based on our experience the last two years, Bridgepoint has seen increased client demand for true enterprise solutions that are cloud hosted. It seems that over time, our clients’ “willingness to consider” has turned into “an insistence on pursuing” a cloud solution. In fact, in several recent system selection engagements, our clients have opted to limit their choices exclusively to cloud solutions over the alternatives.

 So why is the cloud so popular and what are the benefits? Our clients consistently have sited the following reasons for preferring a cloud solution:

• Ease of deployment – no hardware, no network. All you need is an internet connection and a browser.
• No maintenance – the system is maintained and supported by the software vendor
• IT staff focus – many organizations use their IT resources to develop technology that they sell. These revenue producers must focus on external projects.

Sounds great, but what’s the catch? Well, yes, there are also some concerns to consider with cloud solutions:

• Security – how can I be sure that my sensitive sales, customer and financial data is protected?
• Functionality – cloud solutions tend to be less functional than their on-premises competitors
• Integration – mature organizations may have many internal solutions that need to talk to the enterprise system

Is a cloud enterprise system the right solution for you?

The only way to know for sure is by conducting a careful and broad assessment of the current market alternatives and evaluating them against your specific needs.

The post Dreaming of a Cloud Computing Solution? appeared first on Bridgepoint Consulting.

Be a hands-on leader. The CEO has significant challenges to confront in this environment, with both employees and external third-parties looking for assurances, guidance and direction. The CEO must lead by example.  It is important to demonstrate intellectual honesty and facilitate an understanding of the company’s current reality, and not allow management to swim in the river of denial.  Optimism can be valuable, but a misguided focus about better times or an unrealistic future recovery may paralyze the organization and impede real focus on solutions.  Leaders must think strategically about what the company needs to accomplish now and convey a clear vision. They must promote the development of ideas and creativity among the management team. Status quo is not an option. Company leadership must motivate people towards action with active, hands-on leadership, and cannot do so sitting behind closed doors or by merely sending emails.

Communicate, then communicate more. A sense of urgency to address the company’s challenges must be conveyed both to the leadership team and downstream in the organization.  It is not business as usual.  Ongoing programs and initiatives must be reevaluated, while new initiatives and an execution plan must be developed.  Decisions regarding realignment may have to be made with limited or imperfect information. Some mistakes may be made, but incremental successes with ongoing adjustments are better than inaction.

The CEO must lead the change and motivate everyone to step-up.  They must encourage the team to go beyond any fears and envision a stronger future.  An immediate, not tentative plan should be crafted; speed of implementation and execution matter.  There can be no sacred cows with respect to people, products, divisions, projects or processes; everything must be reevaluated for its impact on short-term liquidity, and it may require some measure of pain.  Managers that are not up to the task of critical thinking, reengineering or implementing change are often part of the problem, not the solution.  Difficult decisions may have to be made, or the business will be at risk.  Keeping all stakeholders up to date is critical, and promotes credibility.

Time for assessment.  Realigning the company’s strategy requires an assessment of the financial and operational condition of the business.  The first step in crafting a realignment plan involves an assessment of the sources and uses of cash, timing of each, and an analysis of real profitability.  Information reporting in this regard is essential.  If sufficient, detailed reporting is not being produced or available, then the CEO must ensure finance and IT personnel work together to generate the desired information quickly.  This is not a task force assignment to install new systems or design the most comprehensive reporting.  It is an urgent collaboration of key personnel to determine what can be produced to give management critical information necessary to make the required assessment. It is imperative this information be centralized and controlled by the finance department, which already understands reporting integrity and cost allocation issues.  Reports generated by department heads are often less reliable and may not contain critical elements of related revenue and expense.

The devil is in the details. It is also important that reporting information be detailed enough to enable management to evaluate profitability, cash requirements and trends of each product produced, each store managed, each operating plant, each service provided, each office location, each project constructed, each division, and so on.  Leadership must be able to take a fresh look at each of these and see what is profitable and what isn’t, what is consuming cash versus throwing off cash, and assess what positive or negative trends are likely to continue in the near term.

Working capital is critical too.
It is not sufficient to analyze only revenue and expense.  Working capital components and other elements of the balance sheet are equally important.

Inventory – The amount of inventory required to produce a product, as well as slow-moving or obsolete inventory, can materially impact the company’s liquidity. Inefficient inventory turnover can be due to deficient IT systems and reporting in tracking inventory, overbuying related to purchase discounts, excessive SKU’s, and inadequate gauging of promotion response, among other things.  Excessive inventory levels creates many costly issues and can lead to increased warehouse space, higher shrink, spoilage, markdowns and margin erosion.

Inventory needs to be reduced, or liquidated at a discount in the case of slow moving or obsolete products and converted to cash. Additionally, SKU’s should be reduced to what generates the
most revenue.  Just-in-time inventory tracking and ordering processes should be implemented, together with a strategic sourcing program, where practical.  EBITDA improvements will be realized through all of these measures, however, attaining these benefits may require additional expenditures in the form of IT and systems investment.  The return on such related costs will be realized through increased analytical capability, enhanced visibility of gross profit by SKU, improved order accuracy and reduction in space and payroll requirements.

Accounts Receivable –  Accounts receivable collection efforts may need to be improved in order to increase timeliness of collections and decrease days outstanding.  Be aware of who may be at risk themselves and be at the head of the line to get paid.  In some cases discounts may provide incentives to customers to pay sooner. Conversely, some customers may need to be culled, either because they are not good payers, or because they are not sufficiently profitable based on the resources they consume.  Again, there can be no sacred cows; everything must be evaluated with a fresh perspective.  Even if a company has been a long-term and loyal customer, if they are creating a drain on cash flow, terms must be adequately renegotiated.

Accounts Payable – Stretching out payables would seem to be an elementary step in maximizing cash flow, but it is surprising the number of companies that don’t change their payment policies, even as their own customers have slowed payment to the company.  Often a significant bump in cash flow can be achieved by increasing payable days outstanding across the board. The number of customers and vendors the company uses should also beevaluated.  Costs  of time, resources and supplies to order/pay/process an unnecessary number of vendors is often overlooked, and can dilute volume discount potential.  In some cases, the company must recognize where it has an effective partnership with certain suppliers and negotiate changes in terms or credit such that the company does not bear losses alone, benefiting short-term liquidity.

Review non-core assets.  Non-core assets must be assessed for both their current cash value and their borrowing capacity.  Planes, non-essential vehicles, extra parcels of land or buildings, certain leases and equipment may all have some amount of current cash value.  If the company owns its headquarters, store locations, warehouses or distribution centers and this real property is essential to the business, it should be evaluated for sale-leaseback transactions to bring cash into the business today.  In the case where core or non-core assets are not pledged to a lender and fully liened, they should also be evaluated as a source of additional collateral and borrowing if reasonably favorable terms can be achieved.

Take a hard look at corporate overhead. It is understandably difficult for any CEO whom has been with the company for a number of years to step back and look at corporate overhead objectively.  Many times the CEO has presided over certain program and cost build-ups, and has established personal relationships with management as well as line employees. This may affect the CEO’s thought process and impact objectivity.  Other times, the CEO may know the course of action necessary, but due to emotional or personal ties may prefer someone else, such as a CRO, be the “bad guy” recommending or implementing necessary reductions. Objective assessments of personnel and outputs, such as divisions/services/products/locations, can be some of the hardest to tackle for long-term management.  Where a CRO is relied upon to execute a realignment strategy, the appropriate authority must be vested in that person or implementation will fall flat.

Personnel – People who have managed successfully in the past may not be up to the task going forward, and the CEO cannot afford to keep those who are indecisive or frozen in “analysis paralysis”
if they are going to effectively realign the business.  Retain people who don’t have parochial interests – ones that will take initiative and rise to the challenge, who can motivate and encourage people, and build the company’s future.  Be on the lookout for lower level people who have leadership capability and can step up. While it can be difficult, it is important to cut from the top down and for leadership to set the example for the rest of the company.  Evaluate whether the job function is necessary, not the person in it. If the rank and file perceive inherent unfairness in personnel realignment, productivity, quality and moral will suffer.  Furthermore, people remember how they were treated and certainly will be communicating with customers, suppliers, competitors and other employees as they exit. So it is critical to be fair and clearly communicate the company’s challenges and plan, especially if a reduction-in-force, or RIF, will be part of the realignment.

Personnel realignment should be attacked surgically and intelligently, not piecemeal, and can be achieved through combining functions, reducing layers, removing indecisive managers or those not current with technology, and intensifying resources where the company focus.  In addition, people would rather lose benefits than their job, so it is also important to evaluate benefit plans for cost reduction, employee contribution increases or increases in qualifying benchmarks, or in some cases benefit elimination.

Programs, Products & Locations – “Economics 101” teaches us to ignore sunk costs, which means it doesn’t matter how much the company has spent on something in the past. A determination to continue spending must be made based on expected future profits and cash flow.  While management might be emotionally wed to a historical program, that cannot color today’s assessment of whether or not that program/product/location should continue.  Closure of negative contributing stores or products, and walking away from significant sunk costs, is understandably difficult but necessary for a company’s survival in turbulent times.  Assets from shuttered programs/locations may be deployed elsewhere, or sold and converted to cash.

SG&A -There are a multitude of SG&A items that vary across industry and geography that must be evaluated for impact on liquidity and profitability, including office space, equipment, leases, contracts and services, commission and incentive structure, manufacturing, distribution and logistics, property taxes, and many others. These are critically significant and must be individually considered in any business realignment assessment.

What is your capital spending?  The CEO must judge capital projects by what they consume and what they generate, and as previously discussed, ignore sunk costs and emotional ties.  Projects that won’t earn the cost of capital or reduce resources, such as with IT investment, or won’t come on-line and generate net cash flows for several years, need to be evaluated for deferment or termination.  Management should not, however, defer regulatory or safety issues, or maintenance spending where feasible.  The CEO and finance team should also scrutinize capitalized expenses to ensure they represent true capital projects, and that department costs have not been masked as capital expenditures, artificially distorting operating results.

Summary

Realigning the company’s strategy and focus from revenue generation to cash conservation is essential in these uncertain times.  It requires preparing for downside scenarios, not misguided optimism, functional realignment of responsibilities, and streamlining processes. The CEO must set a bold course and convey confidence to all stakeholders that the company is monitoring events, tackling problems and developing solutions.  Management must promote awareness, establish aggressive budgeting and tracking, and enforce accountability across the organization.  Understanding cash implications of decisions must take priority over blind pursuit of revenue growth or continuation of sub-par historical initiatives.  Announcements regarding cutbacks and retrenchment should be made alongside good news of the company’s future stability.  Maintaining communications with stakeholders, key suppliers and customers will provide credibility to management and position the company to emerge stronger and better positioned for both the short- and longer-term.

About the author: Dawn Ragan has 20 years of experience in financial services and turnaround management. She is currently the Director of Business Turnaround & Restructuring Services at Bridgepoint Consulting, a Texas-based professional services firm. Previously, Ragan was a principal of a national advisory firm. She was also a senior manager and a member of the restructuring practice of a Big Four accounting firm and vice president of a Wall Street investment bank. She is a member of the American Bankruptcy Institute, Turnaround Management Association, Association of Insolvency and Restructuring Advisors, International Women’s Insolvency and Restructuring Confederation, and Texas Wall Street Women.  You may contact her at dragan@bridgepointconsulting.com.

The post Business Realignment Strategies: An Executive Briefing appeared first on Bridgepoint Consulting.

What do you need to do?

• Employers are obligated to inform employees by January 31^st of the market value at the time of exercise so they can prepare their personal returns correctly. The easiest way to do this is by sending employees a letter. Click here for a sample.
• In addition, the company must file Form 3921 with the IRS to notify them about the exercise by February 28th. Click here for IRS link instructions for Form 3921 and a link to the form itself.

The post Have your employees exercised stock options in 2011? appeared first on Bridgepoint Consulting.

 New Year’s Checklist:

• Accounting Updates – Accounting standards issued the past few years have refined the methods and requirements for a number of accounting methods: revenue recognition for particular industries, such as software and hardware sales; variable interest entities (VIEs); lease accounting, both for lessee and lessors; financial statement presentation etc.
• Intangible Assets – Have you reviewed your intangible assets and performed required impairments tests?
• Clean up and reconcile accounting data from 2011 – Have you addressed all of the “miscellaneous” accounts you promised yourself to address by 2011 and still haven’t?
• Finalize 2012 budget – Budgeting in today’s world is a dynamic exercise. Have you finished your 2012 Budget?
• Complete Information Technology system check – With your IP accessible through your netork, IT security is more critical than ever. Isn’t it time to get around to an IT security update?
• Prepare for auditors – Save time and money by being 100% ready for your auditor’s 2012 visit.
• Address HR issues and staffing for 2012 – Have you addressed the HR issues you know are a problem? In 2011, the IRS specifically targeted businesses who mis-classified employee/contractors. In addition, undocumented workers can also be a target.
• Banking Relationships – Are you up to date and current with all of your reporting to your bank and other creditors? Are you in compliance with all loan covenants?

It’s time to get organized for the New Year. Please contact us for more information about Bridgepoint Consulting’s 60+ professionals whose range of experience includes accounting and finance, internal controls, SOX compliance, and IT consulting.

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Our panelists were: Mark Stearns, Senior Director Center of Excellence, SAP BusinessObjects; Troy Saidleman, Account Manager Governance, Risk and Compliance , Oracle Corporation; James Walton, Senior Manager, Ernst & Young, Advisory Services; and moderated by David Roe, Director, Governance Risk & Compliance, Bridgepoint Consulting.

The panel discussed the path to increasing the use of technology/tools in the audit process; the challenges in transforming to more automated data analysis solutions; and examples of benefits gained from embracing such transformation.

A resounding theme by the group was the opportunities to broaden risk coverage and control monitoring through implementing these technology solutions in today’s world of budget constraints. Another theme was the need for Internal Audit leaders to continue developing and improving the technical capabilities of their staff as a critical success factor.

The post Roundtable: Internal Audit – Leveraging ERP Technology appeared first on Bridgepoint Consulting.

“Junior Achievement is a terrific cause,” said Monica Gill. “We’re thrilled to be a part of this corporate challenge hosted by Silicon Labs”.

The Corporate Relay consists of 5 runners covering the marathon distance of 26.2 miles. This year’s race included 1,600+ participants from corporate, public sector, school, and running clubs.

Bridgepoint’s Blue Team included: Felipe Vega; Monica Gill; Bill Getchell (Motion Computing); Joe Leake; and Bill Patterson.

Bridgepoint’s White Team: Pete Pearson; Shelly Hobbs; Kristin Madl (Ortho Kinematics); Zac Fellabaum (Let’s Gel); and Cho Law.

“What fun it is to enjoy the camaraderie and competition with these runners from Bridgepoint and our clients,” said Bill Patterson.

See the race results at austinmarathonrelay.com.

About Bridgepoint Consulting LLC

Transforming companies to achieve success, Bridgepoint Consulting is a leading Texas-based professional services and consulting firm. To bridge gaps and accelerate growth, the firm offers on-demand, experienced professionals and strategic services. Bridgepoint Consulting provides expertise in finance, compliance, IT, transactions and restructuring.

Serving Central Texas for over a decade, Bridgepoint Consulting has more than 60 professionals and has worked with 200 clients in the past 24 months. The firm’s growth and success is a result of its high-caliber professionals and disciplined highly-responsive approach to addressing its clients’ objectives.

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By Gary Dinges | Monday, June 20, 2011, 11:34 AM

A pair of ads from Austin-based EnviroMedia Social Marketing are getting national attention after being honored by the Public Relations Society of America.

Two of the marketing firm’s public service announcements — one for radio, one for TV — were recognized earlier this month at a ceremony in New York.

An ad for the Texas Department of State Health Services’ “Yes You Can” smoking cessation campaign won a Bronze Anvil Award in the radio public service announcement category. Listen to it here.

And a Don’t Mess with Texas spot starring George Strait nabbed a Bronze Anvil Award of Commendation in the TV public service announcement competition. Watch it here.

“The Bronze Anvil Award continues to celebrate where the real action is in the public relations industry and where real practitioner expertise, creativity and communication effectiveness shine the brightest,” said Tanya Morah, the 2011 Bronze Anvil chair and an associate professor of communications at Wilberforce University.

EnviroMedia focuses exclusively on environmental and public health issues. It is based in Austin, and also has an office in Portland, Ore.

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Seeing as BPC is new to blogging, we’ve got a considerable backlog of things we’ve been chomping at the bit to share. We found a post by Jeff Bussgang of Flybridge Capital over at VentureBeat last month that we’ve been meaning to blog about.

Bussgang’s post outlines some savvy advice for entrepreneurs entering into the “investor pitch” phase of their business growth. As an advisory and management consulting firm that most often comes into contact with businesses at critical junctures in their growth, we’ve helped many firms get ready for due diligence. As Flybridge’s Bussgang writes:

“Assume that everything you say will be thoroughly checked out in due diligence. If you claim credit for a company where you played a small role, it’s bad form. I recently called the CEO of a company that an entrepreneur bragged they had led during the pitch. When the CEO told me they were a minor player and left after a brief two years, I stopped spending any more time evaluating the opportunity.

Remember, investors are professional BS detectors. Err on the side of underselling your background because the BS alarm bells may ring in the first few minutes of introduction and spoil the rest of the presentation.”

That rings true for our team here at Bridgepoint. When we’ve gone through an “investment prep drill” with businesses looking to prepare for due diligence and take on additional funding, we’re told it helps to accelerate funding. That has everything to do with identifying the true strengths and, yes, the true liabilities of a company in transition and understanding how to get out ahead of those strengths and weaknesses ahead of the due diligence process.

In a business environment as saturated and credible as Central Texas, investors have seen everything. Real prep for due diligence prepares a business to confound those expectations and move into a new phase of growth built on real strength and, most importantly, sound information.

The post Growth Company ABC’s: “Always Be Credible” appeared first on Bridgepoint Consulting.

• We placed a Corporate Controller with a publicly-traded software company in Austin. The search led us to an outstanding candidate from the Dallas market that was looking to relocate his family to Austin.
• A fast-growing Manufacturing client of ours, one of the leading employers in Austin, turned to Bridgepoint after an exhausting 3 month search for an experienced Sr. Financial Analyst. They had vetted over 15 individuals through the hiring process without identifying a finalist. Within a few days, we sourced a true “A” player in the market who was interested in the role. She started with our client in January.
• Bridgepoint partnered with a Venture Capital-backed technology company in their search for an Accounting Manager to build a top-notch Accounting department from scratch. Our candidate has a successful track record with one of the Big 4 Audit firms and has hit the ground running, contributing to our client’s extremely fast growth!

Interestingly, another change in the dynamics is employee loyalty to their current employers. Here are the top 5 reasons (objections) we hear today from potential candidates that decide to stay with their current job:

1. Newfound confidence and excitement about their employer’s financial results or business strategy.
2. Recently received a raise or promotion!
3. Increased sense of loyalty and camaraderie at their current job after making it through lean times.
4. Upcoming significant bonus payout (unheard of in 2009-2010!)
5. Too busy at their current job to devote time to a search!!

As always, if your company has a Permanent need in Accounting/Finance, please contact Spencer Epley, Recruiting Manager, to discuss how Bridgepoint might assist in the search. Also, if you know of a qualified candidate seeking a new opportunity in Austin, don’t hesitate to make an introduction. Phone: 512.437.7924; e-mail: sepley@bridgepointconsulting.com

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While it’s a fact of life for financial and IT services organizations to keep an eye on evolving regulatory standards, new standards nonetheless have a way of sneaking up on even the most experienced firms.

One such major accounting standard change about to take place is the move to SSAE 16, replacing SAS 70 under United States accounting law, starting June 15, 2011. In other words, in less than six months, this important new set of controls for third-party services organizations, which mirrors the international standard ISAE 3402, will be the rule of the land in the US.

Just as we have with SAS 70, Sarbanes-Oxley, and the pre-work clients seek to get ready for other financial and IT controls audits, Bridgepoint Consulting can provide the advice and resources your company needs to transition to SSAE 16 compliance.

SSAE 16 regulation calls for new reporting sections, additional organizational responsibilities, and additional requirements for “inclusive” reporting methods, among other changes. Depending on your organization’s policies and goals, the regulation will affect you in different ways. Chris Shelman, contributor to Accounting Today, notes:

The majority of service organizations appear poised to undergo a final SAS 70 audit and use the next 12 months preparing for the transition. During this time, service organizations will have to assess whether they are going to have an assessment performed in accordance with SSAE 16, ISAE 3402, or both, based on their customers’ needs.

While not a radical overhaul, these changes are significant and your organization should be prepared: either, as a service provider, implementing (and being audited against) the new standards, or, as a user of third-parties, understanding the changes and passed through implications, if any, on your own operations.

As your highly responsive partner, Bridgepoint will help you navigate these choices with sound research and a detailed plan for implementation. There’s no reason to leave room for error; we’ll make sure you can adapt quickly and avoid potential miscues, all in the most efficient, cost-effective way.

Stay tuned for additional resources coming soon on SSAE 16 and other updates to the regulatory environment. For the latest news, follow @BPCAustin on Twitter, subscribe to our e-mail newsletter, or check our LinkedIn and Facebook pages.

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After a few months of work rejiggering our online presence, Bridgepoint’s home on the world wide web is entering a new era. While the site is designed to provide more ease of access to current and perspective clients looking to explore our extensive consulting and advisory offerings, we’re particularly excited about the opportunity to broadcast the insight we’re constantly gathering in our work with mid-market firms, start-ups and high growth enterprises.

You’ll be able to find those updates weekly, right here on our blog. In addition, you can sign up for our e-newsletter and find out about the ongoing events we offer as part of our service to clients and the Texas business community.

In coming weeks, we’ll also be taking this opportunity to invite you to engage with us through a few social media channels, including Twitter and Facebook. We’ll save new media innovation for the start-ups we service, but we’re happy to be providing a set of more robust channels through which clients and colleagues can keep up to date on what Bridgepoint is doing and thinking.

Keep checking back here on the blog and, as always, e-mail us with any feedback.

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Long-time economic development consulting expert, Angelos Angelou, will be presenting his customary two-year forecast, which is acknowledged as one of the benchmarks for gauging the vitality of the Central Texas business community.

Bridgepoint Consulting is pleased to be a promotional partner for the Forecast event this year, and Forecast Preview reception, the evening before. In addition to Angelos, other speakers on the program will be Greg Ip, the US Economics Editor for The Economist magazine and Texas State Senator Kirk Watson.

AngelouEconomics specializes in the site selection needs of the technology industry and the communities seeking to recruit them. They create custom economic development strategies for communities that want to expand their high-tech base through the recruitment of businesses and the creation of new companies.

Additional information about the event may be found on the AngelouEconomics website.  If you would like more information about the preview event, please contact Vince Trevino at 512-437-7917.

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Our team analyzes financing options, divestment needs, mergers and acquisition strategies, and the value of key assets, including intellectual property, to create a plan of action.

Read more about our Business Turnaround & Restructuring Services and how Bridgepoint Consulting can assist your management team with Strategic Realignment, Financial Improvement, or Legal Guidance & Disputes.

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