On-Site Financial

October 26, 2003

Excerpted from The Business Journal, Portland, Oregon, Volume 20, Number 20.

ON-SITE FINANCIAL NEVER FULLY TIED ITS FORTUNES TO PORTLAND'S HIGH-TECH INDUSTRY

Formed in 1995, On-Site Financial began as a catch-all provider of accounting services. That generally involved performing one-time accounting projects for corporate clients and performing financial services that recurred on a monthly or quarterly basis. On-Site generally complemented, rather than competed with, certified public accounting firms, as it didn't perform audits and didn't prepare corporate tax returns.

In response to the [tech] decline of 2000, Heath and the other principals--Dana Alexander Boothby and Craig Stack--laid some plans. On the services front, On-Site began offering consulting on topics as broad as rewriting a business plan or as narrow as what type of computerized financial systems to use.

Also, the firm went into the job placement business, recruiting accountants for placement as temporary or permanent employees with its clients--a function that Heath calls staff augmentation. For temporary assignment, the placed person remains an employee of On-Site, but works daily at the client's office.

On-Site now stands as the only Portland firm that offers consulting, staff augmentation and recurring financial services, although competition exists to fill any of those needs. On the marketing front, On-Site hired marketing specialists in order to attract more clients, including mid- and large-sized companies. Of the four business development positions at the firm, one is devoted solely to working with the 100 largest companies in the Portland area. As a result, On-Site has done work for Nike Inc., StanCorp Financial Group Inc., FEI Co. and Merant PLC, among other notables.

"On-site brings both functionality and a mind set toward process improvement," said Brian Unruh, Merant vice president for finance, who has basically outsourced all of Merant's accounting for its North American and Asia-Pacific operations to On-Site. The same five accountants arrive at Merant every day to do the work, but remain employees of On-Site.

"As opposed to temporary clerks, the On-Site employees have the experience to not only perform the basic jobs but to keep suggesting ways of improving processes," Unruh said. "Overall, outsourcing is a more cost-efficient approach at this time for Merant."

"We've always been a referral-based business, getting referrals from bankers, lawyers and CPA firms," Heath said. "We added sales ability to help us control our own destiny." Even larger companies have some recurring accounting needs they'd rather outsource, Heath said. Those include accounting for fixed assets, in regard to depreciation and reconciling them on the books, and reporting sales and use tax results to various taxing jurisdictions in which they do business.

Finally, on the financing front, On-Site obtained early this year a $200,000 financing package that included loans from ShoreBank Pacific and the Portland Development Commission. On-Site used the funding to pay for the more aggressive sales and marketing efforts and also to improve its own computer systems.