This blog will conclude my interview series with successful customers where we’ve been discussing some of the issues they had prior to Sage Intacct, and how our cloud ERP solved some of their pain points.
The final post in this customer interview series is with Len Weedman of Trian Fund Management. (If you missed my previous two customer interview posts please be sure to go back and check post one and two).
Len is one of the leaders among a new breed of controllers who have mastered the shift from the accounting system being a system of record to being a system of intelligence. Len has developed some of the most sophisticated dashboard accounting techniques that I have seen and we’ll be discussing those today.
Len not only knows about the investment world but he is a hands-on controller and one of the leaders among a new breed of controllers who have mastered the shift from the accounting system being a system of record to being a system of intelligence. Today we will be discussing the accounting dashboard philosophies and techniques Len uses to track investments:
- By year, entity, fund, partner, strategy, asset class with slice and dice analytics
- With full control of partial allocations
- With Instant multi-fund/entity consolidation
Ian Howells: Len, can you tell our audience a bit about Trian Fund Management and your role there?
Len Weedman: Trian Fund Management, L.P. (“Trian”) is a multi-billion dollar investment management firm with over 50 employees. Trian is a highly engaged shareowner, bringing a private equity mindset to the public markets.
As the Management Company Controller, my role covers all aspects of financial reporting of 50+ management company and general partners entities, as well as tax compliance for our funds and some HR responsibilities.
IH: The extensive use of multi-entity structures is a trend that we have seen not only being very prevalent but expanding in usage and complexity. Len can you explain to the audience how you use entities and how you model them?
LW: As previously mentioned, Trian has 50+ entities with multiple partners and various investment structures. We extensively use the multi- entity functionality, allocation module, and dimensions capability of Intacct to effectively map these structures and provide dashboard analytics capabilities.
IH: Trian is obviously a very sophisticated organization. At a high-level what are the key things that you look for from an accounting system?
LW: Traditionally accounting systems have been seen as a system of record or general ledger. I believe we are shifting to a much more data driven world of analytics were the GLplus is becoming central. I am always thinking about what dashboards I can develop to give better analytics to my CFO and partners:
- In a nutshell, I am always looking for:
- A simple and quick way to consolidate across entities
- A simple way to share the chart of accounts across entities
- Efficient data processing capabilities (e.g. importing and allocation abilities)
- A way to dice and slice the data without IT support or coding
All done at scale, in the cloud and in an auditable way.
IH: So now that you've used the system for some time, what are the big things you're able to do now that you were not able to do before?
LW: We have consistent chart of accounts across entities and when we add a new entity it gets the latest COA automatically. The major ability you get from consistent chart of accounts is continuous consolidation, we were able to literally reduce the time to get a consolidated view across entities for management from many hours to minutes.
Not only could we consolidate data in minutes, we could do it at any point in time when we needed. We have dramatically reduced the pain and time taken to close the books, and we can automatically do partial allocations across funds. We’ve also taken dashboards to a whole new level! It’s been fantastic!
IH: The most visible thing in modern financial systems is the dashboard. I was talking with another firm about what is most important in a modern cloud accounting system and they said, “Every accounting system can manage journal entries, etc. What I care about is when my CFO asks me for a dashboard in two hours, can it be done and can I do it myself without coding.”
This made me think of you, Len. And the sophistication of what you have built. Can you explain to the audience the key dashboards that you have built?
LW: If I start with the management company or operating company, you have the usual suspects: cash balance, cash over time, accounts payable balance, balance sheet, income statement both with variance analysis and drill down capabilities, etc.
But if you use your dimensions correctly, you can have revenue expanded by or filtered by structure, entity, or investment. Or specific expense line item reported by vendor name, it is good to know what your variance is but it’s better to know what is the underlying factor for that variance. What I try and do is accumulate the questions I always get from management and then build that report and add it to the dashboard.
Then you have the general partner investment entities where you inevitably get the question by a partner, “What is the value of my investment?” He is looking for one number which consists of 50+ entities. You need a report that is constantly consolidating 50+ entities.
If one of your dimensions is “partners name,” you can filter your reports by the partner name. Now you can create a dashboard report card of that partner’s investment and another dashboard of a report that shows that investment expanded by entity/investment and the components of that investment (contributions, distributions, carry, gains, etc).
Then you add filters, such as structure like hedge funds, private equity, etc. to that dashboard and now both you and the partner have the ability to slice and dice the data.
Using a cloud based system means all stakeholders can get the information they need from multiple locations at a time that suits them.
IH: Consolidation across entities is a key part of closing the books. Can you comment on the impact here?
LW: When we used Macola/Exact, reporting took 60 to 90 days to get what we needed to a partner. Now it takes 20 to 30 business days and this time is driven by the fact we have to wait for reporting from other entities who report on day 15.
We now consolidate monthly versus quarterly because it is so much simpler.
Closing the books to me is an official term that we accountants like to use to describe the month/quarter end process, but if you are making sure your entries are booked everyday (e.g. cash is reconciled, revenue and known expenses) you could argue that your books are closed every day. Allowing you to have continuous consolidated reports that are always live. This gives us much greater transparency on the business.
IH: Can you discuss the applications that you integrate into Sage Intacct?
LW: We use Sage Intacct as our multi-entity accounting system and have focused firstly on being a data-driven organization getting new levels of intelligence out of the data in real-time.
We have integrated the fixed asset module which helps track all our fixed assets within the system and processes the depreciation/amortization entries at a click of a button, instead of calculating it all in excel.
IH: Going forwards what are your plans on using Sage Intacct?
LW: As I said upfront we see Sage Intacct as a GLplus that we want to use to give us analytics on both GL and non-GL data. We want to take a big data approach using both internal and external data based on advanced usage of statistical accounts to report for example AUM or even calculate management fees…
Integrations are next and we are looking at automating our accounts payable.
IH: Thanks so much, Len, for this insight into how Trian successfully uses Sage Intacct!
If you want to learn more, Sage Intacct developed The Data Driven CFO whitepaper which can be found here: https://online.intacct.com/rs/473-QSL-641/images/wp_driving_performance_financial_services.pdf.
To listen to Ian's full interview with Len Weedman of Trian, click here: https://online.intacct.com/rs/473-QSL-641/images/Ondemand_Webinar_When_your_CFO_Asks_for_a_Dashboard.mp4.