Two Step's Private Company Equity Management Blog

Near the end of 2009, I posted the article, Be Happy Generating Your FAS 123R Year-End Disclosures. Now that the 2009 audit season is coming to a close, I wonder how many private companies truly had a stress-free audit? How many were able to quickly generate their FAS 123R (ASC Topic 718) disclosures and are now lounging on a beach in Jamaica, listening to Bob Marley tunes? And how many are still gathering all of the cumbersome back-up details requested by their auditors?

Our customers who are using Equity Focus are already generating their FAS 123R disclosures with ease.

For one Two Step customer, generating the FAS 123R disclosures is old hat. This company maintains their option transactions in Equity Focus as they happen. As a result, they only need to review the transactions at audit time. At that point, the customer provides their auditors with two reports and a few Excel spreadsheets with back-up data - all generated by Equity Focus. The process couldn't be simpler, and because they just completed their third audit with this information, this customer's stress level is much lower than in the past.

Some customers whose audit is coming up later this year are already using Equity Focus to get a jump on generating their disclosures. Last night, I spoke with a CFO whose company has their audit in May. Last year was their first year using Equity Focus - and they started using it just before the audit. Of course, it was a mad scramble to get all of the information into Equity Focus, but the system was able to generate the necessary disclosures just in time. This year, because Equity Focus is already in place, it's just a matter of reviewing the option transactions from the previous year, running a few reports, and working with their auditors. With two months remaining until their audit, that CFO's office is as calm as can be.

I'd love to hear about your experiences generating your FAS 123R year-end disclosures. Share it by answering the poll question below:

If you voted "No," check out an Equity Focus demonstration to see how you can generate your FAS 123R disclosures quickly - and without the usual headaches.

Do you have a success story (or horror story) relating to generating the FAS 123R disclosures for your year-end audit? If so, feel free to share it in the comments section below or email me at: jwright@twostep.com.

I was at Starbucks the other day, chatting about the unseasonably mild weather with my favorite barista, Mark. Out of pure curiosity, I asked him if the customers seem nicer as the weather improves. After all, who doesn't prefer coming in for a grande ice coffee or Frappucino on a gloriously warm afternoon--as opposed to a hot cup of coffee on a bitterly cold day?

So Mark replied, "Honestly, our customers are just great all the time. It's what makes working here worth it. You kind of get to know them and understand what they're going through."

I might have thought he was just giving me the canned company line, but given that Mark has been at this Starbucks for many years--and cares about every cup of coffee as much as the first one he ever made--it seemed genuine. He went on to tell me that over time, he hears about customers' illnesses, job losses, moves, weddings, new babies and kids going to college. According to Mark, listening to customers tell their stories is all part of a day's work for a Starbucks barista.

As I listened to Mark talk about his fondness for his customers, I couldn't help thinking, "Wow! That's how I feel at Two Step Software, even though our jobs couldn't be more different." I asked him how long he'd been with Starbucks (seems like forever to me) and he told me 14 years. I in turn explained that I'd been at Two Step for 16 years and felt the same way he did about our own customers.

Like my coffeehouse friend, I realized that my sentiment wasn't merely a hackneyed business platitude. We at Two Step are genuinely passionate about putting a smile on people's faces and making their difficult jobs a little bit easier.

I told Mark that as we get to know them over the years and share their ups and downs, the Two Step staff really comes to care about our customers on a personal level. I shared a story about one of our favorites who had been the CIO of a large Boston law firm. Her firm has used Corporate Focus for many years, but she was laid off in the legal downturn of 2008-2009.

This particular customer told us about her job loss this past summer, and that she was looking for a new job in the technology field. About six months later, we were thrilled to hear from her that she had joined a great company in Cambridge, MA. Ironically, this company is not only a customer of Two Step's, but Two Step is also a customer of theirs. They use our software for equity management and reporting, and we use their software for website tracking and reporting.

In my opinion, a job doesn't necessarily feel like "work" if you enjoy the relationships you inevitably build with your customers. And when you consider that we spend 30-40 years of our lives working, that's a very good thing.

At Two Step, we love hearing when our customers are pleased with our solutions--and also when they're not. Every day is an opportunity to overcome a new challenge and deliver the best service we can. It also never hurts to hear a heartfelt "Thanks. You saved the day!", or get a referral from a happy client.

Take it from Mark, the barista: focusing on your customers is simply a good way to do business. It's also the way Two Step Software has been doing things for 16 years--and we have no intention of stopping now.

I'm often asked this question by lawyers interested in using Corporate Focus to improve equity management and corporate compliance tracking for their clients: When is the right time to start? Are we too early? Are we too late? Are we right on time?

To help answer these questions, I'd like to tell you about three very different law firms I met with just this past week.

The Small Firm: The first one is a sole practitioner who just left the largest law firm in the world a few months ago; he had used Corporate Focus for his client tracking for several years. This lawyer only has 5-10 clients to put in the system, but these clients represent the vast majority of his revenues. He wants to give them outstanding value for every dollar billed. And he knows that direct access to their data will impress them--and make them feel like they're still getting the same top-notch service they enjoyed at the mega-firm where he previously worked.

The Big Firm: The second is the largest law firm in one Northeastern state where they have over 1,000 corporate minute books they've been tracking for their clients for years. This firm would love to be more efficient when they do their client work--and they'd like to provide clients with direct access to their information. However, with so many minute books (and about 5-10 people that would be forced to change the way they track their clients' data), the project seems a bit overwhelming. They're not quite sure how to get started. They had looked at getting Corporate Focus a few years ago, but decided to postpone it until a "better time" rolled around. At the same time, this prestigious firm wouldn't like their clients to know that their paralegal goes through a mad scramble to calculate ownership information and even to locate minute book documents.

The Medium Firm: The third firm has about 50 attorneys, is the leading business law firm in an exciting region of the West coast, and tracks about 200 client minute books. One of the paralegals present at my meeting was working on a closing recently and the paralegal on the other side of the table asked her colleague how she printed the 45 stock certificates. After hearing the groan from the first paralegal, the other recommended Corporate Focus and said she can print 45 stock certificates in less than 15 minutes without any errors. The first paralegal brightened instantly and she got approval to get started with Corporate Focus in the next few weeks.

Should You Standardize Now?

Imagine if you were an attorney at any one of these law firms. Do you think you should get Corporate Focus now--or later? What if you were a paralegal working for one of these firms? Or a client?

I frequently talk with lawyers who clearly see the value of Corporate Focus for their work and their clients, but they're just not sure if it's the "right time" to get it up and running. There's no question that moving to a consolidated online system for equity management and corporate compliance tracking will change the way you currently work. But change is often a good thing. Efficiency is critical when you are providing high-value services at high billing rates--and you don't want to waste any time on low-value work.

Take a look at the real-life examples above. Maybe they will help you decide if it makes sense for your firm to use a streamlined, centralized online system to better manage your clients' critical information.

If you're still not sure, ask yourself the question:

What would our clients and staff want us to do?

Over the past 15 years, we've helped hundreds of law firms make the move to a more efficient, accurate and collaborative way of working. We'd love to help yours get there, too.

How Corporate Focus Can Make Your Life Easier: Check out this list of 10 key problems that are quickly solved by Corporate Focus:

http://www.twostep.com/CFsolveproblems