In 2019, biotechnology companies raised 13.9 billion in VC-backed funding, and in the first quarter of 2020 alone, biotech companies raised a whopping $5.5 billion. During this same time frame, 66 biotechnology companies have successfully filed IPOs. In many cases, this transition from operating as a private company to operating as a public organization happens, quite literally, overnight.
There’s no doubt—it’s an exciting time to be a biotechnology company. However, for the accounting and finance departments at these organizations, this rapid growth often comes with challenges. These challenges range from standardizing the onboarding processes to magically establishing SOX compliance in a short period of time.
After learning about these challenges, we at Sikich began searching the NetSuite ecosystem to explore how public accounting teams were solving these problems. A common thread among NetSuite’s more prominent public clients was the use of the FloQast month-end tool to drive efficiency and better manage the month-end close process.
Using the FloQast Month-End Tool
FloQast’s ability to centralize all month-end close procedures and supporting documentation with its interactive workflow tool adds major value. This is a considerable upgrade to the Excel checklists, email threads, sticky notes, and status update meetings that make up many companies’ existing month-end close. Real-time preparer and reviewer signoffs, the ability to document review notes, and applicable supporting files or reports make it easy for “doers” and reviewers to have what they need when they need it.
When it comes to reconciliations, FloQast’s direct integration with NetSuite and native Excel automates TB tie-outs. The ability to set a material threshold and filter by unreconciled items allows the team to address where they should spend their time quickly. When it comes to being audit ready, their detective control enables process owners to set materiality thresholds. In addition, it immediately notifies team members when an account that previously tied out gets knocked out of balance because of an adjusting journal entry or change to the Excel reconciliation to prove timely review.
To take the automation FloQast provides to the next level, FloQast AutoRec helps automate the process of reconciling transactions for any two accounts. If the concept of NetSuite’s bank rec module is interesting to you, but you need that type of functionality for other account reconciliations (ex: intercompany, clearing, credit cards, prepaid, etc.), this could be an extremely valuable tool that includes a great audit trail.
Whether you’re a publicly traded biotechnology company, an organization planning to go public soon, or a privately held organization with funding and is experiencing rapid growth, having a well-documented month-end closing process and added layers of automation could be key to scaling effectively. Half the battle with adhering to something like SOX compliance is documenting the work you’re doing in a standardized way so you can easily prove it was done correctly and in a timely manner.
For More FloQast Info
For advice from Finance and Accounting professionals who have gone public, check out the following whitepapers: