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Six Benefits of Outsourced Equity Management

by Scott Schwartz
November 11, 2014

There are many good reasons for outsourced equity management. Here are the top six ways outsourcing can benefit your organization.

  1. Tax-Related Expertise: As exciting as tax law is, the depth of the subject can be a bit daunting. By outsourcing the management of your organization's equity issuances, you can depend on a specialist to focus on the nuances and proper treatment of your tax reporting. This will help ensure your company files in a timely and accurate manner.
  2. Accurate Expense: A transition from manual expense calculations to a system-based calculation will often lead to the discovery of inaccurate historical expense. The process of converting to systematic stock-based compensation expense reporting provides you the opportunity to not only mirror historical data and assumptions, but more importantly, also allows you to reassess past expenses and make corrections. This leads to the third benefit – a new perspective.
  3. New Perspective: A common accounting mistake is depending on previously established processes to calculate/assess current expense. Things change from year to year, and so must the valuation of equity. Allowing a fresh pair of eyes to review, value and calculate expense will help keep details up to date.
  4. Time Management: Utilizing a specialist allows your organization to focus on more pressing day-to-day operations. Third-party management teams tend to invest more in research and methodology development to enhance services, so your organization reaps these benefits without spending time or money on additional research and education.
  5. Cost Efficiency: Though there are initial costs with outsourcing equity management, the financial benefits of outsourcing are proven quickly. You save tremendous resources by eliminating the need to train internal staff on management systems and negating the need to keep up with the constant changes in tax treatment.
  6. Peace of Mind: Outsourcing provides the comfort of knowing that all equity-related work will be done on time and accurately. Investing in outsourced equity management to improve operational efficiency helps avoid unnecessary expenses and fines associated with missed reporting deadlines.

Check out Armanino's equity management solutions including EASi, a cloud equity administration solution.

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