LIQUIDITY & FUNDRAISING: REVENUE REPORTING Under pressure: There is no shortage of companies that've failed to pass scrutiny in the run-up to an investment offer
HIDING IN PLAIN SIGHT Financial data and how it is presented can make or break a fund-raise. Mark Aubin, Aptitude’s VP of Solutions Consulting in North America, explains how its software solution can make life a lot less stressful for capital-seeking CFOs The spectacular corporate shambles and real-life consequences for employees and investors that can result from not having the right revenue recognition and reporting systems in place – informing strategy and telling an accurate story of business performance – prior to a major fund-raising event has been reflected in the headlines around many an initial public offering (IPO). At the eye of the storm is the chief financial officer (CFO) – a role that has morphed from passive reporting of historic financial positions and
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TheFintechMagazine | Issue 22
compliance to a figure with considerable influence at board level, vis-à-vis a company’s future potential and the investment needed to realise it, from angels, venture capitalists, existing shareholders or the markets. Financial transparency, specifically how accurate and retrievable the data is around revenue recognition and management, comes under intense scrutiny in the run-up to a fund raise and especially an IPO. And the CFO can find him or herself in an uncomfortable spotlight if that data is not squeaky-clean and presented honestly and accurately. “A CFO needs to ask ‘do I have the
necessary access to my data?’,” says Mark Aubin, VP of solutions consulting in North America for Aptitude, which specialises in accounting compliance and financial guidance tools for the CFO office. “When you become a public company, you are going to be scrutinised by your new investors, the regulator and analysts, as well as your own board and employees. “If a company isn’t prepared for its IPO and the regulator has questions about how it’s accounting for revenue, that could delay its access to sorely-needed capital. So, if it doesn’t have its revenue management processes, data, and reporting in place, the cost to that company could be substantial.” www.fintechf.com
