In order to share financial best practices and technological innovations, 8020 Consulting is conducting a series of Customer Spotlights. These clients have demonstrated excellence and forward thinking in their use of financial technology and their implementation of efficient, scalable processes.
It’s an all-too-common problem among fast-growing companies: They use whatever tools they can to create customers and generate repeat business, but they fail to appropriately scale their backend systems. Without the right financial systems and other technologies to support the influx of customers, contractors and vendors, their financial workflows slow to a snail’s pace – and growth eventually comes to a halt.
Not every firm fails to plan, however. 8020 Consulting client Studio 71 has reaped the benefits of proactively adopting scalable software and workflows. “They’re using technology to eliminate barriers to growth before those barriers become obstacles,” said 8020 Consulting CEO David Lewis.
Studio 71, a multi-platform entertainment company, produces, distributes and monetizes digital content for a diverse and growing set of third-party creators. Their client list includes Epic Meal Time, Rhett & Link and roughly 1,500 other well-known creators, and they distribute content across more than 30 networks, including YouTube, Hulu and NetFlix.
Each of those creators’ media channels generates revenue according to a variety of conditions, which depend upon their own relationships with the content networks. Some are paid per stream or download, others receive click-based ad revenue and others still receive donations from viewers. It’s up to Studio 71 to ensure they’re all paid appropriately.
“We used to do everything manually through Excel,” said Jordan Toplitzky, Studio 71’s CFO. “New content creators would sign on, and we had to figure out how they got there and how to account for the revenue from all of their existing content.” At a time when Studio 71 was still supporting just 500 content creators, their payment process took roughly 30 days.
Now, with three times as many contractors to account for, they’re processing payments within two weeks. The key to streamlining their operation has been PluraVida Atmosphere, a data management tool designed specifically for digital content settlement. Atmosphere combines content creators’ personal data with incoming information from media channels, advertising platforms, donation services and other sources of revenue. The end result is an integration with their ERP that gives Studio 71 a streamlined workflow and valuable insight into receivables and payables for every client.
The new payment process begins when content creators sign their contracts and W9s, which are stored in the company’s Salesforce database. Those details are loaded into the PluraVida platform, which in turn produces an accounting file compatible with Microsoft Dynamics GP. Finally, Dynamics generates a payables batch that Studio 71’s bank uses to issue payments to the creators. “It really puts everything together to give us a neat picture of our accounting and what we have to pay,” said Toplitzky.
Atmosphere also creates financial statements for the creators, which itemize their revenue from each revenue generating asset (e.g., videos and music) and media channel. While Studio 71 originally viewed these statements as a helpful add-on, they’ve become an integral part of their contractor relationships. “Our creators have come to look at these statements as bank statements. If something’s not on the statement, it didn’t happen,” said Toplitzky. “There’s a lot that goes into attracting and retaining content creators, and having reliable financial statements and payments is a huge part of that.” By eliminating a barrier to growth – a bogged-down payments process – Studio 71 has done more than create greater scalability. They’ve provided for even faster growth and client acquisition.
8020 consultants have provided Studio 71 with due diligence support, expense management software implementation and budgetary assistance. 8020 Consulting also staffed Studio 71 with an interim controller to help manage financial operations during the company’s rapid expansion.