Consulting firm saved overhead cost by $250K
in the first year of service!
About Crimson Consulting
Crimson Consulting Group is an end-to-end Enterprise Technology marketing consultancy with an objective of high client satisfaction, at low operating costs. The firm specializes in Digital Marketing, Social Media, Lead Management and Demand Generation. Clients include but are not limited to: Adobe, Cisco, eBay, Google, Hitachi, HP, IBM, Intel, Kaiser, Microsoft, Oracle, SAP, Seagate, Symantec, Verizon and Wells Fargo.
Current Number of Employees and Contractors: 100
Current annual revenues: $10+ million
In an effort to stay ahead of the curve in a highly competitive industry, Crimson focused on reducing internal costs and increasing efficiencies in their accounting department. Crimson enlisted Pacific Crest Group (PCG) with the task of restructuring Crimson’s entire internal accounting platform—effectively allowing Crimson to retain focus on its core services of marketing, lead management and demand generation. PCG started implementing procedures, modifying processes, and improved software implementations like: Bill.com and Springahead—allowing for improved time management, increased billing efficiency, and facilitated profit accounting and improved accuracy in reporting. In summation, with the services implemented by PCG, Crimson experienced significant improvements in their customer engagement and client tracking capabilities, while substantially reducing operating and accounting costs—effectively delivering their profitability and cash flow management objectives.
The top two issues: costs and inefficiencies
Crimson must maintain both the highest quality of service with quick turn-around, while at the same time keeping internal costs low to satisfy their client’s cost budgets. The fundamental low-cost price points and quality services were being challenged in current market conditions, further compounded with the lack of internal accounting support. In essence, instead of focusing on growth and clients needs, Crimson found itself derailed by a high cost, internal accounting and HR operations platform. Excessive amounts of time and money were being poured into the accounting department, making business growth and a desired level of profitability unachievable. Before PCG, Crimson was maxing out with four full-time employees in accounting – a cost in excess of $400,000 in annual compensation. Some of the biggest issues were keeping up with the day to day work volume, as well as providing improved financial guidance for pricing and business planning. Within their accounting system, they needed the ability to drill down on problem areas quickly and address them before absorbing too much time and money, yet at the same time, freeing up management’s time for new clients and partnering opportunities as they present themselves.
The first step was a review of Crimson’s accounting systems – end-to-end view of cash flow, accounts payable/receivable, and payroll. After the review, PCG restructured Crimson’s entire accounting platform and improved all the related processes. Upon revamping processes, it was clear that in order for Crimson to get the efficiency levels they desired, different and more useful software needed to be introduced to Crimson’s internal operations. PCG implemented Bill.com for enabling management to approve and pay bills remotely. Springahead allowed quicker approvals, mobility, and improved accuracy of time tracking for profitability.
Crimson was so enthused with the accounting support services PCG implemented and resulting cost savings, they leveraged PCG’s full rubric of services by implementing their expertise in Human Resources with employee development and restructuring, as well as Information Technology systems support. Crimson currently continues to use PCG for all back office service support and continues to grow its business.
The Results of PCG services:
- Better and faster reporting
- Immediate “drill down” troubleshooting ability
- Substantial decrease in internal accounting overhead cost
- Implementation of user friendly cloud bases systems (E.g. Bill.com, Springahead, Paycycle)
- Accurate and timely job cost reporting
- Decreased management involvement
- Improved communications
- Additional services added in HR and IT at a cost savings
Where PCG created Value
Internal accounting processes, reporting and planning, improved employee management, streamlined technology infrastructure, customized tools for Crimson to use in their strategic decision making processes, and of course, large cost savings—all as a result of the systems implemented and services provided by PCG. Crimson traded in 4 full time employees at $400,000 + annually in salaries for an entirely outsourced multi-functional approach of full support in HR, IT and Accounting – for an annual cost of roughly $250,000. This has allowed Crimson to support pursuing business growth opportunities by freeing up management for sales, client service, and marketing initiatives that they weren’t able to take advantage of before. In addition, the firm was able to improve its pricing and better manage its cash flows. Crimson got more support than expected, their internal accounting and HR staffing problems were resolved, efficiencies were increased and overhead costs were decreased significantly—setting up for the desired level of profitability to be achieved, going forward.