SaaS Brief

Investment Firm Overcomes Challenge of Shared Expense Allocations, Boosts Finance Efficiency 10x

Investment firms have better things to do than to manually allocate shared expenses across multiple businesses and entities.

“So do companies in just about any industry,” says Isaac Strulowitz, the CFO of investment firm CoVenture, which eliminated the time and pain of spreadsheet-based expense allocations using Sage Intacct.

“It’s a problem that’s not only specific to multi-asset managers,” said Strulowitz, who joined the New York City-based firm in 2018. “But also any company that has multiple business lines with shared expenses could think about how to do it at the click of a button based on customized allocation rules.”

As outlined in our CoVenture success story, the firm did hours of painstaking Excel work each month to allocate employee time, rent, and other expenses across its three lines of business — alternative direct credit, venture capital, and cryptocurrencies — and about more than two dozen associated entities for its management companies. Then it had to get that data into separate instances of QuickBooks.

“If you are managing hundreds of transactions a month, there is just no way to feasibly journalize all of the activity in a painless manner,” Strulowitz said.

Drastically Cutting the Close Process from 60 Hours to Six

On top of the allocations issue, QuickBooks’ lack of multi-entity capabilities meant that CoVenture users had to constantly log in and log out to manage financials across entities. Intercompany journal entries entailed even more time-consuming and manual work.

“It was just a really tedious and cumbersome process,” said Strulowitz. “We quickly realized we needed a new and better solution.”

Now with 40 to 50 expense allocation rules set up in Sage Intacct, CoVenture has automated expense allocations among its management entities and business lines that were virtually impossible to do at scale with QuickBooks and Excel.

And CoVenture has dramatically streamlined processes around multi-entity financial management, intercompany journal entries, and booking revenue. The result is a 10x efficiency gain: Closing the books each month now takes just five or six hours, compared to 50 or 60 hours with QuickBooks and Excel.

“Sage Intacct has been a huge value to us. We close our books much more efficiently allowing us to make better decisions,” Strulowitz said. “I can focus my time on growing CoVenture, not worrying inefficiencies slowing us down.”

Deeper Financial Insights and Smarter Decisions

The time savings has opened new opportunities for CoVenture to use Sage Intacct to track key metrics such as liquidity and expense ratios, cash flows, and growth. Because Strulowitz is no longer bogged down in the complexity of a manual close, he’s spending more time trying to invest the firm’s own capital into value creating opportunities.

"Sage Intacct is allowing us to look at information more clearly, more cleanly, and more efficiently than we could previously,” Strulowitz said. “The information is much more timely now, and that allows us to capture deeper and more meaningful insights.”

CoVenture selected Sage Intacct over Oracle NetSuite and two solutions tailored for the investment industry, FundCount and FIS Investran. Sage Intacct was recommended by a CoVenture portfolio company and Sage Intacct customer, and went live in January 2019 with implementation by CLA (CliftonLarsonAllen), a large audit, tax, and consulting firm and Sage Intacct partner.

“When I saw the Sage Intacct demo I said, 'I'm in,’" Strulowitz said. “Almost immediately, the demo made clear that Sage Intacct would solve a lot of our business pain points."

View our CoVenture customer success story to learn more about how CoVenture has transformed its accounting and finance function with Sage Intacct.

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