Acquisitions offer big payback to a business, but they also pose complications to the finance function. Value can be delayed unless finance can rapidly integrate newly acquired entities. The team needs to account for new sets of numbers, and guard against disruptions in billing and other processes that can impact customer satisfaction.
That was the challenge facing i3 Verticals, a fast-growing integrated payments processor and software vendor, as it mapped out an acquisition-heavy growth strategy after its launch in 2012. The company’s previous financial management environment, including Microsoft Dynamics GP and QuickBooks, wasn’t suited for the complexity of acquisitions.
“Acquisitions are a big part of our DNA,” said Scott Meriwether, SVP, Finance at the Tennessee-based company. “Early on, we knew we’d be on an acquisitions spree in the coming years, so a scalable financial management platform that could quickly handle multi-entity consolidation was a top priority.”
Meriwether’s wish list also included strong revenue recognition and capabilities to support SEC reporting, all in a cloud-based platform. After evaluating Microsoft Dynamics and NetSuite, i3 Verticals selected Sage Intacct as its solution of choice, as outlined in our i3 Verticals customer success story.
Seamless Consolidations Across 25 Entities
The move has paid off. Since selecting Sage Intacct in 2014, i3 Verticals has executed 18 acquisitions, bringing the total number of acquisitions since its startup days to 21. It’s seamlessly handling consolidations across 25 entities, and can set up a new entity in Sage Intacct in a matter of minutes. And the finance team is ready for further acquisitions.
“We need to expect that pace to stay the same or increase as we go forward,” Meriwether said. “Sage Intacct has been extremely valuable in automating day-to-day financial management and letting us focus on the company’s strategic goals as we continue to acquire and grow.”
Moreover, i3 Verticals has gained the controls and financial transparency it needed for a successful IPO in June 2018, and to accelerate its rapid growth trajectory. Revenue has soared at a 67% compound annual growth rate since 2014, to $84.5 million in Q2 2018, while its volume of payments processed rose to $11.2 billion in the most recent 12-month period.
A Lean and Innovative Finance Team
And while i3 Verticals’ workforce has grown to nearly 350 employees, it’s added just a few new hires to the finance team, now totaling seven full-timers plus the CFO.
“We’re doing this with a pretty tight finance team and as a publicly traded growth company driven by the bottom line, that’s an incredibly important metric for us,” Meriwether said. “We don’t have to be fat in finance, and Sage Intacct has allowed us to be lean better than other systems.”
Automation and efficiency through Sage Intacct has enabled Meriwether’s small team to accelerate the monthly close by nearly 50%, while completing its first quarterly 10Q report to the SEC in a comfortable five days. That’s opened up new time to analyze financial results, identify areas for optimization, and innovate billing models across payments, subscription software, hardware, and professional services revenue streams.
"We didn't want the finance team's time wasted on doing manual consolidations,” Meriwether said. “We wanted them focused on analyzing results, and we’ve achieved that with Sage Intacct.”
To learn more about how i3 Verticals supports its growth strategy with Sage Intacct, read our customer success story.