Business Value

Analysis: FloQast
Industry: Financial Management
Date: February 2018

www.amalgaminsights.com
Business Value Analysis: FloQast

Introduction
FloQast is a financial close management platform designed by accountants to
Executive Summary
accelerate and improve the financial close. This acceleration occurs through a
shared document store for all financial employees; creation of templates and Key Stakeholders: CFO,
repeatable checklists to track the close process on a monthly, quarterly, or Controllers, Finance Directors,
yearly basis; and a tying out of balances based on reconciled accounts from ERP Finance Managers, Accounting
systems. By combining cloud-based document management, shared visibility Directors, Accounting Managers
to close completion, and annotated review notes across all close workflows,
FloQast removes confusion in the close process that results in a cleaner and First Year ROI: 647%
faster close.
Payback Period: 1 Month
Amalgam found that FloQast customers identified a wide variety of benefits
Why It Matters: FloQast provides
from the adoption of FloQast that included
a Software-as-a-Service solution
• Improved collaboration with other departments based on improved for accelerating and improving
close quality the financial close. An analysis
of FloQast customers identified
• Work-life balance that came from eliminating unnecessary busy work and improvements in work-life
challenges in closing the books
balance, executive strategy, and a
• Achieving executive benefits such as accelerating board meeting financial ROI of over 500%.
schedules associated with strategic guidance.
Top Takeaway: With FloQast,
These benefits led to both quantifiable financial benefit and improvements accounting and finance teams can
associated with executive strategy and work-life balance. shift from spending a majority of
time on financial close to spending
To articulate the full value that FloQast provides across productivity, a majority of their time on
collaboration, work-life balance, executive benefit, and financial ROI, Amalgam financial analysis and value-added
provides this Business Value Analysis to deliver guidance on calculating and activities.
observing the value of FloQast. This report serves as a guide for companies to
build their own bottom-to-top business case for FloQast that will include users,
managers, key stakeholders, and executives.

In general, Amalgam found that FloQast customers started at a point where the
financial close management process was highly manual, challenging to organize,
and seeking greater efficiencies in their close process. FloQast customers
tended to have a majority of the following characteristics:

• A team of five or more accountants and finance professionals assigned to

account reconciliation and financial close
• Complexity of close, including VC-funded companies and in some cases,
companies preparing for an IPO.
• Geographically dispersed team
• Desire to be able to manage the close and leave the office
• Desire to continue using spreadsheets for primary calculation of close results.
• Need for defined and governed workflows associated with the financial close.

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Business Value Analysis: FloQast
iGrafx Case Study – FloQast in Practice
Angela Smoller was introduced to FloQast as the
controller for two portfolio companies: iGrafx and
Packet Design. Initially, she faced significant challenges
in managing the financial close, which was tracked by
a project management solution and took 20 days due
to the challenges of collecting and validating financial
information in a timely fashion. This meant that most
of the month was taken up simply trying to verify and
reconcile the previous month. This left little to no time to
analyze the data or to take any actions that would make
the finance department more efficient.
At the time, Smoller was also tasked with supporting
multiple companies, which led to additional complexity
and moving parts in closing the books. The project
management solution lacked the built-in detail and
governance needed to ensure that financial close inputs
were accurate, which forced Smoller to manually double-
check documents, inputs, and process order prior to
closing the books each month.
To solve this problem, Smoller’s companies examined
the competitive landscape for financial close solutions.
Initially, her team considered both at Blackline and Oracle.
In considering these solutions, Smoller found that these
solutions were overkill in terms of supporting the level
of governance required, with unnecessary oversight and
functional complexity that were only necessary for large,
multinational enterprises. In addition, her team found that
these solutions lacked the ease of use needed to support
adoption, which made them reluctant to move forward
with either solution.
When Smoller looked at FloQast in comparison, she
found that FloQast had a simpler user interface in line
with current web-based and Software-as-a-Service apps
while providing the level of governance necessary to close
books and satisfy executive and investor concerns. In
addition, FloQast cost one-half to one-third the cost of the
other options being considered.
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iGrafx was able to move their financial close onto FloQast
in the same month that they signed a contract. By moving
to FloQast, iGrafx found that all members of the finance
team had faster access to information leading to an
accelerated tie-out of the trial balance. By putting in a
repeatable and automated process where templates and
processes were consistent from month-to-month, iGrafx
employees experienced an improved work-life balance
and spent fewer late nights at the office.
The financial close improvements facilitated by FloQast
provided Smoller and her team additional time to work
on rebuilding financial forecasting models and take on
sales operations and expense optimization projects that
had previously been out of reach. By empowering finance
to be more proactive with managing costs and financial
efficiencies, Smoller’s team became more aligned to
improving bottom-line results rather than simply reporting
on financial results.
Smoller also found that by accelerating the financial
close, iGrafx was able to accelerate scheduling for
board meetings, leading to greater strategic agility. For
a company seeking to execute with agility and achieve
the hypergrowth associated with technology-enabled
startups, the ability to meet sooner and discuss the
strategic health of the company serves as an important
advantage. iGrafx also identified FloQast as a highly
responsive vendor from a support perspective, even
compared to other high quality cloud vendors that iGrafx
used to support finance, accounting, and payment
operations. Through FloQast, iGrafx successfully improved
financial, strategic, and human aspects of the financial
close.
Page 3
Business Value Analysis: FloQast

Key Value #1: Collaborative Value of FloQast

From a collaborative perspective, Amalgam found that FloQast enhanced teamwork and shared working environments by
increasing transparency and flexibility in the close process. Clients noted that the solution provided a shared view of the
close process, including greater visibility to pursue work reviews when financial reconciliations were being delayed for any
reason. As a result, multiple FloQast customers were able to reduce the number of meetings associated with financial close
because of the shared transparency, visibility, and account reconciliation accuracy.

FloQast customers also noted greater flexibility in working together. Because FloQast is a cloud-based solution, employees
were able to verify, authorize, and update results regardless of physical location to enable greater work-life flexibility and
balance. Rather than manually tracking open review notes assigned to staff in the office, employees were able to respond
in near-real time regardless of location without holding up the financial close. Because the close was both templated and
documented, FloQast customers could have multiple team members work in parallel without worrying about whether
work was being duplicated or whether they were inadvertently working in a non-compliant manner. In addition, FloQast
users noted a considerable increase in documentation associated with each close, which accelerated troubleshooting and
explanations for exceptions.

Compared to other products in the financial close space, FloQast differentiates by supporting accountants’ use of
spreadsheets and tying the results to ERP solutions and a product focus on accountant work patterns rather than traditional
enterprise software development that requires conforming to pre-defined templates and legacy architectures. Based on
Amalgam’s study of financial close solutions, we found that FloQast was unique in its combination of financial controls,
repeatable process templates, cloud-based document sharing, and ease of use.

Key Value #2: Executive Value of FloQast

Amalgam Insights finds that enterprise software solutions typically gain positive visibility with the C-Suite by executing
specific tasks that are strategic in managing the business. The business value of core business tasks such as closing the
books, reconciling financial results across the organization, and providing strategic guidance are comprehensible and
clear to C-level executives tasked with guiding corporate growth and success. Through this lens of executive prioritization,
Amalgam found that FloQast gained executive attention through three key traits.

First, the standardized close led to executive assurance that financials are complete on a monthly, quarterly, and annual
basis for budget and investment planning without the need to re-open the books post-close. Second, executives had
greater confidence in the internal controls within the CFO’s office resulting in successful audits. Third, a rapid financial close
can support earlier board meetings and faster strategic decision making. As a result, the CFO can provide the financial
visibility needed for companies to make faster and more confident decisions across revenue, investments, funding, and
cash balances.

Key Value #3: The Financial ROI of FloQast

The quantitative value of FloQast is based on the time reduction in achieving financial close. In estimating the value
of FloQast, Amalgam estimates the total cost of ownership as an aggregate of all interviews where cost metrics were
provided. The cost of FloQast typically started at around $1,000 per month and the overall cost of FloQast on a per
employee basis was approximately one-third the cost of other cloud-based enterprise applications or ERP solutions
focused on close management.

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Business Value Analysis: FloQast

In addition, the cost of administration was fairly minimal, with all interviewees stating that FloQast was very easy to
administrate in terms of setting up and maintaining financial workflows. On average, interviewees stated that FloQast took
up about one hour of the manager’s time per month with no IT resources needed.

The key benefit of FloQast came from reducing the time needed to close the books on a monthly, quarterly, and annual
basis. This time savings came from three primary sources:

• Improved Communication/Reduced Meeting Time: Daily email summaries, automated email alerts for reconciliation
review and accounts that no longer tie out, and review notes allowed FloQast customers to reduce the need for
frequent meetings during the close process.

• Automatic Reconciliations: By integrating with Excel, FloQast supported automated trial balance tie-outs directly
against the general ledger, which accelerated reconciliations and guaranteed a comprehensive and accurate close.

• Process Automation: Accounts and filters rolled forward each month to guide staff accountants and further quicken
the close process. Clients identified alerts and reminders to identify incomplete steps or next steps as features that
accelerated the close process.

Managers noted the reduction of financial close processes from an average of 15 days to an average of 10 days. Multiple
interviewees identified the potential for additional time reduction based on the employees’ ability to change work habits
and processes. Amalgam spoke with multiple veteran FloQast users that targeted a five day close once they had mastered
the capabilities and functionalities that FloQast provided to improve the financial close.

The value of this time can considered in terms of compensation reallocation. For example, the average accountant in
the United States had an annual salary of roughly $68,150 per year in 2016. The fully-loaded cost of that employee is
approximately 1.3 times this salary, or $88,595. This breaks down to $1771.90 per week based on 50 weeks per year or
$354.38 per day or $44.29 per hour.

How to Calculate Your ROI from FloQast

The model below is based on productivity savings from improved close collaboration, trial balance tie out automation for
reconciliations, and process automation to reduce the time necessary to close the books. To understand your organization’s
true potential Return on Investment in using FloQast, you must first figure out what your costs and benefits are. In general,
Amalgam looks at the following cost areas for technology investments as a starting point: Software, Hardware (or cloud
equivalents), Labor, Training, and Consulting.

FloQast, as a SaaS solution, has no dedicated server or cloud infrastructure costs. In addition, it does not charge for
consulting costs. This ROI analysis looks at FloQast’s base package. From a cost perspective, Amalgam considers the costs
of FloQast as a Software-as-a-Service solution, the administration and labor costs associated with solution selection, and
the training costs associated with the solution.

1
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Occupational Employment and Wages, May 2016,
on the Internet at https://www.bls.gov/oes/current/oes132011.htm, visited December 1st, 2017”

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Business Value Analysis: FloQast

Understanding the Standard Costs for FloQast

Prior to acquisition, Amalgam’s interviews identified an average of 40 employee-hours used to evaluate FloQast as a
solution between initial awareness, setting up the proof of concept, and signing off on the contract. Based on a blended
rate of accountant and manager time, Amalgam uses $75 per hour as an estimate of the time and cost of this initial
labor and administration cost. For this ROI analysis, the initial cost of this evaluation is estimated at $3,000 based on
multiple experiences.

In Year One, Amalgam notes three key recurring costs: Software, Administration, and Training.

• The Software cost is based on a cost of roughly $1,000 per month to use the core FloQast solution on an
introductory basis.

• The cost of administration was estimated to be approximately one hour per month. Based on the cost of a Controller
or accounting team manager who was typically tasked with this activity, Amalgam estimated this fully-loaded cost at
$100 per hour * 12 hours = $1,500 per year.

• The cost of training was estimated at one hour per year per employee. The estimate used for the Amalgam model was
based on five accountants making the United States fully-loaded cost of approximately $45 (rounded up from $44.29
for simplicity’s sake) per hour to provide an annual estimated cost of $225.

Understanding the Standard Benefits for FloQast

From a value perspective, the financial ROI of technology in a general model comes from a combination of time saved,
employees laid off or reallocated, increased throughput, increased yield, and increased revenues. From a FloQast-specific
perspective, there was no immediate increased demand for more frequent financial close results and employees were
not typically reallocated or replaced in a FloQast deployment. Rather, FloQast typically led to employee time saved, which
was then reallocated to value-added activities such as deeper cost optimization, sales optimization, internal audits, or
preparation for funding and IPO activities.

The productivity value of $106,314 comes from the weekly fully-loaded cost of $1771.90 per employee * 5 employees/
month * 12 months. As a result, this ROI calculation based on the experiences of multiple FloQast customers results in a
647% ROI in Year One after accounting for the selection costs and a 792% ROI in subsequent years based on historical
pricing and labor costs. Your own organization’s ROI will depend on your organization’s complexity of software purchasing
processes, cost of labor, and financial close length.

Based on discussions with a variety of FloQast customers, Amalgam provides the following estimate of financial ROI
that new customers can expect in their implementations based on the direct costs of FloQast and the estimated costs
of solution evaluation, administration, and training. This estimate is based on one employee-week spent evaluating
FloQast against competitors, one hour of administration per month, training time of one hour per employee each year, and
productivity benefits based on five days saved each month for a five employee team of accountants.

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Business Value Analysis: FloQast

Table 1: Analysis of FloQast Financial ROI

Initial Cost Year 1 Year 2 Year 3

Software $- $ 12,000 $ 12,000 $ 12,000
Administration $ 3,000 $ 1,200 $ 1,200 $ 1,200
Training $- $ 225 $ 225 $ 225
Total Costs $ 3,000 $ 13,425 $ 13,425 $ 13,425

Productivity $- $ 106,314 $ 106,314 $ 106,314

Total Benefits $- $ 106,314 $ 106,314 $ 106,314

Annual ROI 0% 647% 792% 792%

Cumulative Net Value ($ 3,000) $ 89,889 $ 182,778 $ 275,667

Source: Amalgam Insights, February 2018

Personalizing the ROI of FloQast

Some FloQast customers also cited potential audit cost savings based on direct access to account reconciliation
information and providing select visibility for clients. This data can reduce the team’s interaction with auditors and the
overall time needed to complete an audit. As an example, one customer reported reducing audit costs by 10% following the
implementation of FloQast. Based on client need, audit cost savings may or may not be realized and are not factored into
this general financial ROI model.

In evaluating the financial ROI of FloQast, Amalgam recommends that potential clients look at the ROI of FloQast in context
of the number of accountants and financial personnel assigned to the financial close and to the number of days saved with
a target of achieving a financial close in between five and ten days. In doing your own ROI calculation for FloQast, use the
following core data entries: team members, cost -basis for each employee, current close length, expected improvement,
and the cost of FloQast.

Table 2: Personalized FloQast ROI Calculation

Key Metrics Your organization

# of accountants in close

Fully Loaded Cost of Accountants

Fully Loaded Cost of Manager

Number of days per month spent on financial close

Expected improvement (5 day close is a common goal)

Cost of FloQast

Source: Amalgam Insights, February 2018

Generally, Amalgam recommends that new technology investments should project to 5-10x ROI, as this level of ROI is
associated with meaningful technology-enabled change that all stakeholders can perceive.

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Business Value Analysis: FloQast

Conclusion
FloQast investment can be justified either as a top-down financial ROI recommendation assigned to an enterprise
accounting team or as a bottoms-up solution adopted by a subsidiary or geography and then expanded to the enterprise.
Because FloQast is a SaaS solution that can work jointly with a wide variety of accounting solutions and files, it can be
integrated into financial environments relatively easily.

In conducting this holistic Business Value Analysis, Amalgam Insights found the value of FloQast is typically identified
by a manager who intuitively understands the value and is impressed with the ease of automating tie outs to the trial
balance. In practice, the ability to accelerate financial reconciliations and closes lead to additional audit and expanded close
management based on timely and accurate visibility. In conducting this ROI analysis, Amalgam found that the financial value
was quickly justified based on the productivity gains achieved.

Companies considering FloQast should identify the appropriate value propositions to relevant stakeholders: accountants
don’t care about board meetings and executives don’t care about intricacies of balance sheet reconciliation processes.
Although FloQast’s value proposition was holistic in nature and all clients interviewed were satisfied, not all clients were fully
aware of the value that they had received.

The most satisfied FloQast customers spoke first about the employee satisfaction and improved work environment created
through the FloQast implementation. In evaluating the business value of FloQast, consider both the initial productivity
benefits and the strategic and work-life balance benefits that can result from the use of this solution.

Based on the experience of FloQast customers, Amalgam believes FloQast serves as a strong example of how a purpose-
built SaaS solutions can provide holistic value through operational, financial, and strategic ROI. By focusing on the
accounting role, developing a value proposition that resonates both for accountants and executives, and supporting
ongoing value for business managers and corporate boards, FloQast demonstrates how financial close management can
provide value across the entire business.

Hyoun Park, Principal Analyst

February 13, 2018

Appendix: Foundation and Research Methods

Amalgam conducted a Business Value Analysis research initiative to identify and document the financial, executive, and
collaborative value that FloQast clients have received by working with the solution. Amalgam conducted four primary
interviews with FloQast customers and summarized over 70 additional interviews of FloQast customers to determine the
holistic business value created by FloQast. These organizations represented different verticals and company sizes ranging
from large enterprises to startups. In speaking with and analyzing over 70 FloQast customers, Amalgam found that FloQast
has quickly emerged as a company that provides substantial and perceivable value across financial, strategic, and team-
based value propositions that have been summarized in this document.

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Business Value Analysis: FloQast

About Us

About Amalgam Insights Author: Hyoun Park

Is a leading research, advisory, and consulting firm
focused on Technology Consumption Management:
the technology, personnel, and strategies to unlock
business value from new technologies for emerging and
disruptive business models.
This focus on the purchase and utilization of technology
bridges key CFO-CIO gaps in maximizing the value of
technology investments and successfully supporting
enterprise technology.
AI provides over 20 years of experience in supporting
high-growth and disruptive companies with a focus on
translating new technologies into Digital advantage.
Tactically, AI focuses on the following practices as part
of the Technology Consumption Management umbrella:
• Hybrid IT management
• Accounting and Audit Automation
• Data Science Preparation
Hyoun Park is the Founder and CEO
of Amalgam Insights. He focuses on
Technology Consumption Management challenges
across financial, technical, and operational
environments based on 20+ years of vendor, enterprise
IT, and industry analyst experience.
Prior to Amalgam Insights, Hyoun:
• Led IT analyst practices at the Aberdeen Group
and Blue Hill Research with over 300 research
documents across analytics, mobility, finance, and
collaboration.
• Ran an enterprise social media consultancy,
DataHive Consulting, focused on social media
launches for VC-backed startups.
• Managed multi-million dollar IT expense
environments at Bose and Teradyne (NYSE:TER).
• Managed billing data operations for two resale
telecom CLECs.

• DevOps (Software Development and Operations) • Worked on the first Fantasy Baseball website,
mosey.com
• Enterprise Collaboration

• Neurology-Based Learning and Training

Phone: +1 415 754-9686

Website: www.amalgaminsights.com

Twitter: @AmalgamInsights

Disclaimer: Amalgam Insights provides consulting, research and advisory services to a variety of technology consumers and
vendors, and may have revenue-based client relationships with companies mentioned in our research.

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