Professional employer organization improves reporting and productivity

Client background

Nextep is an industry-leading, IRS-certified, professional employer organization (PEO) dedicated to helping small and medium-sized businesses nationwide with human resources, benefits, risk and compliance and payroll services.

The company's employees are dedicated to elevating the employment experience and enriching people’s lives. 

Ronda Rogers, Nextep’s controller, shared, “As we anticipated even more growth, we knew it would be crucial to bring our accounting software into the 21st century. We decided to make a change and went in search of a cloud-based, multi-entity financial solution with robust reporting and dashboard capabilities. After comparing Baker Tilly with Microsoft Dynamics GP, Baker Tilly was clearly the better fit for our needs.” Baker Tilly implemented the system in just seven weeks and Nextep instantly saw improvements.

The business challenge

• Nextep struggled to manage complex accounting processes
• Duplicate journal entries created confusion and errors
• The company was unable to see financial data across specific projects, regions, customers, employees or vendors for deeper reporting and analysis
• The finance team had trouble managing consolidations and reporting in Excel

Strategy and solution

• Nextep gained strategic insight into regional profitability
• The company was able to scale easily with 23% growth
• Nextep saw improved productivity by 25%
• Software paid for itself in less than four months

Baker Tilly now provides full insight into Nextep’s financials across a variety of operational dimensions that allow them to slice and dice data across specific projects, regions, customers, employees or vendors for deeper reporting and analysis. This both simplifies the company’s chart of accounts and adds context to its date, which makes it easy to get fast answers to a wide range of business questions. Nextep pushes invoice data from its PrismHR system into Sage Intacct for region-level profit and loss (P&L) statements, and also integrated Sage Intacct with Adaptive Insights to simplify forecast-to-actuals comparisons.

“With Baker Tilly, we can finally report down to the region level and see our costs vs. income, as well as total headcount and clients in each region,” noted Rogers. “We track important metrics like our gross profit per worksite employee and ratio of worksite employees to internal corporate employees. This insight is critical, because it helps us determine how productive a particular region is from one month to the next, make decisions about whether the business should stay in that region, and look at our future to forecast where we want to be.”

Personalized dashboards for Nextep’s managers and sales team show relevant data points, like the current worksite employee count, department P&Ls with actuals vs. forecast, and profitability of key service lines, such as benefits, medical insurance, etc. In addition, they enjoy real-time access to all core financial reports—now that they are prepared in Sage Intacct rather than Excel—which saves a tremendous amount of time while greatly increasing reporting consistency, accuracy and visibility.

Nextep’s leadership team has a monthly financial highlights dashboard in Sage Intacct that shows the company’s working forecast, balance sheet summary and quarterly P&Ls. It includes key performance indicators, which highlight whether overall gross profits, operating expenses by category, certain margins and revenue are trending up or down month-over-month, year-over-year or as compared to the forecast. As a result, they always have a clear picture of the health of the business, can address problems proactively, and capture market opportunities more quickly.

“Baker Tilly also makes it easier to meet quarterly reporting requirements for our various PEO certifications, like the IRS, ESAC, NAPEO and SPEA,” said Rogers. “All of the data we need to provide them is included on a quarterly dashboard, and we can create professional financial
reports to meet those external requirements without any spreadsheet manipulation.”

Baker Tilly brought impressive efficiency benefits to Nextep’s daily financial processes as well. Rather than spending two hours every day on manual, duplicated journal entries across entities, the finance team can just enter data once and rely on Sage Intacct to automatically create all subsequent inter-company entries. The system’s multi-entity structure even streamlined Nextep’s vendor relationships by enabling a single vendor list and combined payments across entities. Prior to Baker Tilly, accounting spent a lot of time passing around hard copy invoices, matching them with backup documentation, hand coding general ledger accounts, physically signing checks and scanning everything in to a third-party A/P system. Now, the team can view all outstanding invoices on a dashboard in Sage Intacct, and the system tracks online approvals from assigned department managers and accounting before each item goes out for final payment.