When US company Adaptive Insights acquired Australian-based MyDials, they found themselves facing significant challenges. They needed an accounting partner with experience in multiple tax jurisdictions who could offer exceptional service and turnaround to support the fast growth of their business.
Adaptive Insights is a rapidly growing Silicon Valley business that provides a fully integrated cloud platform for corporate performance management and business intelligence. Founded in 2003, they have been ranked multiple times as the number-one fastest-growing company in performance management on the Deloitte Fast 500.
As part of their growth strategy, Adaptive Insights acquired Australian-based MyDials in August 2012. With only 17 employees and nine customers, the new Australian division lacked the financial experience now required of their international parent company. Despite appointing an Australian accounting firm to support them in their early days, they struggled with their inexperience of the US GAAP requirements and the drawn-out response times accentuated by the time difference.
Cameron Barber from MGI was recommended to Adaptive Insights and was engaged to help the head office team correct the Australian division’s accounting and tax management.
Bringing local Australian expertise into the picture
Adaptive Insights Director of Accounting, Irene Perlich, said they were unfamiliar with Australian compliance and taxation matters, and certain operational issues.
“We needed an Australian partner whom we could trust and whose expertise would relieve us from the burden of doing business in a foreign country,” Irene said.
“MGI was well versed in both US Generally Accepted Accounting Principles (GAP) and Australian accounting standards, which was an immediate relief,” she said.
Providing someone on the ground with local insights and contacts
“Even opening a bank account was almost impossible in the early days,” Irene said.
“We had to get MGI to help us and put us forward to their bank contact.”
MGI was hired to take over from the internal Australian finance manager when it was identified the previous regulatory filings had issues and were submitted late.
“When MGI first took over the tax, they had to revisit multiple years and perform an in-depth analysis to ensure accurate and timely submission of the current tax return,” Irene said.
Today, MGI handles the entire accounting and compliance for the Australian division and acts as a conduit to deal with any queries or concerns from the Australian resident director.
“We know we can always rely on Cameron and his team at MGI to have our back in Australia,” Irene said.
Minimising the cost of doing business in another country
Early in the engagement, MGI helped Adaptive Insights to structure the transfer of intellectual property to avoid the imposition of withholding tax. Getting this right ensured the business didn’t overpay thousands of dollars in excessive tax. More recently, MGI, along with another consultant, reviewed the entire Australian business structure and provided a recommendation for the best approach to transfer pricing agreements, again with the view of reducing the cost of doing business across multiple countries.
Aligning financial reporting of the parent and subsidiary
The Australian subsidiary fiscal year was mid-year and didn’t match the end-of-year of Adaptive Insights, which caused a number of problems. MGI supported the US team to completely rewrite the whole 2013 year and overwrote all transactions completed by the previous provider.
Response time has been very important to Adaptive Insights, as the team has worked through a busy period with significant growth pains.
“Even when I have asked for something in the middle of their night, I get a response first thing in the morning,” Irene said.
It’s quite amazing, really, but I’ve never heard ‘no’. I can always rely on MGI to be on standby.
Irene Perlich, Adaptive Insights
Where to from here
Adaptive Insights continues to go from strength to strength and is extending its network of partners and resellers worldwide.
“If Adaptive Insights chooses to go public one day, we would need to be market-ready almost instantaneously,” Irene said.
“We know we will not have time to make changes then and that we have to start getting ready early.”
“We have had such a great experience with MGI helping us with this on both sides of the world, and we will continue to rely on MGI as we undertake this journey.
“Would I recommend MGI to other companies in the same situation? I have already.
“Because at the end of the day, if you extend your international presence to Australia, you require a strong accounting partner like MGI.”
MGI has ensured Adaptive Insights meets all compliance requirements and minimises the costs of doing business in another country.