When your business needs financial statements for lenders, investors, or other stakeholders, you’ll likely encounter requests for “audited,” “reviewed,” or “compiled” financial statements. These terms represent different levels of assurance that a CPA provides regarding your financial information’s accuracy and reliability. Understanding these distinctions helps you choose the right service for your specific situation while managing costs effectively.   

Audit vs. Review vs. Compilation 

Each service offers a different level of CPA involvement and assurance, from basic compilation services that focus on proper formatting to comprehensive audits that provide the highest level of confidence in your financial statements. This article will explore the key differences between compilations, reviews, and audits to help you determine which service best meets your business needs. 

Understanding Compilation Services 

A compilation represents the most basic level of financial statement service. During this process, your CPA takes the financial data you provide and formats it into proper financial statements without performing any verification procedures. 

The CPA gains a general understanding of your business and its accounting policies but doesn’t test your records, evaluate internal controls, or assess fraud risk. You might need to provide certain documents like  contracts to help draft financial statement footnotes, but the CPA doesn’t verify this information’s accuracy unless something may stand out as blatantly inaccurate. 

Because compilation work involves limited procedures, these services cost less than reviews or audits. However, the compilation report explicitly states that no assurance is provided regarding the accuracy of your financial statements. The CPA doesn’t need to maintain independence from your company, but must disclose any lack of independence in the report. 

“Compilations work well when you need formatted financial statements for internal use or when external parties require basic financial information without extensive verification.” – Kristine Malmanis – Partner, Assurance 

What Review Services Involve 

Review services provide a middle ground between compilations and audits. Your CPA performs analytical procedures and makes inquiries to provide limited assurance that your financial statements don’t require material modifications. 

During a review, the CPA compares your current year numbers to prior years, analyzes financial ratios against industry benchmarks, and investigates unusual variances. If something appears inconsistent, they’ll ask management questions or request supporting documentation to understand the discrepancy. 

Unlike compilations, review services require CPA independence. Your accountant can’t have financial interests in your company, serve in management roles, or face pressure to promote your business interests. 

“A financial statement review provides growing businesses with limited assurance that their financial statements are accurate, which helps builds credibility with management, lenders, and investors, without the cost of a full audit.” – Kristine Malmanis 

Reviews don’t include testing accounting records, evaluating internal controls, or assessing fraud risk like audits do. The review report states whether the CPA is aware of any material modifications needed for your financial statements to conform to specified accounting standards. 

This service level often satisfies lenders and investors who want more assurance than a compilation provides but don’t require the comprehensive verification that audits deliver. 

Comprehensive Audit Procedures 

Audits provide the highest level of assurance available from a CPA firm. The objective involves obtaining reasonable assurance that your financial statements present a fair view of your company’s financial position and conform to applicable accounting standards like GAAP. 

Auditors perform extensive procedures to achieve this assurance level. They obtain an understanding of your internal controls, assess fraud risk, and conduct detailed testing of account balances and transactions. This includes confirming balances with third parties, observing physical inventory counts, and examining supporting documentation for significant transactions.  

“Audit-level assurance is required in situations where owners, lenders, or other stakeholders need a higher level of confidence that the financial statements are free of material misstatement. Examples include public companies or companies seeking significant financing.” – Kristine Malmanis 

The term “reasonable assurance” is important here. Auditors can’t provide absolute assurance because they typically test samples rather than every transaction, and accounting standards require professional judgment in their application. 

Independence requirements for audits match those for reviews. The CPA must maintain objectivity and avoid conflicts of interest that could compromise their professional judgment. 

Because of their comprehensive nature, audits require the most time and resources, making them the most expensive assurance service. However, they provide stakeholders with the highest confidence level in your financial information. 

Learn more about our Audit Services

Choosing the Right Service for Your Business 

Your choice between compilation, review, or audit services depends on several factors. Consider who will use your financial statements and what level of assurance they require. Banks seeking larger loan amounts typically want reviews or audits, while smaller financing might accept compilations. 

Think about your business’s complexity and risk profile. Companies with sophisticated operations, significant transactions with related parties, or complex accounting issues often benefit from higher assurance levels. 

Budget considerations also play a role. While audits provide maximum assurance, they’re not always necessary or cost-effective for every situation. 

The stage of your business development matters too. Startups might need only compilations, while established companies seeking investors or planning acquisitions typically require audits. 

Working with BPM for Your Assurance Needs 

BPM provides comprehensive audit, review, and compilation services tailored to your specific business requirements. Our team works closely with you to understand your stakeholder needs, industry requirements, and budget considerations to recommend the most appropriate service level. We recognize that choosing the right assurance service involves balancing cost considerations with the credibility your financial statements need to support your business objectives. 

Whether you need basic compilation services for internal management reporting or comprehensive audit procedures to support major financing transactions, BPM delivers quality services that meet professional standards while serving your business interests. To discuss which financial statement service best supports your current business goals and stakeholder requirements, contact us.    

The IRS has finally delivered guidance that many small businesses have been waiting for. Revenue Procedure 2025-28 gives qualified small business taxpayers a practical way to handle their research and experimental (R&E) expenditures retroactively, without the hassle of amending multiple prior-year returns. 

If your business invests in R&E activities, this could significantly simplify your 2024 tax filing and reduce your administrative burden. Here’s what you need to know and how to take advantage of this relief. 

Who qualifies for small business relief? 

Not every business can use this simplified approach. To qualify for the relief outlined in Rev. Proc. 2025-28, your business needs to meet these specific criteria: 

Average gross receipts test: Your average annual gross receipts for the three tax years ending with 2024 (typically 2022–2024) can’t exceed $31 million. The IRS calculates this using all income sources, reduced by returns and allowances. If your business wasn’t operating for the full three-year period, the calculation adjusts proportionally. 

Tax shelter exclusion: Your business can’t be classified as a tax shelter under Section 448(d)(3). 

If you meet these requirements, you have access to several valuable options for handling your R&E expenses. 

Your election options under Section 174A 

Revenue Procedure 2025-28 gives you flexibility in how you treat R&E costs incurred in tax years beginning after December 31, 2021, and before January 1, 2025. Here’s how it works: 

The retroactive election 

You can elect to apply Section 174A retroactively, which means you can choose to either: 

• Immediately deduct your R&E costs, or 
• Amortize them over at least 60 months 

The key advantage? You can make this election on your 2024 tax return and avoid amending all your prior returns right away. Instead, you simply include a declaration stating you’ll file amended returns for applicable prior years by September 15, 2025. 

The automatic deemed election 

If you deduct your 2024 domestic R&E expenditures and meet the other requirements in Section 3.03, the IRS will treat you as having made the election automatically. This streamlines the process even further. 

Learn more about our R&D Tax Credits Services

Understanding the timing and deadlines 

Getting the timing right matters. Here are the critical dates you need to track: 

Election deadline: You must file your election by the earlier of July 6, 2026, or your statute of limitations expiration date for the relevant tax year. 

For example, if you filed your 2022 return on March 1, 2023, your election for that year must be submitted by April 15, 2026. The revenue procedure includes additional timing scenarios in Section 3.03(3)(b)-(d) that may apply to your situation. 

The alternative: Small business retroactive method change 

If you don’t make the Section 3 election described above, you have another option. Under Section 7.02(3)(c), you can change your accounting method to the “small business retroactive method” for tax years beginning before 2025. 

This approach works differently: 

• You file an accounting method change for your first taxable year beginning after December 31, 2024 
• You can deduct any remaining unamortized R&E costs either entirely in 2025 or split between 2025 and 2026 

This flexibility lets you align your deductions with your tax planning strategy for the next couple of years. 

Don’t overlook the Section 280C considerations 

Both elections come with an important wrinkle: how they interact with your R&D tax credits under Section 280C(c)(2). 

Revenue Procedure 2025-28 provides procedures for making a late Section 280C(c)(2) election or revoking a prior one. This matters because it affects how your R&D tax credits work alongside your deductible R&E expenses. You’ll want to evaluate these implications carefully as part of your overall R&D credit and amendment strategy—the interaction can significantly impact your tax position. 

What this means for your 2024 filing 

This guidance arrives at a crucial time. If you’ve been capitalizing and amortizing your R&E expenses under Section 174’s mandatory requirements, you now have a path to retroactively expense those costs—potentially freeing up cash flow and simplifying your tax compliance. 

The administrative relief is substantial. Rather than preparing and filing multiple amended returns immediately, you can make your election on your 2024 return and have until September 15, 2025, to handle the prior years. 

However, the decision isn’t one-size-fits-all. Your optimal approach depends on your specific circumstances, including: 

• Your gross receipts trajectory over the qualification period 
• Your current and projected R&D tax credit position 
• Your Section 280C election status 
• Your broader tax planning objectives 

Take action before the window closes 

Revenue Procedure 2025-28 represents a significant opportunity for small businesses investing in research and development. But taking advantage of it requires prompt action—you need to make decisions now to coordinate your 2024 filing with your amendment strategy. 

BPM’s tax advisors can help you navigate these elections and determine the most advantageous approach for your business. We can assist with eligibility analysis, election statement preparation, and strategic planning around your amended returns and R&D credit position. 

Contact your BPM advisor or visit bpm.com to discuss how Revenue Procedure 2025-28 impacts your 2024 tax filing and your long-term R&E tax strategy. 

Transfer pricing affects every business operating across international borders, yet many business leaders don’t fully understand or don’t fully value its strategic potential for their organizations. When companies engage in transactions with related entities in different countries (and sometimes even states), they have opportunities to optimize their tax position, improve cash management, and align their transfer pricing models with broader business objectives. Understanding transfer pricing becomes crucial not only for maintaining compliance but also for maximizing operational efficiency and supporting business growth. 

This article will explore transfer pricing fundamentals, examine its strategic applications for tax planning and business optimization, and outline how to operationalize effective transfer pricing models while maintaining compliance. 

Understanding Transfer Pricing Basics 

Transfer pricing refers to the prices companies set for transactions between related entities, such as subsidiaries, parent companies or sister companies. These transactions can involve goods, services, intellectual property or financing arrangements. The key principle governing transfer pricing is the “arm’s length standard,” which requires related party transactions to occur at prices that unrelated parties would agree upon in similar circumstances. 

Consider a U.S. parent company that purchases manufactured goods from its wholly-owned subsidiary in Ireland. The price the parent company pays for these goods represents the transfer price. This pricing decision affects not only tax obligations but also cash flow management, customs and duties, performance measurement, and overall business strategy. 

Companies establish transfer prices for various strategic reasons: 

Tax Planning and Optimization 

• Structuring transactions to achieve tax-efficient outcomes across jurisdictions 
• Aligning transfer pricing with business substance and economic reality 
• Supporting long-term tax planning strategies 

Business Operations 

• Measuring subsidiary performance accurately 
• Allocating resources efficiently across the organization 
• Managing cash flow between entities 
• Supporting operational decision-making 

Risk Management 

• Addressing potential tariff and customs implications 
• Preparing for due diligence in M&A transactions 
• Building defensible positions for tax authority interactions 

Learn more about our Transfer Pricing services

Strategic Tax Planning Through Transfer Pricing 

Effective transfer pricing serves as a powerful tool for tax-efficient structuring that aligns with genuine business needs. Organizations can develop transfer pricing models that support their cash management strategies while ensuring economic substance backs their pricing decisions. 

Modern transfer pricing planning considers the broader business context, including supply chain optimization, intellectual property strategies, and regional expansion strategies. Companies increasingly integrate transfer pricing considerations into their overall business planning process, ensuring that tax efficiency supports rather than conflicts with operational objectives. 

The key lies in developing sustainable models that reflect the real value creation within the organization while achieving legitimate tax benefits. This approach requires understanding how different jurisdictions approach transfer pricing and designing structures that work effectively across multiple tax systems. 

Operationalizing Transfer Pricing Models 

Once established, transfer pricing policies require efficient implementation and ongoing administration. Technology plays an increasingly important role in managing the complexity of intercompany transactions across multiple entities and jurisdictions. 

Successful operationalization includes: 

Process Integration 

• Embedding transfer pricing considerations into standard business processes 
• Automating documentation and reporting where possible 
• Creating clear governance frameworks for pricing decisions 

Technology Solutions 

• Implementing systems that support consistent pricing across transactions 
• Utilizing data analytics to monitor compliance and identify opportunities 
• Streamlining documentation and reporting processes 

Ongoing Management 

• Regular review and updating of transfer pricing policies 
• Monitoring changes in business operations that may affect pricing 
• Maintaining current documentation to support pricing decisions 

Transfer Pricing in Transactions and Due Diligence 

Transfer pricing models and documentation play a critical role in M&A transactions, both as a due diligence item and as a factor in valuation. Robust transfer pricing documentation demonstrates good governance and reduces potential liabilities for acquirers. 

During exit planning or acquisition processes, well-documented transfer pricing practices can: 

• Reduce due diligence timelines and costs 
• Minimize potential adjustment risks 
• Support valuation arguments 
• Demonstrate operational sophistication to potential buyers or investors 

Organizations planning for eventual transactions should ensure their transfer pricing models and documentation meet institutional-grade standards well in advance of any transaction timeline. 

Compliance and Risk Management 

While strategic planning drives much of transfer pricing’s value, compliance remains essential for protecting that value. Tax authorities worldwide continue to focus on transfer pricing as they work to help ensure appropriate tax collection in their jurisdictions. 

Transfer pricing violations can carry significant penalties, with the IRS imposing penalties of up to 40 percent of additional taxes owed in cases of substantial understatement. Beyond financial penalties, transfer pricing disputes can trigger lengthy audits and create administrative burdens across multiple jurisdictions. 

However, for many organizations, particularly smaller companies, the compliance risk may be manageable with proper planning and documentation. The key lies in building defensible positions through: 

Comprehensive Documentation 

• Economic analyses supporting chosen transfer prices 
• Comparisons with similar transactions between unrelated parties 
• Clear explanations of business rationale behind intercompany arrangements 

Proactive Planning 

• Regular review of transfer pricing positions 
• Updates reflecting changes in business operations or tax law 
• Integration with overall tax planning strategies 

Building Effective Transfer Pricing Programs 

Successful transfer pricing programs balance strategic objectives with compliance requirements. Organizations should consider transfer pricing as part of their broader business strategy rather than viewing it solely through a compliance lens. 

Effective programs typically include: 

Strategic Foundation 

• Clear understanding of business objectives and value drivers 
• Integration with overall tax and business planning 
• Consideration of operational and financial factors 

Robust Documentation 

• Transfer pricing studies that support chosen methodologies 
• Regular updates reflecting business changes 
• Documentation that supports both planning and compliance objectives 

Ongoing Management 

• Regular monitoring and updating of policies 
• Proactive identification of planning opportunities 
• Efficient administration through process and technology 

Working with BPM 

Transfer pricing requires specialized knowledge of complex regulations and strategic planning considerations that vary across jurisdictions. BPM’s tax professionals understand both the compliance requirements and the strategic opportunities that effective transfer pricing can provide. 

Our team helps companies develop comprehensive transfer pricing strategies that support business objectives while maintaining appropriate compliance standards. We provide technology-enabled transfer pricing analyses, documentation, operational transfer pricing support and automation, ongoing advisory services, and support for transaction-related transfer pricing needs. 

To schedule a consultation with our transfer pricing team to review your current practices and identify opportunities for improvement, contact us. 

California is raising the bar on climate accountability. Two landmark laws—SB 253 and SB 261—are reshaping how companies report on greenhouse gas emissions and climate-related financial risks. If your company does business in California and meets certain revenue thresholds, these requirements apply to you. 

While the California Air Resources Board (CARB) continues working on final implementation rules, the statutory deadlines haven’t changed. That makes now the right time to prepare. This isn’t just about checking a compliance box. It’s about building transparency, demonstrating resilience, and strengthening trust with stakeholders who increasingly expect companies to take climate action seriously. 

What You Need to Know About SB 253 and SB 261 

SB 253 – Climate Corporate Data Accountability Act 

This law applies to companies with annual global revenues exceeding $1 billion that do business in California. Here’s what it requires: 

• Disclosure of Scope 1 and Scope 2 emissions by June 30, 2026 
• Scope 3 emissions reporting starting in 2027 
• Independent third-party assurance of all disclosures 

SB 261 – Climate-Related Financial Risk Act 

This law casts a wider net, applying to companies with annual global revenues of $500 million or more that do business in California. It requires: 

• Biennial public reports on climate-related financial risks starting January 1, 2026 
• Clear strategies for mitigating those risks 

For complete legislative details, visit SB 253 and SB 261. 

Learn more about ESG Advisory Services

Does This Apply to Your Company? 

You don’t need to be headquartered in California to fall under these requirements. Any organization “doing business” in the state that meets the revenue thresholds is in scope. 

CARB has published a preliminary list of companies they believe are covered under these laws. You can review it here (September 2025). 

Why Early Preparation Matters 

It’s tempting to wait for CARB to finalize all the implementation details. But here’s the reality: the statutory deadlines aren’t moving, and these reporting requirements are complex. Companies that start preparing now will be positioned for success. 

Here’s what early action gets you: 

Getting your data systems and processes ready takes time, especially for Scope 3 emissions that reach across your entire value chain. Starting now gives you the runway you need. 

Companies that demonstrate proactive compliance and sustainability leadership stand out. Early preparation shows stakeholders you’re serious about climate accountability. 

CARB’s initial enforcement will likely focus on good-faith efforts. Being prepared protects you from penalties and positions you as a responsible corporate citizen. 

Understanding the Stakes 

Non-compliance carries real consequences. SB 253 authorizes penalties of up to $500,000 per year for failure to report emissions. SB 261 imposes fines for missing climate risk disclosures. CARB will oversee enforcement, with an initial emphasis on transparency and good-faith efforts before escalating penalties. 

Meeting Assurance Requirements 

Independent verification isn’t optional; it’s required. Your disclosures must meet recognized assurance standards such as ISO 14064 or AICPA attestation frameworks. 

We recommend engaging with assurance providers early in the process. They can help validate your methodologies, strengthen your internal controls, and ensure your reporting systems are audit-ready from the start. 

What Makes This Challenging 

Let’s be honest about the hurdles ahead. Preparing for these disclosures isn’t quick or simple. 

• Scope 3 is complex. You’ll need to map emissions across your entire value chain and potentially work closely with suppliers who may not have this data readily available. 
• Climate risk connects to everything. Your climate disclosures need to align with enterprise risk management and governance structures across your organization. 
• Many companies lack the right systems. ESG data management often requires new technology and processes to produce reports that meet assurance standards. 

These challenges are real, but they’re not insurmountable. Companies that start now will have time to address them methodically. 

How to Get Started Today 

Here’s what we recommend to position your organization for success: 

• Conduct a comprehensive emissions inventory. This includes all Scope 3 categories. Understanding your current baseline is the essential first step. 
• Align with recognized frameworks. Global standards like the Task Force on Climate-related Financial Disclosures (TCFD) and the IFRS Sustainability Disclosure Standards (IFRS S2) provide proven approaches that will serve you beyond California’s requirements. 
• Engage assurance providers now. Early involvement helps validate your approach and identify gaps before you’re up against tight deadlines. 
• Build the right governance structures. Climate risk oversight needs clear ownership and integration into your enterprise risk management processes. 
• Invest in technology. ESG data management and reporting automation will be critical for producing accurate, timely disclosures that meet assurance standards. 
• Leverage CARB’s draft resources. CARB has published a Scope 1 and Scope 2 GHG reporting template and a Climate-Related Financial Risk Report Checklist. These tools provide clarity on expected disclosures. You can review it here (October 2025). 

Moving forward with confidence 

SB 253 and SB 261 represent a significant shift in corporate climate accountability. But they also create an opportunity. Organizations that embrace these will strengthen stakeholder trust, improve operational resilience, and position themselves as sustainability leaders. 

At BPM, we understand that navigating these new requirements can feel overwhelming. That’s why we’re here. Our team brings deep expertise in assurance, ESG strategy, and sustainability reporting. We’ve helped organizations like yours build robust climate disclosure programs that meet regulatory requirements while creating real business value. 

Looking for a team who understands where you’re headed and how to help you get there? Let’s talk about preparing your organization for California’s climate disclosure requirements. 

Cybercriminals and nation-state actors are launching more sophisticated attacks against electric utility infrastructure than ever before. Power grids, distribution networks, and control systems that millions depend on daily have become prime targets for attackers seeking to disrupt essential services. The consequences of successful attacks extend far beyond financial losses, potentially affecting public safety, economic stability, and national security. This article will explore how penetration testing serves as a crucial defense mechanism for protecting electric utility infrastructure from evolving cyber threats 

The Unique Threat Landscape Facing Electric Utilities  

Electric utilities operate in a complex threat environment. Traditional cybersecurity approaches often fall short because utility systems blend information technology with operational technology in ways that create unique vulnerabilities. 

Power generation facilities, transmission systems, and distribution networks rely on interconnected systems that were originally designed for reliability and efficiency rather than security. Many of these systems use legacy protocols and equipment that cannot easily accommodate modern security measures. Attackers understand these weaknesses and target the interfaces between corporate networks and operational systems. 

The financial motivations behind utility attacks continue to grow. Ransomware groups view utilities as lucrative targets because operational disruptions can force quick payment decisions. Non-compliance with NERC CIP requirements can lead to fines and forced outages for generation and transmission. Furthermore, the organizational response required to move into compliance often leads to even more costly employee work efforts, time, and resources. 

Why Traditional Security Measures aren’t Sufficient 

Standard cybersecurity tools and practices that work well in typical corporate environments often prove inadequate for electric utility infrastructure. The operational technology environments that control power systems have specific requirements that conventional security solutions cannot address effectively. 

Network segmentation becomes challenging when operational systems need to communicate across different zones and with external partners. Real-time operational requirements also create constraints that don’t exist in traditional IT environments. Power systems cannot tolerate the latency that many security tools introduce, and maintenance windows for security updates are extremely limited. These factors create persistent vulnerabilities that attackers can exploit. 

How Penetration Testing Addresses Utility-Specific Vulnerabilities 

Penetration testing provides electric utilities with a controlled method for identifying and addressing security weaknesses before attackers can exploit them. Unlike automated vulnerability scanners, penetration tests can safely evaluate the complex interactions between IT and operational technology systems. 

The testing process reveals vulnerabilities in network segmentation, access controls, and monitoring systems that automated tools might miss. Testers can also evaluate physical security measures at substations and control facilities, providing a comprehensive assessment of potential attack vectors. 

Regulatory Compliance and Industry Standards 

Electric utilities must comply with stringent regulatory requirements that mandate regular security assessments. The North American Electric Reliability Corporation Critical Infrastructure Protection standards require utilities to demonstrate that they’ve implemented appropriate cybersecurity measures and conducted regular testing. 

Penetration testing helps utilities meet these compliance obligations while going beyond checkbox requirements to provide genuine security improvements. Regulators increasingly expect utilities to conduct sophisticated security assessments that reflect the current threat environment.  
 
“BPM recommends performing cybersecurity assessments once every year, which if scheduled ahead of your compliance reporting window, can aid in several common processes. For example, performing a carefully orchestrated penetration test can help satisfy your electronic and physical access reviews, port/service review, training requirements, and more. This penetration test will also illuminate potential attack vectors into your OT network that have gone unnoticed despite CIP compliance.” – Ryan Ferran 

The testing documentation also serves as evidence of due diligence in the event of a security incident. Utilities that can demonstrate proactive security testing are better positioned to manage regulatory responses and maintain their operating licenses. 

Learn more about How to do penetration testing

Building Resilient Defenses Through Continuous Testing 

Effective penetration testing for electric utilities requires an ongoing approach rather than periodic assessments. Threat actors continuously develop new attack techniques, and utility systems evolve through equipment upgrades and operational changes. 

Regular testing helps utilities understand how their security posture changes over time and identifies new vulnerabilities that emerge from system modifications. The testing results inform security investments and help prioritize remediation efforts based on actual risk levels rather than theoretical concerns. 

“While absolutely necessary and beneficial to the Bulk Electric System (BES), NERC CIP compliance can cast a shadow over real-world security. CIP standards help organizations meet the baseline to operate on the BES; however, surviving an actual cyber attack requires more than baseline compliance. In my experience, the organizations that are actually in a prepared and defensive position performed several in-depth security review/remediation cycles over a few years. From the pen tests I have performed, the overlap of IT and OT is full of vulnerabilities, often neglected, erroneously out of CIP scope, and exactly where I succeed in infiltrating power companies.” – Ryan Ferran 
 
Testing also provides valuable training opportunities for utility security teams, helping them understand attacker techniques and improve their incident response capabilities. 

Working with BPM for comprehensive security assessment 

BPM brings deep understanding of both cybersecurity practices and electric utility operations to deliver penetration testing services that address your specific infrastructure needs. Our team combines technical security knowledge with practical experience in power system operations, ensuring that testing activities enhance security without disrupting critical services. 

We work closely with your operational and security teams to develop testing strategies that align with your prioritized security concerns, common gaps in security from our own experience, and regulatory requirements. Our comprehensive approach examines both cyber and physical security aspects of your infrastructure, providing actionable recommendations that strengthen your overall security posture. To discuss how our specialized penetration testing services can help protect your critical infrastructure from evolving cyber threats, contact us.  

Your finance function should be a source of confidence, not concern. But too often, small operational weaknesses go unnoticed until they snowball into serious problems that threaten cash flow, decision-making, and growth. The good news is that these vulnerabilities usually leave clues long before they become crises. 

5 ways to identify weaknesses in your finance operations 

This article will walk you through the warning signs to watch for and the practical steps you can take to strengthen your finance operations before minor issues turn into major risks. 

Recognize the early warning signs 

Finance weaknesses rarely announce themselves. They show up as small frustrations that your team learns to work around. A payment that’s slightly late. A report that needs corrections. An invoice that slips through the cracks. 

Start by paying attention to patterns in day-to-day operations. Are vendor payments consistently going out at the last minute? Do your financial reports require frequent revisions after they’re initially prepared? These aren’t just inconveniences. They’re symptoms of deeper operational issues. 

Cash flow problems often serve as the canary in the coal mine. If your business regularly faces unexpected shortfalls or struggles to cover routine expenses, something in your finance operations needs attention. The same goes for rising operational costs that don’t seem tied to business growth. 

Customer payment delays can also signal process weaknesses. When clients consistently pay late, the problem might not be the clients themselves but your invoicing and collection procedures. 

Conduct a thorough operational review 

Once you’ve identified potential red flags, take a systematic look at your current finance operations. This means examining every aspect of how financial information flows through your organization.  

Start with your core processes. Map out how transactions move from initiation to completion. Where do things slow down? Where do errors occur most frequently? These bottlenecks and error points reveal where your operations are most vulnerable. 

Review the accuracy and timeliness of your financial data. Can your leadership team access reliable financial information when they need it? If not, you’re operating with a significant blind spot that increases risk across the organization. 

Consider the tools and systems your team uses daily. Outdated technology or disconnected systems force your team to work harder while increasing the chance of mistakes. Manual data entry, spreadsheet-based processes, and systems that don’t talk to each other all create opportunities for problems. 

Use metrics to uncover hidden weaknesses 

Numbers tell stories that observations might miss. The right metrics can reveal operational weaknesses that aren’t immediately obvious. 

Track your accounts payable turnover to understand how efficiently you’re managing vendor relationships. A declining rate might indicate process issues that could damage supplier relationships over time. 

Monitor your accounts receivable aging carefully. When the time between invoicing and payment starts stretching out, it points to collection process weaknesses that affect cash flow. 

Your cash conversion cycle measures how long cash is tied up in operations. A lengthening cycle suggests inefficiencies that are constraining your financial flexibility. 

Don’t forget about profit margins. If margins are shrinking despite steady revenue, operational costs are likely creeping up in ways that deserve investigation. 

Streamline before problems escalate 

Identifying weaknesses means nothing without action. The most effective response combines quick fixes with longer-term structural improvements. 

Automation offers one of the fastest paths to reducing operational risk. Repetitive tasks like invoice processing, expense tracking, and payment scheduling can be automated to eliminate errors and free your team for more valuable work. 

Standardizing processes across your finance function reduces confusion and inconsistency. When everyone follows the same procedures, mistakes decrease and training new team members becomes easier. 

Building a culture of continuous improvement within your finance team creates an environment where weaknesses get spotted and addressed quickly. Team members who feel empowered to suggest improvements become your best defense against operational risks. 

Think beyond quick fixes 

Addressing immediate weaknesses is important, but lasting improvement requires a strategic approach to your finance operations as a whole. 

Set specific, measurable goals for operational improvement. Vague intentions to “do better” won’t drive change. Clear targets like reducing the invoice-to-payment cycle by 30% or cutting error rates in half give your team something concrete to work toward. 

Create accountability by assigning ownership of specific improvements to team members. Regular progress reviews keep initiatives moving forward and prevent backsliding into old habits. 

Most importantly, recognize that finance operations need ongoing attention. Markets change, regulations evolve, and business needs shift. What works today might create vulnerabilities tomorrow if you’re not continuously evaluating and adapting. 

Partner with BPM for finance transformation 

Spotting weaknesses is one thing. Transforming your finance function into a strategic asset is another. BPM’s Finance Transformation Practice helps organizations move beyond fixing problems to building finance operations that drive better decisions and stronger business performance. 

We take a comprehensive approach that combines process improvement, automation, digitalization, and data-driven decision-making. Our team works alongside yours to create integrated systems that eliminate silos, enhance security and compliance, and turn your finance function into a competitive advantage. To discuss how we can help transform your finance operations from a potential risk into an engine for growth, contact us.  

Selecting the right accounting software for your organization’s needs can be daunting. This is especially true for rapidly growing small-to-medium-sized businesses (SMBs).  

Understanding key features and capabilities can help you choose the solution that best supports your organization’s needs. In this article, we’ll compare two of the most popular choices: Sage Intacct vs. QuickBooks. Both cater to SMBs and offer the ability to streamline your accounting processes. The choice between the two depends on your organization’s size, complexity and needs. 

Sage Intacct Overview 

Sage Intacct is a true cloud-based accounting and ERP system. Launched in 1999 by Intacct Corporation and later acquired by Sage Group PLC, Sage Intacct is now a leading ERP software. It is the only ERP recommended by the American Institute of Certified Public Accountants (AICPA). 

Sage Intacct is a good choice for SMBs, especially those with multiple entities. Many organizations combine Sage Intacct with outsourced accounting services during implementation and beyond for optimal results. Its advanced financial reporting gives users insights into their financial performance. The ability to track key metrics helps business owners make data-driven decisions.  

Sage Intacct automates a wide range of financial processes, including invoice management, expense tracking and revenue recognition. It also provides multi-entity support. This allows companies with multiple locations, subsidiaries or divisions to manage their finances seamlessly within a single platform. 

QuickBooks Overview 

QuickBooks, developed by Intuit, is an affordable option for entrepreneurs, freelancers and small business owners.  

QuickBooks integrates payment processing within the platform. This allows businesses to accept payments directly and manage cash flow more efficiently. It also syncs automatically with bank accounts, credit cards and other financial institutions, keeping financial data current. 

QuickBooks is a good option for small businesses with simple accounting needs. However, it lacks detailed financial reporting capabilities. Organizations may need to upgrade to a more robust system as they grow. 

Discover more about our Sage Intacct services

Sage Intacct vs. QuickBooks 

Sage Intacct and QuickBooks offer reliable accounting software for the mid-sized market and are relatively easy to use, even for non-accountants. 

However, they differ in several important areas.   

Key Features 

Both Sage Intacct and QuickBooks offer a range of features, but each excels in different areas. 

 Key points of comparison: 

Feature	Sage Intacct	QuickBooks
Financial reporting	Advanced, customizable	Basic, limited customization
Multi-entity support	Yes	No
Automation	Extensive	Limited
Basic accounting	Yes	Yes
Ease of use	Moderate complexity	Highly user-friendly
Revenue recognition	Advanced	Basic; available in one version
Customization	Highly customizable	Basic customization

 

• Financial reporting: Sage Intacct’s reporting capabilities are significantly more advanced than QuickBooks, allowing for multi-dimensional reporting across various business entities, locations and departments. 
• Multi-entity support: Sage Intacct excels at managing multiple entities, making it ideal for businesses with complex structures. QuickBooks does not offer multi-entity support, limiting its use to businesses with multiple locations or subsidiaries. 
• Basic accounting: Sage Intacct and QuickBooks both offer basic accounting capabilities. These include general ledger management, accounts payable/receivable and bank reconciliation. However, Sage Intacct provides more advanced and comprehensive financial management capabilities that are better suited for larger, growing or complex organizations. 
• Automation: Sage Intacct provides extensive automation options, reducing manual tasks and improving efficiency. QuickBooks offers basic automation features but does not match the level of automation available in Sage Intacct. 
• Ease of use: QuickBooks has a user-friendly interface and is easy to learn. Sage Intacct has a slightly steeper learning curve. However, it provides greater control over financial management. 
• Revenue recognition: Sage Intacct offers advanced revenue recognition features. These support complex, multi-element arrangements and compliance with ASC 606 and IFRS 15. QuickBooks provides basic revenue recognition with its Online Advanced version only. 
• Customization: Though QuickBooks offers basic solution customizations, Sage Intacct is the more customizable platform. With advanced customization options, Sage Intacct gives you the capabilities to implement and utilize a platform that fits your unique needs. 

Ability to Scale 

Sage Intacct’s cloud-based architecture enables organizations to easily add more users, entities and functionalities as their requirements evolve. Sage Intacct also provides advanced features and modules that cater to the specific needs of larger enterprises. These features are essential for organizations operating across multiple locations, managing complex projects or adhering to stringent accounting standards.  

QuickBooks offers some scalability. However, the number of users, transactions and advanced features it can support is limited. It may quickly become limiting as an organization expands and requires more robust financial management capabilities.  

Customization 

Customization allows businesses to tailor a solution to their specific needs and workflows. Both Sage Intacct and QuickBooks offer customization options. However, the extent and flexibility of these customizations differ significantly. 

Sage Intacct’s extensive customization capabilities make it an ideal choice for organizations with unique or complex requirements. Users can create custom fields, modify existing ones and design custom reports and dashboards. This allows them to gain insights tailored to their specific business metrics. 

QuickBooks offers more limited customization options. Users can customize invoices, forms and reports to a certain extent. However, its customization capabilities are not as extensive as those offered by Sage Intacct. This may be especially problematic for businesses with complex or industry-specific requirements – the manufacturing, construction or professional services sectors, for example.   

Integrations 

Both Sage Intacct and QuickBooks offer integration capabilities with third-party applications and software platforms. This allows businesses to streamline their operations and leverage additional functionalities.  

Sage Intacct’s open API architecture enables seamless integration with a wide range of business applications. These include Salesforce, ADP, Expensify and various e-commerce platforms. This keeps data synchronized and enables process automation across multiple systems.  

QuickBooks integrates with over 750 popular business applications and offers an API for custom integrations. However, compared to Sage Intacct’s open architecture, the process can be more complex and may require additional development resources. 

User Experience 

QuickBooks is well-known for its user-friendly interface. This makes it an attractive choice for small businesses and entrepreneurs who prioritize ease of use. QuickBooks’ intuitive navigation makes it accessible for those new to accounting software, reducing the learning curve. 

On the other hand, Sage Intacct requires somewhat more training to use effectively, although it is more straightforward than many other advanced ERPs. While the learning curve may be somewhat steeper, Sage Intacct’s interface provides a high degree of customization. This allows users to tailor the layout and dashboards according to their preferences and workflows. 

When to use Sage Intacct vs. QuickBooks 

QuickBooks provides an affordable, user-friendly solution for startups and small businesses with basic accounting requirements. However, as your organization grows in size, complexity and ambition, Sage Intacct may be the better option. This is especially the case for organizations with complex accounting needs, such as nonprofits. Nonprofits also benefit from BPM’s specialized nonprofit audit services alongside Sage Intacct implementation.

In our experience, organizations tend to switch from QuickBooks to Sage Intacct when they have too many manual processes and QuickBooks’ reporting becomes too limited. If your organization is experiencing rapid growth or has expansion plans, Sage Intacct offers superior scalability and customization options. 

Modernize your Operations with BPM and Sage Intacct 

For over 30 years, BPM has been a trusted advisor to businesses. Our seasoned professionals have a proven track record of successfully deploying Sage Intacct for businesses across a wide range of industries. We work closely with every client to tailor a Sage Intacct implementation that aligns with their existing systems and supports their plans. 

Leverage BPM’s knowledge and experience, coupled with the robust capabilities of Sage Intacct, to transform your financial operations. Contact us today to schedule a consultation and learn how Sage Intacct can transform your organization. 

Choosing the right accounting software is a game-changer for businesses. It’s not just about keeping the books balanced—it’s about unlocking your company’s full financial potential. The ideal software streamlines processes, providing clear insights into your financial health. This clarity empowers better decision-making, from day-to-day operations to long-term strategy. 

Efficient financial management isn’t just helpful—it’s essential for growth. The right accounting tool does more than crunch numbers; it becomes a strategic asset, helping you spot opportunities and navigate challenges with confidence.  

NetSuite and QuickBooks are two prominent accounting and business management software solutions. NetSuite is a comprehensive enterprise resource planning (ERP) system with a wide range of functionalities. QuickBooks is an accounting software tailored for small businesses.  

Let’s dive into a comparison of NetSuite vs QuickBooks to help you understand why NetSuite is the right platform to support your business. 

NetSuite overview 

NetSuite is a cloud-based ERP software suite developed by Oracle. It integrates key business functions like financial management, customer relationship management (CRM), e-commerce, and inventory management. This unified platform helps provide operational and financial transparency across the entire business. Say goodbye to desperate siloed systems and data.  This unique system architecture enhances productivity and improves financial accuracy. 

NetSuite’s ability to scale makes it suitable for small to large enterprises. It allows businesses to adapt quickly to evolving market conditions. With global reach and multi-currency support, it meets international standards and automates local tax and reporting compliance across many different countries 

NetSuite helps businesses expand and operate efficiently worldwide. Its cloud-based design ensures secure data access from anywhere, supporting remote work and collaboration. 

Find out more about NetSuite services

QuickBooks overview 

 QuickBooks is a widely used accounting software developed by Intuit. Its user-friendly interface and basic accounting features have made it popular among small businesses and self-employed professionals.  

Notable QuickBooks features include invoicing, expense tracking, payroll management, tax preparation and financial reporting. QuickBooks allows users to perform their accounting processes, look at cash flow and view fundamental financial reports. QuickBooks also offers bank and credit card integration. Two of the most popular QuickBooks products are QuickBooks Online and QuickBooks Enterprise. 

NetSuite vs QuickBooks 

NetSuite and QuickBooks are both accounting software solutions, but they cater to different business needs and offer distinct capabilities. While QuickBooks is utilized by small businesses who favor simplicity, NetSuite provides a more comprehensive, scalable, and feature-rich platform suitable for businesses of all sizes, from growing startups to large enterprises. 

5 Signs You’ve Outgrown QuickBooks

Most companies eventually outgrow QuickBooks. Here are the triggers indicating it’s time to evaluate NetSuite:

1. Month-End Close Takes 10+ Days

If closing books takes two weeks, QuickBooks’ manual processes are slowing you down. NetSuite automation typically reduces close time to 3-5 days.

2. Managing Multiple Entities

QuickBooks requires separate files for each entity with manual Excel consolidation. NetSuite handles multi-entity with automated eliminations.

3. Investors Demanding Better Reporting

Series B+ investors expect real-time dashboards and sophisticated analysis QuickBooks can’t provide.

4. Complex Revenue Recognition

SaaS companies with subscription billing or ASC 606 requirements exceed QuickBooks’ capabilities. NetSuite’s Advanced Revenue Management automates compliance.

5. Using 5+ Disconnected Tools

QuickBooks plus Salesforce, Bill.com, Expensify, and separate systems create data silos and manual reconciliation. NetSuite integrates everything.

Experiencing these signs? Learn about NetSuite implementation.

Key Features 

As popular accounting platforms, NetSuite and QuickBooks provide several useful features: 

Feature	NetSuite	QuickBooks
Revenue recognition	Advanced capabilities	Basic features
Billing	Robust billing management	Basic billing management
General ledger	Comprehensive options	Basic options
Accounts payable/receivable	Advanced features	Basic features
Fixed asset and lease management	Advanced, dedicated capabilities	Basic capabilities
Inventory management	Comprehensive capabilities	Limited capabilities
Reporting	Advanced, customizable options	Basic options
Artificial intelligence (AI)	Advanced capabilities	Limited capabilities
Ease of use	User-friendly	User-friendly
Pricing	Custom pricing model	Tiered pricing options
Customer support	Dedicated customer support	Limited customer support
Integration	Custom, native capabilities	Limited, pre-built capabilities
Scalability	Advanced adaptation	Limited adaptation

 

When comparing NetSuite and QuickBooks across various accounting functionalities, NetSuite stands out as the superior choice in nearly every aspect. 

Revenue Recognition 

NetSuite excels with its advanced revenue recognition capabilities. Companies with complex needs often combine NetSuite with outsourced accounting services for optimal results. Supporting compliance with complex accounting standards such as ASC 606 and IFRS 15. It effectively handles intricate revenue scenarios, making it ideal for businesses with sophisticated needs. In contrast, QuickBooks offers only basic revenue recognition features, suitable primarily for simpler business models. 

Billing 

NetSuite provides a comprehensive billing management system that includes recurring billing, usage-based billing, and advanced revenue management. QuickBooks, on the other hand, has basic invoicing and billing capabilities, lacking the advanced features found in NetSuite. 

General Ledger 

While both NetSuite and QuickBooks offer multi-currency and multi-company support, NetSuite’s general ledger is notably more advanced. It includes features such as automatic reversing entries, advanced allocations, and seamless integration with other modules, making it the superior option for complex accounting needs. 

Accounts Payable/Receivable 

Both platforms offer accounts payable and receivable functionalities, including vendor management, payment processing, and customer credit management. However, NetSuite surpasses QuickBooks with advanced features like automated billing schedules and integrated cash flow forecasting. 

Fixed Asset and Lease Management 

NetSuite stands out with dedicated modules for fixed asset management and lease accounting, allowing businesses to track, depreciate assets, manage leases, and comply with standards like ASC 842. QuickBooks provides only basic fixed asset management, lacking the depth and compliance features of NetSuite. 

Inventory Management 

NetSuite offers a robust inventory management system with multi-location tracking, lot and serial number tracking, and advanced costing methods. QuickBooks has inventory management features, but they are more limited compared to the comprehensive capabilities of NetSuite. 

Reporting 

Both platforms provide reporting capabilities, but NetSuite’s reporting is far more advanced. It features real-time dashboards, drill-down capabilities, and seamless integration with other modules, offering a wide range of pre-built reports and extensive custom reporting options.  

AI Capabilities 

NetSuite benefits from its affiliation with Oracle, leveraging cutting-edge AI technology, robust Oracle Cloud Infrastructure (OCI), and Oracle Autonomous Database. This integration provides you with access to advanced machine learning models and AI-driven insights. Here are some of the top AI capabilities you’ll have access to when leveraging NetSuite: 

1. NetSuite Analytics Warehouse: Uses AI to find patterns and trends in data, providing key insights and explanations that drive revenue and performance. 
2. Predictive Analytics: Forecasts future revenue and cash flow, helping businesses anticipate financial needs and performance. 
3. Intelligent Automation: Automates routine tasks and processes, including expense categorization, to improve efficiency and reduce manual work. 
4. Customer Insights and Personalization: Analyzes customer behavior to deliver tailored marketing strategies and product recommendations. 
5. Advanced Financial Reporting: Provides real-time dashboards with AI-driven insights and detailed drill-down analysis for better financial decision-making. 
6. Anomaly Detection: Identifies unusual patterns in transactions to prevent fraud and errors in financial data. 
7. Supply Chain Optimization: Uses AI to manage inventory, predict demand, and evaluate supplier performance for better procurement strategies. 
8. Sales and Marketing Automation: Scores and prioritizes sales leads and assesses marketing campaigns to improve effectiveness. 
9. Employee Productivity and Engagement: Analyzes employee performance and offers personalized training recommendations to boost productivity and retention. 
10. Data Integration and Management: Integrates data from various sources for unified insights and cleanses data to ensure accuracy. 

In contrast, QuickBooks’ AI capabilities are relatively basic. Intuit Assist, the AI-powered assistant for QuickBooks, provides features like cash flow predictions and expense categorization. However, it lacks the advanced predictive analytics and intelligent automation available in NetSuite, making it less suited for more complex business needs. 

Ease of Use 

NetSuite’s user interface is designed for ease of navigation with customizable dashboards and workspaces that cater to specific roles and preferences. Even with its advanced features, NetSuite offers a short learning curve, making it accessible even to new users. 

QuickBooks is known for its user-friendly interface, which is beneficial for smaller businesses. However, as businesses grow and require more advanced features, QuickBooks can become limiting, whereas NetSuite’s comprehensive interface scales seamlessly with business needs. 

Pricing Comparison 

NetSuite’s pricing model is designed to reflect its extensive features and scalability. The platform’s comprehensive capabilities and adaptability ensure that your business receives significant benefits providing a strong return on investment, supporting growth and evolving needs. 

QuickBooks provides tiered pricing plans to accommodate various business needs. Each plan is designed to offer different levels of functionality and support, allowing businesses to select the plan that best fits their current size and requirements. 

Customer Support 

NetSuite provides dedicated customer support with personalized guidance, training and troubleshooting to maximize the value of its software. This includes assistance with implementation and ongoing support from NetSuite consultants. 

QuickBooks offers more limited customer support, with varying levels of assistance depending on the plan. Basic support is included, but more specialized help may incur additional costs or require higher-tier plans. 

Integration and Scalability 

NetSuite excels in integration with its hundreds of pre-built connectors to best-in-class business applications, including CRM, marketing automation, POS systems and payment processing. It also offers open APIs for custom integrations, enhancing its flexibility. 

QuickBooks has some pre-built integrations, but custom integrations require APIs and developer resources. QuickBooks does provide integration through third-party tools but lacks the native integration capabilities of NetSuite. 

In terms of scalability, NetSuite’s unified cloud platform adapts seamlessly as your business expands, accommodating increased complexity. QuickBooks scales from its Online to Enterprise versions but lacks the comprehensive platform of NetSuite, requiring additional IT resources for customization and scaling. 

Switching from QuickBooks to NetSuite 

As businesses grow and their needs become more complex, QuickBooks’ limitations can become apparent. This is where NetSuite’s comprehensive suite of business management tools has the advantage. The cloud-based architecture and modular design allow you to easily add or remove functionalities as your business evolves. This means that you always have the right tools at your disposal.  

Making an accelerated switch to NetSuite 

If you’re considering switching from QuickBooks to NetSuite, BPM’s NetSuite Accelerator Program offers a comprehensive solution to help you navigate the transition smoothly. This program provides end-to-end support, from consultation to implementation, ensuring a seamless, accelerated migration to NetSuite. Here’s how the process works: 

1. Initial consultation and assessment: We begin by working closely with you to gain a full understanding of your business processes and to discuss your pain points. This comprehensive assessment allows us to provide an effective solution tailored to your specific needs, budget and timeline.
2. Evaluation and roadmap development: Next, our team evaluates your current processes and technology against industry best practices to identify areas for improvement. Based on this evaluation, we develop a tailored roadmap and game plan for moving your organization toward ERP modernization with NetSuite.
3. Phased implementation approach: Our NetSuite Accelerator Program uses a unique phased approach to implementation, which minimizes risk while accelerating time to value:

Phase I (Six Weeks):

NetSuite implementation and optimized future state roadmap  

• Configure NetSuite for your business segments, subsidiaries, departments, classes and locations 
• Automate accounting processes, including financial reporting, journal entry, bank account reconciliation, budgeting and forecasting, financial close and accounting period management 
• Set up accounts payable and receivable functionality 

Phase II (Months 2-5):

Operations management, business process optimization and third-party integrations  

• Add operations management functionality, including procurement, inventory management, order and warehouse management, eCommerce and payment processing 
• Implement recommendations from the optimized future state roadmap 
• Provide solutions architecture and integration support with outside vendors 
• Clean up historical data to an agreed-upon lookback period 

4. Ongoing training, support and project management: Throughout the entire process, BPM provides:

• Hands-on, progressive NetSuite training and support 
• Data conversion and migration services 
• Comprehensive project management 
• In-depth user acceptance testing and readiness assessments 

5. Continuous optimization: Our goal is to support you throughout your NetSuite journey as your business grows and transforms. Our team guides and supports necessary adjustments based on your evolving needs, ensuring that your NetSuite system continues to meet your business requirements.

By leveraging BPM’s NetSuite Accelerator Program, you can ensure a smooth transition from QuickBooks to NetSuite. This focused, phased approach not only minimizes risk but also accelerates your time to value. It reduces costs and implementation time compared to standard methods, allowing you to realize a faster return on investment while empowering your team to achieve quick wins. 

BPM’s NetSuite Consulting and Implementation Services 

BPM is a trusted partner for businesses seeking comprehensive solutions. We offer a wide range of services including assurance, tax, advisory, and more. Among our extensive offerings, we support our clients with NetSuite consulting and implementation services.  

Our team of certified NetSuite professionals have extensive experience helping clients achieve scalable results. If you have outgrown QuickBooks or another platform, we can help make the transition to NetSuite easy and efficient.  

We will work closely with you to understand your business processes, requirements, and goals. This will allow us to create a customized solution that aligns with your specific needs. We will help you select and implement the NetSuite services that will give you the best return on your investment. Our team will be by your side every step of the way.  

If you’ve outgrown your current accounting software, contact us today. Schedule a free consultation and learn how our NetSuite Implementation Services can drive your business forward. 

Download the e-book, “Maximizing your NetSuite Investment” for insights Implementation approaches and operational benefits for scaling companies.

Growth-stage SaaS companies face a unique challenge when it comes to financial reporting. Your investors don’t just want to see traditional GAAP financials. They expect you to track and report on specific metrics that demonstrate the health and scalability of your recurring revenue model. 

Understanding which metrics matter most and how to accurately track them can make the difference between securing your next funding round and watching competitors pull ahead. This article will cover the essential financial metrics investors scrutinize, why accurate tracking matters, and how the right accounting infrastructure supports your growth trajectory. 

Why Investors Focus on SaaS-Specific Metrics 

Traditional accounting metrics don’t tell the full story for subscription-based businesses. While profit and loss statements matter, investors need to understand how efficiently you acquire customers, how well you retain them, and whether your unit economics support sustainable growth.  

Investors use these metrics to evaluate whether your business can scale profitably. They want to see that you’re not just growing revenue but doing so in a capital-efficient way that demonstrates strong fundamentals. Without accurate tracking and reporting of key indicators, you’ll struggle to build investor confidence or benchmark your performance against industry standards. 

5 Key Metrics Investors Expect SaaS Companies to Track 

1. Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) 

MRR and ARR form the foundation of your financial reporting. These metrics show investors the predictable revenue stream your business generates each month and year. 

Calculate MRR by multiplying your total number of paying customers by the average amount each customer pays per month. Your ARR is simply your MRR multiplied by 12. Most investors expect you to break these numbers down further, showing new MRR from new customers, expansion MRR from upsells, and contraction MRR from downgrades or churn. 

Clean MRR reporting requires accurate subscription data. Your accounting system needs to properly categorize different types of recurring revenue and track changes over time. NetSuite and Sage Intacct both offer subscription management capabilities that help automate these calculations and ensure consistency in your reporting. 

2. Customer Acquisition Cost (CAC) and Payback Period 

CAC tells investors how much you spend to acquire each new customer. Calculate this by dividing your total sales and marketing expenses by the number of new customers acquired during that period. 

The CAC payback period shows how many months it takes to recover your acquisition costs. Investors typically want to see payback periods of 12 months or less for growth-stage companies. A shorter payback period means you can reinvest cash into growth more quickly. 

Your accounting system needs to properly allocate sales and marketing expenses and tie them to customer acquisition data. This often requires integration between your CRM, marketing automation platform, and financial systems to ensure accuracy. 

3. Customer Lifetime Value (LTV) 

LTV represents the total revenue you expect to generate from a customer over their entire relationship with your company. Investors compare LTV to CAC to evaluate whether your unit economics make sense.  

Calculate LTV by multiplying your average revenue per customer by the average customer lifetime, then subtracting the costs to support that customer. A healthy LTV to CAC ratio is typically 3:1 or higher, meaning you generate three dollars in lifetime value for every dollar spent on acquisition. 

Accurate LTV calculations require clean data on customer tenure, expansion revenue, and support costs. Your accounting platform should track these variables consistently and allow you to model different scenarios. 

4. Net Revenue Retention (NRR) 

NRR has become one of the most important metrics for growth-stage SaaS companies. This metric shows investors whether you’re growing revenue from your existing customer base through upsells and expansions. 

Calculate NRR by taking your starting MRR from existing customers, adding expansion revenue, subtracting churn and contraction, then dividing by your starting MRR. Investors look for NRR above 100%, which indicates you’re growing revenue even without adding new customers. 

Tracking NRR accurately requires your accounting system to distinguish between different types of revenue changes and attribute them to specific customer cohorts. This level of detail becomes increasingly important as you scale. 

5. Churn Rate 

Churn directly impacts your ability to grow. Investors want to see both logo churn (the percentage of customers who cancel) and revenue churn (the percentage of revenue lost from cancellations). 

Monthly churn rates above 2-3% raise red flags for most investors. If you’re losing customers or revenue faster than you can replace them, your growth trajectory becomes unsustainable. 

Your accounting system should automatically calculate both types of churn and allow you to analyze trends over time. You need visibility into which customer segments churn most frequently and what impact that has on your financial projections. 

Learn more about our Outsourced Accounting services

The Infrastructure Required for Accurate Metric Tracking 

Tracking these metrics manually becomes impossible as you scale. You need accounting software built for subscription businesses that can automate calculations, maintain data integrity, and produce investor-ready reports. 

Both NetSuite and Sage Intacct offer robust capabilities for SaaS companies. These platforms automate revenue recognition, track subscription metrics, and integrate with your other business systems to provide a single source of truth for your financial data. 

The right infrastructure eliminates spreadsheet errors, reduces month-end close time, and gives you real-time visibility into your metrics. This allows you to make faster decisions and respond to investor questions with confidence. 

Building Your Financial Foundation for Growth 

Accurate metric tracking isn’t just about satisfying investor requirements, it’s about running your business effectively. When you have reliable data on your unit economics, you can make smarter decisions about pricing, sales strategy, and resource allocation. 

As you move through different growth stages, investors will expect increasingly sophisticated reporting. Building the right accounting infrastructure now positions you for success as you scale. Don’t wait until your next fundraise to get your metrics in order. 

Work with a Firm that Understand SaaS  

At BPM, we work with growth-stage SaaS companies to build the financial infrastructure they need to scale. We understand the metrics investors care about because we help our clients prepare for funding rounds, acquisitions, and IPOs. Our team can help you implement the right accounting systems, establish proper controls, and create investor-ready financial reports.  

Whether you’re tracking these metrics for the first time or preparing for your Series B, we can help you build confidence in your numbers. To discuss how we can support your growth journey and ensure your financial reporting meets investor expectations, contact us.   

Winery owners constantly innovate to improve their cultivation and fermentation processes. What many don’t realize is that these daily activities may qualify for valuable Research and Development (R&D) tax credits. Despite the significant financial benefits available, most wineries leave this money on the table simply because they don’t know their work qualifies.  

This article will explore what makes your winery eligible, which activities qualify, and how recent tax law changes make these credits even more valuable. 

Understanding R&D Tax Credits for Wineries 

R&D tax credits allow businesses to claim a dollar-for-dollar reduction in their tax liability for qualified research and development expenditures. These credits represent a significant financial advantage. You can reduce your tax bill and generate cash back for reinvestment in your operation. 

Companies of all sizes qualify for the federal R&D tax credit. Additionally, 70% of states now offer their own research and development tax credits. According to industry research, while more than 14,000 U.S. companies claim federal R&D credits annually, less than 33% of companies that actually qualify apply for them.  

What Qualifies as Research and Development? 

The tax definition of qualified research extends beyond traditional laboratory work. Companies that develop new or improved products, processes, or software for its operations may be eligible for the R&D tax credit. 

Your research must meet a 4 part test criteria at a “business component” or project level: 

• Technological in Nature: 
  The work must rely on principles of physical sciences, biological sciences, engineering, or computer science. 
• Permitted Purpose: 
  The activity must aim to create or improve a product, process, technique, invention, formula, or software in terms of performance, reliability, quality, or functionality. 
• Elimination of Uncertainty: 
  The activity must attempt to resolve uncertainty about how to develop or improve the product or process (uncertainty about capability, method, or design). 
• Process of Experimentation: 
  The activity must involve a process of evaluating alternatives through modeling, simulation, systematic trial and error, or other testing methods. 

The good news? Your project doesn’t have to succeed to qualify for the credit. 

Qualifying Activities for Wineries 

Wineries conduct research and development in various ways. New manufacturing processes qualify. Improvements to wine quality and taste may qualify. Developing new or improved beverages can potentially qualify for the R&D tax credit. 

Vineyard Optimization 

Your vineyard work may qualify when you evaluate soil conditions, water availability, and ground slopes to optimize grape cultivation. Developing soil and rootstock improvement processes counts. So does designing trellis improvements and developing plant irrigation systems. 

Production and Bottling Improvements 

You may qualify when you develop new or improved bottling and packaging processes. Testing new or improved corks qualifies. Developing improvements to bottle labeling materials counts. Evaluating varied filtration methods to prevent microbial spoilage and increase wine quality qualifies. Testing products to ensure shelf life also makes the list. 

Enhancing Your Production Mix 

Many qualifying activities happen during production. Evaluating conditions like humidity, lighting, ventilation, temperature, and barrel fermentation for wine production may qualify if it meets the 4 part test. Developing flavor or aroma profiles, improved ingredient mixing methodologies, and product prototype batches all may potentially qualify. 

You can claim credits for developing new or improved quality assurance testing processes. Testing products to ensure consistency qualifies. So does developing new or improved preservative chemicals. 

Economic Efficiency Research 

Improvements to the economic efficiency of your fermentation process qualify. Experimenting with equipment to improve both efficiency and precision during fermentation counts. Developing improved grape strains qualifies. Testing product ingredient mixtures for desired flavor or aroma profiles also makes the cut. 

Learn more about R&D Tax Credits

Recent Tax Law Changes: The One Big Beautiful Bill Act 

The tax landscape for R&D credits recently improved significantly. The One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently restored immediate expensing for domestic research and experimental expenditures for tax years beginning after December 31, 2024. This reverses years of required capitalization and amortization that created cash flow challenges for innovative businesses. 

Small businesses with average annual gross receipts under $31 million can now amend prior year tax returns to expense domestic R&D costs retroactively back to 2022. This means you may be eligible for refunds on taxes you already paid. 

All taxpayers can elect to accelerate remaining unamortized domestic R&D expenses from 2022-2024, either in full in 2025 or split between 2025 and 2026. This creates immediate cash flow benefits for wineries that have been capitalizing these costs. 

The new law creates a clear incentive for domestic research. Foreign R&D expenses must still be amortized over 15 years, but domestic expenses can now be fully deducted in the year incurred. 

New Reporting Requirements 

Be aware that the IRS updated Form 6765 for 2025. Detailed project-level reporting is now mandatory for businesses with over $1.5 million in Qualified Research Expenses. You’ll need to track R&D projects and expenses more precisely than before. Higher audit risk exists if your documentation is incomplete or inconsistent. 

Work With BPM to Navigate R&D Tax Credits for Your Winery 

Navigating R&D tax credits requires specialized knowledge of IRS requirements and documentation standards. The recent changes under the One Big Beautiful Bill Act create new opportunities but also add complexity around elections, retroactive claims, and coordination with other tax provisions. 

BPM helps wineries identify qualifying activities, document research efforts properly, and maximize available credits while maintaining compliance with new reporting requirements. For a free assessment to determine your R&D tax credit eligibility and develop a strategy that puts cash back into your winery, contact us.