The Automated Advantage: Transforming IPO Readiness with Technology

About the Author: Katie Thomas, CPA, is a content creator, 2021 & 2022 40 under 40 CPA Practice Advisor recipient, Top 50 Women in Accounting recipient, and the owner of Leaders Online, where they help accounting professionals increase their impact, influence, and income through thought leadership and digital marketing. Feel free to visit Leaders Online or connect with her on LinkedIn to get in touch with Katie.

Investor demand plummeted in 2022 to be the slowest in a decade, but in July 2023, it started to thaw a bit. Industry insiders expect:

• Tech IPOs to increase in 2024
• Fashion IPOs to increase
• Overall IPO market to jump in 2024

Economic indicators also point to recovery (we’ll see, but it looks promising), such as:

• Inflation easing to 3.1%
• Unemployment falling to 3.7%
• 199,000 jobs added in November

The M&A market is also heating up, but you’ll find plenty of industries where investment thresholds vary. As the economic recovery keeps inching forward, it’s crucial that business leaders and CFOs be ready to strike at just the right time.

Market volatility is possible, as the economy will likely have ups and downs before stabilizing. Businesses must be agile to get through this period and take advantage of it. IPO readiness is possible, but you need to prepare now.

How CFOs and Business Leaders Can Leverage Technology to Prepare for the Market Shift

CFOs and business leaders must be ready to strike when the market shifts. The question is: are you ready? If you hesitated at all when answering that question, likely, you’re not confident in your IPO readiness. You can and should:

• Maximize performance
• Minimize workload

Accounting and finance functions are crucial to your organizational performance and increasing enterprise value is possible by leveraging things like workflow automation, reporting, and audit readiness.

Your team needs to deliver on your strategic initiatives, and if they’re bogged down by project management and daily tasks, it’s going to be an uphill battle. Manual and outdated processes are impacting accounting and finance teams, and then there’s the talent shortage, too.

So, what can you do?

Leverage Technology to Become More Efficient and Help Ease the Talent Burden

In FloQast’s TakeControl 2023 poll, 44% of respondents plan to address the ongoing accounting talent shortage with technology and automation. Technology solutions improve workflow and free team members up from:

• Low-level, mundane tasks
• Repetitive tasks

Companies are facing challenges that can impact their IPO readiness. According to FloQast’s TakeControl poll, Nearly one-in-four businesses are struggling to recruit knowledgeable staff members. Another 45% of companies are unable to keep retention rates high, scale their operations, and recruit new employees.

Strategic IPO processes require competent staff who can keep operations running smoothly while you focus on financial analysis and investor relations.

And even if you’re short on staff, you can still free up time by leveraging automation. For example, FloQast is built around automating time-consuming tasks and can do things like cut close time from 25 days down to just 10.

Freeing up 15 days of work is huge at any time, but it’s especially crucial when you’re focusing on IPO readiness and need to make sure that you’re spending time on investor relations while also keeping operations running smoothly the entire time.

If the business falters at this time, you can negatively increase your IPO price and the ability to attract investors. You also want to look toward manual reporting and compliance because they’re also major time sinks.

Reduce Reliance on Manual Finance Report and Compliance

When the market shifts, companies and CFOs must be ready to pounce. But, achieving this level of agility can be challenging. Maintaining and supporting it can be just as difficult, especially if you’re still relying on manual finance reports and compliance.

Workflow automation can help. By streamlining your workflow, you can maximize your performance while minimizing your workload and project and compliance management. 

Workflow automation can be applied to:

• Financial close
• Audit readiness
• Reporting
• More

Supercharging your workflow with automation frees up time so that they can focus on strategic initiatives and not be bogged down by routine tasks and project management.

If you’re unsure of what tasks can be automated, sit down with key stakeholders and team members to consider the day-to-day tasks that are performed. List out these tasks by priority and the amount of time they take to complete.

Manual tasks may not be able to be automated, but if they can, you want to try to automate the workflow.

Once you’ve done this step, you need to change your focus to audit readiness because you will be under greater scrutiny before, during, and after the IPO.

Strengthen Your Audit Readiness With Automation and Technology

If you want to pursue an IPO, then you must file your audited financial statements with the SEC. Strengthening your audit readiness will make this process smoother and less stressful. 

Yet far too many accounting and finance departments are still reliant on manual methods, which are vulnerable to human error and consume a great deal of time.

Tech and automation can help by:

• Streamlining operations
• Facilitating better audit trails
• Ensuring regulatory compliance

Along with saving time and ensuring compliance, tech and automation can help you maintain robust auditing processes and internal controls.

The stringent audit and compliance demands of the IPO process leave no room for error. Finance and accounting departments are already stretched too thin, which makes manual processes even more problematic.

Among the respondents in the TakeControl 2023 poll:

• 24% reported that having the bandwidth to optimize their compliance program was a top challenge
• 22% said they struggled with designing effective controls compliant with regulations

Technology and automation help solve both of these problems. 

Wrapping Up Your IPO Readiness

Technology and automation can and should play a big role in helping you achieve IPO readiness. Manual processes are simply too time-consuming, and the risk of human error is too high to ignore. 

Streamlining and automating routine financial tasks will free up valuable time that your team can use to focus on more strategic aspects of the IPO, like:

• Financial planning
• Growing the business
• Investor communication

By allocating your resources more efficiently, your finance team will have the time and energy to take on a heavier workload during the IPO process.

It’s natural to be apprehensive about adopting and leveraging technology, but getting these solutions today doesn’t have to be a big lift. Focus on adopting modern technologies that are easy to use and integrate into your current workflow. Making the effort to leverage these solutions will help ensure your IPO readiness without burning out your finance team or compromising on quality.