A global provider of information technology infrastructure and maintenance support services engaged Stout to assess the company’s accounting and finance function ahead of an anticipated investment event.

The company operated with a lean accounting and finance team, a QuickBooks Online enterprise resource planning system supported by five largely unintegrated ancillary systems, and financial reporting that blended generally accepted accounting principles (GAAP), cash, and tax-basis accounting. Further, the company did not have any internal M&A experience. As such, a key priority was leveraging our expertise to ensure the demands of a Quality of Earnings (QoE) process and eventual private equity (PE) ownership were appropriately planned for.

Stout conducted stakeholder interviews across the order-to-cash, procure-to-pay, record-to-report, and financial planning & analysis processes to identify gaps ahead of a QoE process and subsequent PE reporting requirements. To address any outstanding gaps, we developed a detailed roadmap with actionable recommendations. The roadmap produced prioritized observations and recommendations spanning process improvement, technology, and people, organized by implementation horizon: short-term quick wins, pre-investment priorities, first-hundred-days initiatives, and future state targets.

Key findings included the absence of consistent month-end close process, inconsistent accrual accounting, undocumented GAAP policies, limited visibility into contract profitability, and accounting errors in previous periods. In addition to the strategic roadmap, we worked with the company to drive immediate change to priority items. Stout worked hand in hand with the company’s controller to provide coaching and insight on required new processes.

As part of the roadmap, we delivered a maturity assessment benchmarking the company across financial reporting, controls, systems, and governance, a QuickBooks Online chart-of-accounts review, and a proposed post-investment organizational structure. Stout engaged the prospective sponsor in discussions to ensure both the target company and investment team were aligned on immediate steps before launching a formal QoE process.