A turnkey outsourced accounting solution for a receivables portfolio
CASE STUDY |
A new joint venture between a public company and two private equity funds formed to acquire a finance receivables portfolio consisting of approximately 420,000 consumer loans. The loans included closed-end installment and revolving loans, impaired and unimpaired loans, and loans involving troubled debt restructurings. The combination of public and private equity entities presented unique and demanding accounting challenges.
The joint venture sought a turnkey outsourced accounting solution provider that could:
- Meet the Sarbanes-Oxley and other internal control demands of the auditors for both the public and two private equity entities
- Deliver a purchase price allocation for the initial receivables portfolio acquisition
- Provide quarterly calculations of fair value
- Deliver timely, combined monthly reporting in the three separate accounting methods required by the three joint venture partners
- Provide monthly taxable income projections for one of the private equity partners
- Provide timely access to answers on accounting, valuation, tax and other issues as needed
Establish and maintain a cloud-based technical infrastructure that could deliver all these features by allowing secure, virtual collaboration among RSM and all three joint venture entities
After meeting with the joint venture to understand its goals, needs, reporting requirements and existing IT systems and capabilities, RSM recognized a successful solution would draw both on the technical accounting skills of our specialty finance practice, which has deep experience with the sorts of consumer loans that comprise the portfolio, and our Finance and Accounting Outsourcing (FAO) practice, which offered the experience necessary to design and maintain a technology solution to support all financial reporting requirements of the organization. The client chose our proposed solution over that offered by Accenture, and RSM went to work.
By combining the technical accounting acumen of RSM’s specialty finance professionals with the deep systems skills of our FAO practice, we were able to quickly design and implement a system that allows us to quickly map the right financial data to meet the general ledger and financial statement requirements of the joint venture as a whole and the unique reporting demands of each of the participating partners, including the tight deadlines and very specific reporting demands of the public company partner. We deliver fully combined financial statements for the accounting methods used by the publicly traded partner, including all necessary reporting documentation, within four to five business days of closing each month. Not only has RSM’s solution met the client’s reporting demands and withstood audit scrutiny, it does so through a sophisticated, customized, cloud-based system that the client did not have to build and does not have to maintain, making this a truly turnkey solution. RSM’s team serving the joint venture consists of approximately ten to twelve professionals on a consistent basis ranging from associate to partner in the specialty finance, FAO, valuation and tax service lines.