Case Study: Legendary Restaurant Group

Overview
Legendary Restaurant Group (Legendary) was founded in 2004 when two industry veterans decided to use their collective knowledge to open and operate restaurants in the Boston area. The company now operates six restaurants, as well as a successful catering company, and is projecting even further growth in the future, despite an uncertain economy.

Background
As a growing company with multiple restaurants and plans to open a new venture, Legendary felt they were in danger of outgrowing their existing accounting firm, internal bookkeeper and overall finance platform. They were also concerned about the scalability of their financial processes. Their year-end tax information was usually delivered right before the filing deadline and often contained surprising data due to the lack of clean financial information and visibility into their overall finance function.

They realized that in order to successfully launch a new restaurant operation, in addition to managing their current operations, they needed access to real-time data. Because they were growing and expanding during an economic low-point, they were particularly concerned about the risks associated with opening a new business and needed confidence in their financials.

They had previously employed a part-time bookkeeper, but they ultimately decided it was not a good long-term model for the company. They were not certain whether they had cash available to fund daily operations in addition to costs associated with launching a new location. The company wanted better management of their finances and sought a partner that could assist with their finance, tax and accounting functions, as well as provide overall strategic advisory services for their business.

Project
After building a relationship with the Legendary ownership team, McGladrey suggested a Rapid Assessment^®that would focus on evaluating their back-office functions. The McGladrey team proposed that the Rapid Assessment methodology could help identify more streamlined and automated financial reporting solutions.

The Rapid Assessment began with a quick-hit discovery evaluation of their current accounting processes and systems, as well as the financial reporting needs of ownership in order to manage daily operations and cash flow. After reviewing the data collected during the discovery phase, the McGladrey team presented several different options and various recommendations that would allow the company to scale their processes and better support their growing operations.

One key recommendation was migrating their finance and back-office functions to McGladrey's business process outsourcing (BPO) platform. McGladrey worked closely with Legendary to determine the back-office needs that could be outsourced to the financial experts on the BPO team. Because McGladrey's BPO platform is based on a Software-as-a-Service (SaaS) ecosystem, all systems are integrated on one platform.

As a result, Bill.com, an automated bill pay solution, allows Legendary to process bills electronically, and eliminates the need to re-key invoices. Invoices can be scanned into an electronic format, streamlining the accounts payable process. Bills can be approved by leadership from any location—whether they are on-site at the restaurant or in the main office. It also eliminates a large amount of unnecessary paper. Now Bill.com ports information directly into their accounting system, eliminating the need to manually process payables.

Intacct, a SaaS-based ERP system, allows for leadership to have real-time access to financial information. The entire BPO solution, based on the Intacct platform, facilitates a much cleaner, efficient tax planning and preparation process. This is critical for the growing company, as it is easier to make effective business decisions. The new system provides management with detailed information about each restaurant operation and helps them determine a strategy for continued improvement.

Outcomes
In the two years following the Rapid Assessment, Legendary opened two additional restaurants and has plans for more in the future. With more robust, accessible and credible financial information, the company has been able to continue their growth in a time when many businesses are scaling back operations. The assessment and subsequent BPO engagement have provided additional functionality between their restaurant operations, as well as critical guidance and advance notice on accruing tax obligations. The company now has full confidence in the financial state of their business.

McGladrey's BPO team has significantly enhanced the way that Legendary leverages technology. There are many firms that can help with back-office functions, but by delivering a technology-driven solution that integrates applications across all business functions, McGladrey has helped Legendary save time and money while positioning the company for future growth. Other results of the engagement included:

• Approving and paying bills remotely through a cloud-based application
• Alleviating breakdowns and bottlenecks to critical business processes
• Enhancing budgeting and planning capabilities
• Producing reliable real-time financial information
• Accessing better data to plan and project from a tax liability perspective
• Allowing leadership to focus on their core business instead of back-office functions
• Scaling of back-office resources as growth dictates

Thanks to the renewed strength in their operations, Legendary was selected as the 2012 Restaurateurs of the Year by the Massachusetts Restaurant Association.

They said it
"We are extremely pleased with the solutions that McGladrey has provided for our company. They quickly identified issues within our operations and effectively implemented technology solutions to streamline our financial processes and restore confidence in our finances. We can now make more assertive decisions, which is critical for a growing company."