Should accountants be worried about the bot bookkeeping invasion?

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In our view the accounting industry will soon see a wave of automation that will materially change how their services will be provided. There are a number of software companies attempting to automate the full accounting cycle and they are rapidly improving in quality.  However, we do not yet see the wholly automated full cycle accounting software in the marketplace.

In our most recent review of accounting software companies, those in the  “automated” accounting services space tend to cater to small businesses and startups and are capable of automating bill paying, expense reporting, payroll and basic account reconciliation.  We currently see the emphasis on automating data collection and input into accounting software such as QuickBooks, Indinero or Xero.  However, many of these “bot” bookkeeping firms are actually fronts for lower cost per hour manual bookkeeping services with a fancy dashboard.    Some are truly attempting to provide Artificial Intelligence (“AI”) to the accounting cycle.   Examples would be Botkeeper and Gappify.

Most senior accountants are safe from the bots as the automation of complex financial statement or tax/audit preparation still takes human oversight.  

In summary, automation of manual accounting processes is becoming more effective. Accountants should take advantage of the automated accounting tools where ever possible.

The bots are not ready to take over…yet.

If you’d like a copy of our survey of this space, please contact us.

How to Give Employee Feedback that Works

Whether from bosses, spouses or friends, it’s not easy to hear about our shortcomings. And letting others know how they can do better is almost as uncomfortable. Employee feedback can stir up all kinds of self-doubt, defensiveness and career worries – and if handled poorly, it can go radioactive.

But I think about feedback differently. For me, it isn’t about pointing out others’ weaknesses; on the contrary, it’s about helping them eliminate stumbling blocks in order to build on their strengths. And it's essential. Operating without feedback is like driving a car with no speedometer, learning to cook without ever tasting your food, or playing basketball without a scoreboard.

Here are a few guidelines for Human Resources professionals and managers who need to effectively communicate with employees:

  1. Don’t wing it. The words you choose will matter.

    Practice what you’re going to say and how you plan to say it -- and even consider rehearsing with a trusted partner. Your attitude, the accuracy of what you say, and the care with which you say it may matter as much as the specifics.

  2. Lean positive. Every time you offer feedback, some (if not most) of it should be positive.

    Look for opportunities to praise successes even as you offer suggestions for improvement. Celebrating performance has a salutary effect on everyone and is much more powerful than disciplining shortcomings. Dispensing encouragement is infectious.

  3. Be specific.

    There’s no point in telling someone they need to be “more punctual” or “more diplomatic.” Give examples and specific suggestions for improvement. Replace “you need to be more punctual” with “let’s keep track of what time we start our weekly staff meetings in the coming month and then talk about how it went.”

  4. Don’t limit it to a big annual event.

    Encourage regular and informal assessment. Don’t limit feedback to annual performance reviews where you bring people into a conference room. Instead, make a deal with your team to offer (and accept) real-time tweaks to enhance performance. Indeed, the best opportunities for this are when you “catch people in the moment” -- when you can point out a missed cue or a better way a situation could have been handled. Make talking about “how we’re doing” regular and easy.

  5. Keep it cool. Don't use "high velocity" language.

    Labeling someone “lazy" or “inept" will invariably come back to bite you. And never shout, stand or be animated. People will recall how they felt, not what you said; so reduce the drama.

  6. Don’t deluge. People can only process so many suggestions at once.

    If you have more than three items for someone to address, group them under a general heading, like goal-setting, cooperation, or communication and offer an example of each with a specific suggestion for improvement.

  7. If it’s serious, say so.

    Occasionally, you may need to let someone know that unless they make specific changes, their job may be in jeopardy. If so, be direct. Let them know if something is getting in the way of their professional development, and that it could lead to dismissal if unaddressed. If this feedback is offered encouragingly – along with a plan to follow up – it can light fires that lead to improvement.

  8. Follow up. By noting improvements on the spot, you'll reinforce that you're paying attention.

    Check in soon about the plan you made together, and as you notice efforts to improve, point them out.

  9. Think of feedback as a gift.

    There are "no percentages" in giving a peer or organizational superior feedback about things to work on. In other words, there’s plenty of risk and no direct reward -- it’s safer to do nothing. So if a subordinate has the courage to offer you that kind of input, thank them and make a special effort to reward their risk-taking.

  10. It stays confidential. Feedback sessions are private.

    Don't ever share the conversation with someone else. In giving feedback, you're seeking to help the person and the organization. Nothing good will come from sharing one person's issues with another.

So In Summary:

  1. The aim is to build a culture where people feel confident about sharing feedback without the fear that it will be taken personally.

  2. Honest, thoughtful feedback is an important and valuable tool for building a good team and a good business.

  3. With better feedback yields more trust, more team bonding, and more progress.

Want a more detailed guidance to help you navigate the complex process of giving employees feedback either as a Human Resources professional or as a manager communicating with your employees?

Contact us

By Rocky Francis

Head of Human Resources

What is Fund Administration and how Greenough fits the bill

Over the past 20 years, Greenough Consulting Group (GCG) has provided back-end financial and administrative services to more than 200 Venture Capital and Alternative Investment Funds.  We currently serve over 50 Venture Fund and Alternative Investment Funds.  Our Fund clients range in size from $5 million to almost $1 billion under management.

In all our engagements, we provide out-sourced accounting, reporting, audit management and tax compliance support.  We also assist General Partners (GPs) in interpreting their Limited Partnership Agreements (LPAs) and in setting up accounting and control policies and procedures.  Our client team for each of our engagements consists of CFO level input and oversight, and a combination of Controller and Accounting Manager support, as appropriate.  This outsourced team usually does the monthly/quarterly fund accounting work including:

  • Reviewing investment documentation and recording portfolio investment entries

  • Reviewing and recording investment security conversions on follow-on financings

  • Reviewing portfolio company sale/merger transactions to properly record realized gains and losses

  • Recording fund management expenses, reconciling bank accounts and handling General Partner and Management company accounting

  • Calculating the allocation of realized and unrealized gains and losses to the Fund partners

From this work, we produce the quarterly and annual financial reports that are reviewed by each Fund’s GP.   These quarterly and annual financial reports form a key element in the GP’s reporting obligations to each Fund’s Limited Partners (LPs).

In the typical engagement, the General Partner is responsible for monitoring and contacting portfolio company management to obtain investment documentation, financial statements, capitalization tables and performance metrics.  Based on the typical LPA and customary accounting and auditing practice, the GP is ultimately responsible for providing a Fair Market Value estimate for each of the investments in the Fund’s portfolio at the reporting date. Smaller Fund clients typically lack the staff to timely analyze this portfolio company information. We can and do provide the necessary assistance to the GP to develop quarterly and annual portfolio company valuations.  Our larger Fund clients may have dedicated in-house analytical capabilities, and, in these cases, we provide useful, independent third-party review.  In either instance, the GP has the ultimate responsibility for these valuation decisions.

The annual Fund Audit produces financial statements with an accompanying opinion by the Audit firm that the financial statements present fairly, in all material respects, the financial position of the Fund as of the reporting date and the results of its operations, changes in partners’ capital and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States (GAAP). Our role in this process is to provide the Auditor with the unaudited financial information required to perform the audit, answer questions and, in general, manage the audit relationship so that the General Partner can concentrate on the Fund value creation process.  Likewise, we support the tax compliance process that produces the Fund’s annual tax return filings and K-1’s for its LPs.

We trust that the above summary of our Venture Fund consulting practice provides the reader with some useful insights into the range of experience and capabilities GCG has and the respective roles and responsibilities that are necessary to provide accurate and compliant Fund accounting and reporting.

Contact us if you would like a consult


Ed Canty

Consulting CFO—Greenough Consulting Group

Important 2018 Tax deadlines for startups

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It’s that pesky time of the year again where we start thinking about tax compliance. Whether your business made any money or not, you must comply with filing requirements set forth by the IRS. Here are a handful of key dates to remember. If you have any questions about any of these filings reach out to

Federal filing deadlines

· Jan 31:1099-MISC– forms are due to all your contractors. W2s are sent to employees.

· Jan 31: Form 941– Q4`17 Quarterly payroll reports. Include R&D Credit from Form 8974

· Jan 31: Form 8974 – Claim your R&D tax credits from prior year.

· Jan 31: Form 940– Annual payroll report

· Mar 15: Form 1065 – LLC or Partnership tax returns due. Can be extended to Sep 15.

· Apr 17: Form 1120 – C-Corp Tax returns due. Can be extended to Oct 15.

· Apr 17: Form 6765 – R&D Tax Credit for FY`17 due.

· Apr 30: Form 941– Q1`17 Quarterly payroll reports. Include R&D Credit from Form 8974!

· Apr 30: Form 8974 – Claim your R&D tax credits from prior year.

· Jul 31: Form 941 – Q2`17 Quarterly payroll reports. Include R&D Credit from Form 8974!

· Jul 31: Form 8974 – Claim your R&D tax credits from prior year.

· Oct 31: Form 941– Q3`17 Quarterly payroll reports. Include R&D Credit from Form 8974!

· Oct 31: Form 8974 – Claim your R&D tax credits from prior year.

Delaware filing deadlines

· Mar 1 – Delaware Franchise Tax reports are due.

California filing deadlines

· Mar 15: Form 565/568 – LLC/Partnership Tax returns due. Can be extended to Sep 15.

· Apr 17: Form 100 – C-Corp Tax returns due. Can be extended to Oct 15.

· Apr 17: CA Franchise tax Due (Typically $800)

· May 7: 571-L – Property Tax form due with your local County. (Link not provided as each county varies)

· Month of Company Incorporation: SI-550– Statement of Information due to the CA Secretary of State. $25 if filed on time, $250 if filed late. 

San Francisco City filing deadlines

· Feb 28: San Francisco Gross Receipts and Payroll Expense Due

Year-End Housekeeping

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Making HR audits meaningful

The end of the year is a good time to reflect on what went well this past year and what may need to be revisited. There are many different reasons to assess your HR practices and conduct an audit. Whether you are part of a growing start-up, a company that has reached the milestone of 50 employees, or an established organization looking to ensure HR is strategically aligned to goals, an HR audit will help you determine compliance and the overall efficiency of the human resource function.

When conducting an assessment, there are several key areas you will want to take a look at:

·         Legal compliance

·         Employment practices

·         Performance management

·         Compensation and benefits

·         Payroll

·         Termination

·         Record keeping

When identifying gaps, it is also very important to look at how your company — or whether your company — is actually upholding its own policies and procedures. Checking a box on an audit list is not enough; you will also need to examine if you are walking your talk. A true assessment will include a reality check on just how things are done. Look hard and look deep to ensure you are working smartly.

Once the assessment is papered, you will need to prioritize action items. Correcting compliance matters should top your list, as violations can be costly. Next, target any inadequacies in each area, and decide strategically what requires attention and when. It’s OK to pick the low-hanging fruit first, but then prioritize based on company goals and budget. Implementing best practices wraps it up.

The decision to complete an HR audit should not be taken lightly. You will need to determine who will complete the assessment internally or if an outsourced solution makes sense. Set a timeline and goals you want to achieve for your end result. And most importantly, act on your findings. An audit does no good if it just sits there.

For an audit template or assistance with your internal audit, e-mail me.

Leann Proud

HR Consultant and Practice Manager

California Health Care — What’s Next?

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With a potential dismantling of the Affordable Care Act still looming, California is taking steps to ensure no one is left behind when it comes to health care. It comes with a big sticker price, though: $4 billion, half of which would come from re-purposing existing federal, state and local funds, and the other $2 billion from new taxes.

SB 562 Healthy California, a proposal for a single-payer health-care plan, was passed in June by the California Senate. The state Assembly still needs to approve the plan, as does the governor. A budget will need to be developed and a board of nine health-care experts will need to be in place for authority and oversight. Ultimately, this will not become operative until the state has the revenue to fund the costs for implementation. 

The proposal is radical and will change the environment for California’s health care — covering every resident, regardless of immigration status — with enrolled participants not having to pay premiums, co-pays or deductibles. With this big of a change, it is uncertain how it will be implemented and maintained. For now, we have a fully operational marketplace, CoveredCA, which allows residents to obtain quotes and compare health-insurance plans online. Although ACA subsidies may go away, CoveredCA is still accessible for those needing individual health care coverage.

A step in the right direction? Some say so. At least we are taking action rather than sitting on the sidelines. You gotta love California!

If you have questions about how to ensure you are on top of employee benefits,  e-mail me.

Leann Proud

HR Consultant and Practice Manager

Documenting Performance Matters: Best Practices

I recently attended a labor law conference by Ogletree Deakins, one of the largest labor and employment law firms in the country and recently named Law Firm of the Year by U.S. News & World Report.  I like attending this particular conference, because it’s four days of nonstop education conducted by attorneys who are experts in their field.  I came across the following Ogletree guidelines (edited) for personnel documentation while I was flipping through the conference materials:

1.      Prepare for the appraisal or disciplinary meeting.  Create a script for the meeting that is reasonable, with objective goals for the session.  If the meeting is an evaluation of performance, include objectives for the performance period, and fully discuss them with the employee.  If the meeting is disciplinary, outline points that explain the problem being addressed, as well as objectives for correcting or resolving the issue for the future.  The script may also assist you later, if you are asked to recall the substance of your discussion with the employee.

2.      Choose an appropriate setting for the meeting: For either performance appraisals or disciplinary meetings, neutral territory is best.  Although managers normally feel more comfortable in their own offices, such territory may send the wrong message and create an adversarial situation that fuels tension while undermining any positive message that might be attempted.

3.      Deliver the message clearly, and document fully — use simple language.  Whether the message is one informing the employee of poor performance or imposing discipline, the information must be clearly understood to have the maximum impact.  By minimizing poor performance or actions that warrant discipline, managers expose the company to liability.  Be sure the primary points are communicated well and documented completely.

4.      Follow up.  An important aspect of both the appraisal process and the disciplinary process is following up to ensure the objectives set forth in the initial meeting have been met, and the appropriate change in performance or behavior has happened.  As in the initial meeting, careful planning, supportive goal-setting and clear communication are critical — and documentation is key.

I wholeheartedly agree with these guidelines.  Another documentation trick I like is to e-mail the individual after the meeting to recap the conversation, with a few bullet points from the discussion.  This will also establish expectations.  The e-mail is date- and time-stamped, which can become very handy if further action is needed later. 

As with everything in HR, consistency is key — applying these tips and best practices can help keep you out of court.

For advice on personnel documentation, e-mail me.

HR Consultant and Practice Manager

SaaS Revenue Recognition Updates

SaaS Impacts of ASC 606 / IFRS 15

In the six months since the release of the new revenue recognition standards, companies have had a bit of time to digest and wonder – what does this mean for my company? 


 ASC Topic 606 or IFRS 15 aims to clarify the standards around revenue recognition and cost guidance.  It is a major change, and non-public entities are required to apply the revenue recognition standard for annual reporting periods starting in fiscal years beginning after 12/15/18.


The general idea of the new code is to identify performance obligations and allocate revenue by transactions as they are fulfilled.  Sounds simple, right? 

Key aspects to be aware of include: 

•         Setup Fees – will they be recognized proportionate to the revenue recognized under the contract rather than over the customer life. This will typically speed up revenue recognition for SaaS companies.

•         Licenses – A company must decide whether it is providing a software license as a separate performance obligation, distinct from the hosting services, or a service wherein the license and hosting services together constitute a single performance obligation. 

•         Implementation – Whether the implementation services should be treated as a separate performance obligation. 

•         Premium Support or Consulting – whether both the premium support and consulting services are distinct from the other performance obligations.

•         Other Capitalized Expenses – including direct labor and materials, bid costs, sales commissions and more. 

Entities may choose one of two adoption methods: full or modified retrospective. We are advising our clients to perform a preliminary analysis of the financial impact of the changes prescribed by the news standard and to use the analysis to determine the most appropriate adoption method.  In brief, you may restate earnings for comparative periods, or adjust retained earnings and disclose the change in policy.  We plan to describe how the efficiently perform the analysis at a later time.

Our recommendation is to avoid overreaction but be prepared.  It’s good to have a conversation now with your finance team to prepare.


 Need help starting this conversation CONTACT US to get details on how to be prepared for the second half of this year!


Some good resources for further reading:




SaaS-Specific Information