3 questions to smart minds

Manage Buy & Build more successfully with Reporting-as-a-Service

For this 3 questions to Martin Sparrow

loyos bi GmbH, Hamburg
Photo: Martin Sparrow
13. March 2024

Buy & build concepts have been a popu­lar and gene­rally promi­sing invest­ment stra­tegy in the private equity market for years. Trans­pa­rent finan­cial report­ing is a key value driver, but often invol­ves a lot of effort.

For this 3 ques­ti­ons to Martin Sper­ling, Mana­ging Direc­tor and foun­der of loyos bi GmbH, Hamburg

1. Why does the finance area regu­larly pose complex problems in buy & build concepts?

In the opera­tio­nal imple­men­ta­tion of buy & build concepts, the finan­cial area often beco­mes a bott­len­eck. The rapidly incre­asing comple­xity of the new corpo­rate struc­ture meets the simul­ta­neously incre­asing demands of inves­tors, banks and not least the (new) manage­ment. In addi­tion, the buy & build busi­ness case is gene­rally based on scalable top-line deve­lo­p­ment with little or no increase in back-office costs. With our “Report­ing-as-a-Service” approach, we have alre­ady successfully achie­ved this balan­cing act for many well-known PE inves­tors. The decisive factor here is the combi­na­tion of the latest tech­no­logy with compre­hen­sive know-how.

2. What exactly are the chal­lenges here?

Compa­nies usually have a hete­ro­ge­neous land­scape of systems and charts of accounts. Incon­sis­tent proces­ses and cont­act persons for the prepa­ra­tion of monthly finan­cial state­ments (in-house finan­cial accoun­ting, tax consul­tants, etc.) also require a great deal of time and clari­fi­ca­tion. A lack of capa­city and a possi­ble lack of know-how in exis­ting teams can also be a problem. — The first conso­li­da­ted group report­ing after closing must be available quickly, as further proces­ses are based on it, in parti­cu­lar bank report­ing and budge­ting. The high level of comple­xity makes manual Excel-based report­ing risky and immensely time-consuming.

Many of the chal­lenges mentio­ned above require the conso­li­da­tion of large and dispa­rate amounts of data and their trans­pa­rent proces­sing. Micro­soft Power BI & Power Plat­form are excel­lent tools for this.

3. And how do you solve these chal­lenges at loyos-bi?

The real success factor is the tech­no­logy. The aim is to create complete trans­pa­rency, i.e. to be able to trace finan­cial accoun­ting data at posting record level.

As a busi­ness intel­li­gence solu­tion, our Power BI solu­tion is able to store and process very large volu­mes of data. The finan­cial data of all compa­nies can ther­e­fore be impor­ted in full and for any length of time. Complete means that the data can be provi­ded not only at balance level, but even at indi­vi­dual posting level, which is almost impos­si­ble to map in clas­sic Excel report­ing, for exam­ple, due to the volume of data. This provi­des a trans­pa­rent view of the figu­res via a single report­ing inter­face. The complete data deduc­tion also prevents data incon­sis­ten­cies: the figu­res can always be trans­fer­red to the accoun­ting system, even for previous periods.

Martin Spar­row is Mana­ging Direc­tor of loyos bi GmbH. In his profes­sio­nal career, he worked for more than 15 years as mana­ging direc­tor, consul­tant or opera­ting part­ner for leading private equity inves­tors such as AUCTUS Capi­tal or Ufenau Capi­tal. His main focus was on setting up and restruc­tu­ring the finan­cial areas and proces­ses in the subsi­dia­ries, as well as respon­si­bi­lity for buy & build and sell-side proces­ses. Thanks to his expe­ri­ence, he knows what is important in a compre­hen­si­ble and resi­li­ent report­ing solu­tion, where the chal­lenges lie in prac­tice and how to solve them sustain­ably. —

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