Audits became a regulatory requirement for many companies starting in the mid-1930s, and while there have been improvements on auditing procedures over time, technology hasn’t caught up. Enter: AuditMiner.
The Concept
The company’s initial prototype allows auditors to upload large raw data files received from 401(k) service providers. Then, the software extracts and organizes the data to produce audit working papers that are pre-populated with all necessary requirements and data needed to complete a successful audit. The process saves 10-20 hours on average, per 401(k) audit engagement.
AuditMiner officially launched in spring of this year. Founded by CEO Kelly Mann and CTO Jason Bogner, the team started with six people. In the first four months, the team was able to provide service for customers in 25 states around the country.
Strategic Growth
Mann noted that who they hire and how they build relationships is a big part of the company’s growth strategy.
“AuditMiner is very customer-led in our growth,” she said. “This includes how we hire. The individuals hired for sales, product, etc. don’t have the typical software experience for that role.
“For example, our sales individual is actually a retired paralegal. This is helpful because she is used to working with professionals (lawyers), who are very similar to CPAs. Our team member in product is an individual who has been auditing 401(k) plans for the past five years for a firm out of Chicago. She brings a unique perspective that you can only get from someone who has experience auditing these plans. So, when bringing on team members, we look for someone who can relate to our customers, who can think like them, who can build relationships with them.”
Bump in the Road
As with any business, there are challenges that come. In April 2020, Mann was diagnosed with stage 3 breast cancer, when the company was only six months old. The company was set to receive its first investment from an outside party, but given the uncertainty of the diagnosis, they decided to forego the investment. Mann tackled her diagnosis, undergoing 17 months of chemotherapy and multiple surgeries. Despite it all, she and her team have navigated these challenging waters.
“The company managed to continue forward, although at a slower pace, during treatment,” Mann said.
Bright Things Ahead
When it comes to the future of AuditMiner, Mann sees opportunities on the horizon. Recently, AuditMiner took an investment from Proven Ventures. Through the partnership, they have implemented a national sales campaign, allowing them to identify and measure qualitative metrics and source local leads for the company. Currently, there are about 5,000 public accounting firms that have issued 401(k) audit reports. Mann noted that there has been a significant increase in mergers and acquisitions among firms, which bodes well for her company.
“This trend is due not only to an aging CPA population but also because of the extensive number of regulatory changes and the significant investment required by firms for technology infrastructure and risk management,” she said. “This translates into opportunity for AuditMiner. As the number of 401(k) audits within a practice grows, whether, through consolidation or increased client demand, the need for standardization and streamlined processes increases, as it does with any organization that is needing to scale operations.”
Another future goal is to integrate more service providers into the platform, which will directly increase the number of 401(k) audits that AuditMiner is able to streamline.
The company is also working on moving the software to the cloud so it can scale faster.
“If we look back to how we are unique, one might say that we are upskilling the next generation tech worker,” Mann said. “We are identifying great talent … and inserting them into our growing tech talent pool. I hope to showcase how to build high-growth, scalable businesses without the volatility of traditional ventures. Perhaps it is the CPA in me, but I think that you can still build a business with old-school fundamentals like positive cash flow, customers, and revenue.”
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