How midsize companies can optimize finance, accounting functions as costs rise

Optimizing the finance and accounting function can help middle market companies weather the environment of rising capital costs.

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How midsize companies can optimize finance, accounting functions as costs rise

ARTICLE | October 19, 2023 | Authored by RSM US LLP

Rising costs of capital are squeezing middle market firms, according to an RSM US Middle Market Business Index special report on financing.

Rising costs of capital are squeezing middle market firms, according to an RSM US Middle Market Business Index special report on financing. The rising costs will make financing more expensive and also make it tougher for businesses to access capital, which is already more of a challenge for many small and midsize businesses than their larger counterparts.

Streamlining the finance and accounting function can help middle market companies weather this environment. Optimized finance and accounting departments can provide lenders with higher-quality data and better visibility into the business.

“That will ultimately put the business in a better position to work with lenders and raise capital,” says Michael Smith, finance and accounting outsourcing leader at RSM US LLP. “But those things can’t happen unless you optimize your finance department.”

Here are some ways businesses can enhance their accounting and finance departments to mitigate the challenges of surging financing costs:

  • Assess opportunities for automation: Even companies that already use automation technologies should look for ways to automate manual functions to produce more timely reporting while freeing up employee time for more critical tasks.

    For example, in the finance department, organizations can use robotic process automation to automate the creation of journal entries, which is often a manual process.

    “Automation doesn’t have to be all or nothing,” says Smith. “Even if something can be automated but still needs to be reviewed by a person, that can still save time.” One example is using exception reporting tools; instead of an employee having to look through an entire dataset for accuracy, such tools can flag anomalies for human review.

    Automation usually goes hand in hand with enabling a clear data strategy, too. Better information and analytics will ultimately allow the business to spend more efficiently.

  • Explore scalable alternative staffing models: Like automation, outsourcing isn’t usually an all-or-nothing approach, either. For most companies, co-sourcing—keeping some functions in-house and working with an external provider for others—is a key solution to improve efficiency.

    It’s also important to ensure your staffing approach is scalable depending on changes the business may experience throughout its life cycle. The finance and accounting teams may need to expand or contract at different times. When a company needs to adopt a new accounting standard, for example, it might make more sense to work with a third party for that adoption. Teams should continually assess which functions are better candidates for outsourcing.

Read the special report

2023 RSM US Middle Market Business Index Special Report: Funding

Rising real interest rates are pushing up the cost of commercial and industrial loans, making it harder for middle market firms to meet payroll and finance their expansion, according to findings in the third-quarter
RSM US Middle Market Business Index survey.

Find out how businesses are coping with the higher cost of capital in our special report.

  • Leverage the FP&A function to its full extent: The financial planning and analysis function will be key in helping organizations navigate the implications of higher financing costs across the entire company.

    “It’s not just about the function of accounting and finance; FP&A plays a key role in helping the business understand itself and where capital should be deployed,” says Patrick Brennan, a financial consulting leader at RSM US LLP.

    FP&A teams might zero in on customer profitability metrics, variance analysis, key financial performance indicators and operational KPIs, plus a clear understanding of cost structures, including fixed versus variable costs. Using tools such as Microsoft Power BI to pull all that information into a dashboard enables a company to tell a comprehensive story on business and financial performance.

  • Revisit your pricing structure: Depending on their sector, some businesses may not have revisited their product or service prices following the disruption and inflation of recent years, and for many of those, now is the time to do so.

    “We get so cost-conscious in times of rising capital costs, but we don’t always address how to price products and services,” says Brennan. “The FP&A function can also help the organization think about pricing and other untapped areas for value creation.”

  • Have the right people in place: Companies need to be careful not to get too caught up in buying new technologies without having the right people on their teams to achieve success as costs rise and the margin for error shrinks.

    “Profits can mask many problems. And since profits are shrinking, it’s important to have the right team and technology in place,” says Smith. The two should work harmoniously together, with employees leveraging technology to its fullest and most efficient extent.

Meeting a higher threshold

Alongside these action items, companies must also be prepared to meet a higher bar for the internal and external projects they pursue.

“In a lower interest rate environment, plenty of projects might make sense,” says Brennan. “But in this environment, potentially fewer projects achieve the hurdle rates necessary to proceed. That means certain businesses face more pressure on the investments and the capital expenditures that fuel growth.”

Middle market organizations will need to be more strategic in how they prioritize going forward, balancing cost optimization with enabling growth as market conditions continue to evolve. Working with an advisor to explore the critical points above can be a good place to start.

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Call us at (541) 773-6633 (Oregon), (208) 373-7890 (Idaho) or fill out the form below and we’ll contact you to discuss your specific situation.





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This article was written by RSM US LLP and originally appeared on 2023-10-19.
2022 RSM US LLP. All rights reserved.
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KDP Certified Public Accountants, LLP is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

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For more information on how KDP LLP can assist you, please call us at:

Oregon Office:
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(208) 373-7890

Carli J. Harvey Awarded Chartered Financial Consultant® (ChFC®) Designation

We are delighted to share that Carli J. Harvey, the esteemed Wealth Advisor and Partner at KDP Wealth Management LLC., has recently achieved the highly respected Chartered Financial Consultant® (ChFC®) professional designation from The American College of Financial Services.

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Carli J. Harvey Awarded Chartered Financial Consultant® (ChFC®) Designation

Article | October 19, 2023 | Authored by KDP LLP

October 19, 2023 – Medford, Oregon

With great pleasure, we bring to your attention the dedication and commitment of professionals who strive to enhance their knowledge and expertise to serve their clients better. 

We are delighted to share that Carli J. Harvey, the esteemed Wealth Advisor and Partner at KDP Wealth Management LLC., has recently achieved the highly respected Chartered Financial Consultant® (ChFC®) professional designation from The American College of Financial Services. 

Earning this distinction requires completing eight college-level courses, eighteen hours of supervised examinations, and fulfilling stringent experience and ethics requirements.

This esteemed credential is highly regarded within the financial planning industry, requiring candidates to complete rigorous coursework, examinations, practical experience requirements and demonstrate advanced knowledge and experience in financial planning, including:

  • Risk management strategies, including mitigating the risks associated with insurance, human capital, liability, property, and wealth management.
  • Income tax strategies, including planning for deductions, tax credits, capital gains and losses, taxation of life insurance, annuities, and partnerships, LLCs, corporations, and proprietorships.
  • Retirement planning strategies, including choosing between and working with SEPs, SIMPLEs, IRAs, Roth IRAs, 403(b), and nonqualified deferred compensation plans.
  • Investment strategies, including issues pertaining to return computations, diversification, securities markets, tax issues, portfolio management, and ethical practice.
  • Estate and gift tax planning strategies.
  • Specialized strategies, including aiding divorcees and blended families, financial planning for families with special needs, and addressing the unique challenges associated with modern retirement income portfolios.

Carli is enthusiastic about the opportunity to incorporate her newfound knowledge and expertise into better serving her clients, particularly in advanced estate planning and business planning. She is steadfast in her commitment to ongoing education and recognizes its significant value to her personal growth and client relationships.

With multiple licenses and designations, Carli is well-equipped to provide KDP clients with expert advice and guidance in various financial domains, including investment management and estate planning. 

If you wish to schedule a complimentary consultation, give Carli a call at 910-889-1786 or reach out with an email at charvey@kdpllp.com  

Securities offered through Avantax Investment ServicesSM, Member FINRASIPC. Investment advisory services offered through Avantax Advisory ServicesSMInsurance services offered through an Avantax affiliated insurance agenc 

Let’s Talk!

Call us at (541) 773-6633 (Oregon), (208) 313-7890 (Idaho) or fill out the form below and we’ll contact you to discuss your specific situation.





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KDP Certified Public Accountants, LLP is a team of CPAs and business advisors with a local focus, but a national reach. We have offices in Medford, Oregon and Boise, Idaho, as well as satellite offices throughout the United States. We have been providing professional tax, accounting, audit, and management advisory services since 1976, serving clients nationwide. Our firm has more than 90 trained professionals on staff dedicated to furnishing high-quality, timely and creative solutions for our clients.

For more information on how KDP LLP can assist you, please call us at:

Oregon Office:
(541) 773-6633

Idaho Office:
(208) 373-7890.