Are You Ready for Action When Your CFO Clients Call? | AccountingWEB

Are You Ready for Action When Your CFO Clients Call?

An outsourced CFO called me the other day. He said he’d heard about how easy it was do to FAS 123R equity compensation accounting in Corporate Focus—and he was anxious to get started. His high-tech client was actually being sold or refinanced the following week, and he needed to provide updated financial statements in accordance with GAAP. Because the company had not been tracking its equity compensation expense over the past few years, this involved updating the compensation line items.

This tech company had originally been using its law firm—one of the top West Coast firms—to track its stockholder records. Later, when the stock option plan was created and the company still had fewer than 50 employees, the law firm continued to track the option grants, vesting schedules and employee terminations using Corporate Focus, based on information provided by the company or based on the board minutes prepared by the law firm.

At first, I happily told the CFO that accomplishing his goal was simple—he could just log into Corporate Focus and update the valuation and amortization variables that had not been tracked by the law firm, such as volatility, interest rate, and forfeiture rate. Once the variables were updated for each batch of option grants, he could then calculate how much equity-related expense needed to be included in the income statement for each annual reporting period, because the financial statements were being recreated anyway.

However, when I looked up the law firm in our tech support system, two things became apparent: a) they were an older customer and had not yet transitioned to our hosted platform for Corporate Focus; and b) they hadn’t updated their software in over a year and were about three releases behind. Without the latest updates, the equity accounting calculations would not be the most current, meaning that the CFO would not be able to take advantage of the system’s robust equity accounting features.

When I explained this to the CFO, there was an uncomfortable lull in our conversation. He was shocked and frustrated to discover that his client’s law firm was so many versions behind in Corporate Focus—and that they would not be able to schedule an upgrade on their internal systems for at least a week. Because the transaction had to be completed in the next seven days, there was just no time to spare.

At that point, the CFO’s only option was to have the firm's paralegal provide their client’s information in the form of Excel spreadsheets. He would then have to manually move the data over to internal spreadsheets which he used for their other clients. Lastly, he would have to wade through the tedious process of determining the valuation for each grant and then the amount to expense for each reporting period.

Unfortunately for the CFO and his client, walking through the necessary calculations would take about 30 hours of work over the next seven days—instead of just a few hours if he could have used Corporate Focus to do them. The end result was a huge waste of time, not to mention the additional legal fees related to sending all of the data to the outsourced CFO—and then of course the additional accounting fees to do the actual work. In 20/20 hindsight, this all could have been easily avoided had the law firm kept its software up-to-date or if the firm had been using Two Step's hosted platform. In either case, the client’s CFO would have been able to log in and execute his FAS 123R calculations in no time at all.

Law firms can easily avoid finding themselves in this undesirable situation if they regularly upgrade their systems or move to their software provider's hosted platform, which is always on the latest release.

Will your firm be ready the next time a client calls with a request? If you’re unsure of the answer, you need to check out Corporate Hygiene: It's Like Brushing Your Teeth, But With a Different Kind of Payoff. This real-life story is a superb illustration of how intelligently managing your client data can go a long way in making a positive and lasting impression—with existing clients, potential clients and others who really matter.

This blog

by Gary Levine - Gary Levine is the CEO and Founder of Two Step Software which provides market leading solutions for stock plan administration and corporate governance. His perspective is based on 20 years of experience.


More from this blog

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.


Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.


Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.


Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".


William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.


Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (, a software development firm of high-volume, high-productivity accounting and payroll technology.


Eva Rosenberg, MBA, EA, is the publisher of, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.


Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website:
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.


The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.


FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.


Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.


Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of a website devoted to training for governmental auditors.


AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too! Members of our British team who publish share their ideas, insights, and perspectives from across the pond.