The Challenge
Expanding into the U.S. market presented Reef Risk Group with a range of challenges, from navigating complex regulatory environments and high tax compliance costs to managing fragmented financial processes and operational silos. Additionally, issues with banking relationships, payroll systems, and timely tax filings created further obstacles. These hurdles highlighted the need for a strategic partner to streamline operations, enhance compliance, and provide greater management visibility across U.S. functions.
These challenges include:
1. Banking Relationships and Treasury Functions
Setting up U.S. banking relationships was challenging due to the company’s 100% foreign ownership structure, leading to delays in establishing operational accounts. Additionally, the group finance team in Australia had no real-time visibility or access to U.S. treasury functions, complicating cash flow management and oversight.
2. Regulatory Complexity
The highly regulated U.S. financial services market required compliance with numerous federal, state, and local agencies. Without a dedicated local compliance team, keeping up with constantly changing requirements became a major obstacle.
3. High Tax Compliance Costs and Inefficient Tax Support
Due to the company’s foreign ownership structure, multiple operating entities, and corporate income tax nexus in 14 states, tax compliance became a costly and complex process. Despite working with a top 50 U.S. accounting firm, the tax services provided were neither timely nor comprehensive. Filings were often delivered at the last minute, leaving management with insufficient time for thorough review and approval, resulting in rushed submissions and increased risk of errors.
4. Substantial Accounts Receivable Aging and Poor Collection Coordination
Reef Risk Group faced significant issues with accounts receivable, with a substantial portion of customer balances exceeding 90 days past due. The absence of a localized reporting structure and dedicated coordination for receivables collections resulted in delayed payments, cash flow strain, and limited visibility into outstanding balances.
5. Cross-Border Financial Integration
Existing financial processes were not suited to U.S. standards, requiring adaptation to a dual IFRS/U.S. GAAP reporting environment and more rigorous financial reporting. Consolidating financial statements across the Australian and U.S. operations was both time-consuming and complex.
6. Talent Acquisition in a Competitive Market
Attracting and retaining top-tier talent for critical roles in compliance, finance, and operations was difficult in the competitive U.S. financial services market. This delayed the company’s ability to build a capable local team.
7. Operational Inefficiencies
Disconnected processes and a lack of standardized workflows led to inefficiencies, slower decision-making, and higher administrative overhead. The absence of automation exacerbated these issues, resulting in increased manual work.
8. Technology Systems and Applications
The company struggled to navigate the complex nature of U.S. payroll systems, particularly in calculating taxes across multiple jurisdictions and ensuring payroll tax compliance. Additionally, they faced challenges in integrating various local systems with their global platforms, resulting in a U.S. operational silo that group management could not access in real-time.
The Solution
Teel+Co partnered with Reef Risk Group to address their U.S. market entry challenges by delivering integrated solutions across finance, tax, HR, and technology. From establishing compliant financial systems and streamlining tax processes to enhancing treasury management and integrating operational platforms, Teel+Co provided the day-to-day expertise needed to stabilize operations. By ensuring timely compliance, improving efficiency, and increasing management visibility, Teel+Co positioned Reef Risk Group for sustainable growth in the U.S. market.
These solutions include:
1. Streamlining U.S. Banking and Treasury Operations
To overcome the challenges in banking relationships and treasury functions, Teel+Co leveraged its network and expertise in U.S. banking to expedite the establishment of local banking partnerships. By working with largest U.S. banks experienced in handling foreign-owned entities, Teel+Co streamlined the account setup process and implemented a centralized treasury management system. This provided the group finance team in Australia with real-time visibility into U.S. cash positions and transactions, improving overall cash flow oversight. Additionally, Teel+Co helped develop robust treasury policies that enabled better liquidity management and operational control across borders.
2. Ensuring Seamless Regulatory Compliance
In response to regulatory compliance complexities, Teel+Co designed a tailored compliance framework that ensured adherence to U.S. financial regulations at both federal and state levels. This included establishing a compliance monitoring process, conducting regular internal audits, and offering ongoing training for key personnel to keep them informed of regulatory changes. Acting as a liaison with regulatory agencies, Teel+Co further ensured timely submission of reports and reduced the risk of non-compliance.
3. Delivering Proactive and Comprehensive Tax Compliance
To address the tax compliance inefficiencies, Teel+Co implemented a proactive approach to managing the company’s complex tax obligations across 14 states. Teel+Co took over coordination, preparation, and delivery of all tax-related activities, working closely with internal teams to ensure timely and accurate filings. By establishing a structured tax compliance calendar, Teel+Co provided management with sufficient lead time for review and sign-offs, reducing the risk of rushed submissions. Additionally, Teel+Co conducted regular monthly reviews of the company’s tax positions and identified opportunities to reduce tax liabilities and compliance costs. This approach ensured that tax advice was not only comprehensive but also actionable, empowering management with better control over the tax compliance process.
4. Implementing a Localized Accounts Receivable Management Process
To address the accounts receivable challenges, Teel+Co introduced a structured receivables management framework. This involved setting up local reporting mechanisms to track aging balances and identify overdue accounts in real time. Teel+Co also helped establish a dedicated collections process dedicated collections process, including assigning local resources to follow up on outstanding payments and coordinating directly with customers. By enhancing visibility and enforcing consistent follow-up procedures, Teel+Co reduced the over-90-day receivables balance, improving overall cash flow and liquidity.
5. Harmonizing Financial Systems Across Borders
To address cross-border financial integration, Teel+Co’s Fractional CFO Services played a critical role in bridging the gap between U.S. operations and the company’s existing Australian framework. They implemented a U.S. GAAP-compliant financial reporting system that enabled timely and accurate consolidation of financial statements across both markets. By standardizing financial processes and introducing automated tools for consolidation, Teel+Co significantly reduced manual errors and improved the accuracy and efficiency of financial reporting.
6. Building a Compliance and Scalable U.S. Human Resources Function
In the area of talent acquisition and HR support, Teel+Co’s primary role was ensuring compliance with U.S. labor laws and employment regulations. Teel+Co developed and implemented a comprehensive HR compliance framework, covering critical areas such as payroll tax compliance, employee classification, and benefits administration. By establishing clear HR policies and ensuring alignment with local regulations, Teel+Co enabled the company to operate confidently while minimizing legal and financial risks. Additionally, Teel+Co introduced a local HR management system that automated payroll processing and streamlined reporting, enhancing the overall efficiency of U.S. workforce management.
7. Enhancing Operational Efficiency and Decision-Making
To improve operational inefficiencies, Teel+Co standardized workflows and introduced process automation tools, reducing manual effort and enhancing operational efficiency. They developed a comprehensive operations manual that outlined standardized procedures, enabling faster decision-making and greater consistency across departments. Furthermore, by implementing real-time data-driven dashboards, Teel+Co empowered management with the insights needed to make timely, informed decisions.
8. Integrating Technology for Scalable Growth
Finally, in addressing technology systems and applications, Teel+Co helped the company navigate the complex U.S. payroll environment by implementing a payroll management solution capable of handling multi-jurisdictional tax calculations and ensuring compliance with U.S. payroll tax regulations. They also integrated the local systems with the company’s global ERP platform, eliminating data silos and providing group management with real-time access to U.S. operational data. Through ongoing technology consulting, Teel+Co ensured that the company’s systems remained scalable and optimized for future growth.
The Results
With Teel+Co’s strategic partnership, the company successfully overcame the complex challenges of U.S. market entry and achieved key operational, financial, and compliance milestones. By addressing banking inefficiencies, tax compliance complexities, and operational silos, Teel+Co delivered measurable improvements across multiple areas of the business:
Improved Cash Flow Oversight and Treasury Management
The centralized treasury management system provided real-time visibility into U.S. cash positions for the group finance team, enhancing liquidity control and cash flow forecasting. As a result, cross-border cash management became seamless, with fewer delays in internal approvals and funding. This improvement in cash flow stability allowed the company to reinvest in strategic growth initiatives.
Reduced Tax Compliance Risks and Costs
With a structured tax compliance calendar and proactive tax management, the company achieved timely and accurate filings across 14 states, avoiding costly penalties and late fees. Teel+Co’s integrated controllership and tax services resulted in a 30% reduction in annual tax compliance fees. Additionally, Teel+Co’s comprehensive tax strategy and reviews identified opportunities to reduce overall tax liabilities, further improving the company’s financial performance.
Accelerated Receivables Collection and Improved Cash Flow
By implementing a localized accounts receivable management process, Teel+Co helped reduce overdue receivables over 90 days by 40% within six months. Improved reporting and dedicated follow-up on outstanding balances enabled faster collections and better cash flow stability. This allowed the company to allocate resources more effectively and strengthen its financial position in the U.S. market.
Enduring Compliance Across All Fronts
Teel+Co’s tailored compliance framework ensured adherence to U.S. financial and labor regulations, significantly reducing legal and operational risks. The implementation of a local HR management system streamlined payroll processing and benefits administration, ensuring ongoing compliance with complex multi-jurisdictional payroll tax requirements.
Improved Cross-Border Reporting and Financial Integration
Teel+Co’s implementation of a dual IFRS/U.S. GAAP-compliant reporting system and automated financial consolidation tools enabled timely, accurate, and transparent reporting for both internal and external stakeholders. This harmonized approach to financial reporting improved coordination between U.S. and Australian teams, resulting in more efficient cross-border operations and enhanced financial clarity for management.
Driving Efficiency and Reducing Overhead
Through process optimization and the introduction of automation tools, the company achieved a 25% reduction in administrative overhead and faster turnaround times for financial reporting and decision-making. Standardized workflows improved internal efficiency and enhanced service delivery to clients, contributing to better operational performance overall.
Strengthened Management Control Through Technology Integration
By integrating U.S. systems with the company’s global ERP platform, Teel+Co eliminated operational silos and provided real-time access for group management. This integration enabled better decision-making and provided a scalable foundation for future growth, ensuring operational continuity across both regions.
Stabilized U.S. Workforce Management
Teel+Co’s clear HR policies and compliant payroll system provided a stable foundation for workforce management in the U.S. Improved processes and automation reduced the administrative burden on management, allowing leadership to focus on strategic growth initiatives rather than day-to-day HR tasks.
Teel+Co’s holistic, integrated approach helped Reef Risk Group not only meet immediate operational needs but also establish a robust foundation for long-term success in the U.S. financial services market. By fostering operational stability, enhancing financial clarity, and ensuring full compliance, Teel+Co empowered the company to sustain its rapid growth trajectory and maintain a competitive edge in a highly regulated industry.
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In presenting this case study, we are committed to upholding the confidentiality and privacy of our clients. To protect their identity and proprietary information, we have altered certain details, including names, locations, and specific financial data. These changes are solely intended to preserve anonymity and do not impact the accuracy or substance of the case study. Our modifications ensure compliance with our confidentiality agreement and safeguard our client’s business interests.
