Project Overview
The client is a global leader in the security space with $60M in annual revenue. With manufacturing facilities in Europe and operations across the United States, including key facilities in California, the company serves diverse customers including professional sports venues, military organizations, airports, and correctional facilities.
As a private company that had progressed through Series C funding – typical of California’s fast-growing technology sector – the client faced critical financial infrastructure challenges across four subsidiaries operating on disparate accounting systems.
Like many innovative California-based companies scaling rapidly in emerging technology markets, the organization needed sophisticated financial systems to support complex international operations and prepare for institutional investment or acquisition opportunities.
DLC was engaged to address multiple competing priorities: implementing a unified ERP system, completing the company’s first audit, and ensuring compliance with key accounting standards – all while supporting the company’s eventual acquisition by a major technology corporation.
Business Challenge
The client’s rapid growth and complex multi-subsidiary structure created significant operational and compliance challenges – common among California’s innovative technology companies that scale quickly across international markets.
The company’s four entities operated on separate accounting platforms, making consolidated reporting extremely difficult and time-consuming.
The situation was compounded by a very lean finance staff managing multiple critical priorities simultaneously, reflecting the resource constraints often faced by high-growth California technology companies focused on product development and market expansion.
The company had never completed a formal audit despite being at an advanced funding stage, creating potential barriers for future growth and acquisition opportunities. This challenge is particularly common for California-based companies in emerging technology sectors, where institutional investors and acquirers increasingly demand robust financial controls and audit-ready processes.
Additionally, a recent acquisition required ASC 805 business combination accounting, while the company needed to adopt multiple accounting standards including ASC 842 (lease accounting), ASC 718 (stock-based compensation), and ASC 606 (revenue recognition).
The complexity was further heightened by international operations requiring foreign currency translation from Euro to USD, transfer pricing considerations, and coordination across multiple time zones and languages for audit support – typical challenges for California companies with global operations and manufacturing footprints.
The Approach
DLC implemented a comprehensive, multi-phase approach to address the client’s competing priorities while maintaining business continuity:
Phase 1: NetSuite Implementation Foundation
- Designed consolidation structure for four subsidiaries with automated rollups
- Established base currency, source currency, and exchange rate configurations
- Created comprehensive GL mapping to ensure seamless data transition
- Implemented multibook functionality for international subsidiary
- Configured consolidation eliminations and cumulative translation adjustments
Phase 2: System Testing and Validation
- Uploaded historical monthly trial balances starting in sandbox environment
- Validated data integrity by ensuring trial balances tied directly to legacy systems
- Executed year-end close procedures including consolidations, eliminations, and translation adjustments
- Transitioned validated sandbox to production environment
Phase 3: Audit Preparation and Execution
- Created consolidated trial balance from four disparate accounting systems
- Implemented currency translation for balance sheet and income statement accounts
- Established intercompany eliminations and consolidation procedures
- Adopted multiple accounting standards (ASC 718, ASC 842, ASC 805, ASC 606)
- Coordinated extensive audit support across US and German operations
- Managed PBC list testing and audit walkthrough coordination
Phase 4: Go-Live and Acquisition Support
- Completed NetSuite implementation with full inventory module integration
- Finalized tax provisions for US and European entities including transfer pricing
- Supported acquisition due diligence with detailed quarterly and annual financial analysis
- Created comprehensive flux analysis and account reconciliations
- Completed financials in NetSuite to support acquisition timeline
The Results
DLC successfully delivered on all critical objectives, enabling the client to achieve major business milestones:
- NetSuite went live with a full integration across all subsidiaries, achieving unified financial reporting with automated consolidations, eliminations, and currency translations while substantially increasing data integrity and operational efficiency.
- Successfully completed their first-ever 2-year audit, meeting critical acquisition requirements, and achieving full compliance with multiple accounting standards.
- Supported a comprehensive due diligence process with detailed financial analysis, quarterly flux analysis, and extensive account reconciliations, enabling successful acquisition completion.
- Eliminated manual consolidation processes across four subsidiaries, streamlined international operations with automated currency translation, and established scalable financial infrastructure positioning the company for continued success in California’s competitive technology landscape.
