This article is based on a presentation done at the June 2023 NACVA conference at Snowbird, Utah by Steve Bruner and David Fein.
Valuators often grapple with the choice between utilizing valuation software or using Excel and Word to perform valuations. At the recent 2023 NACVA conference, seasoned business valuation expert Steven Brunner, who has relied on ValuSource valuation software since 2001, teamed up with David Fein, the CEO of ValuSource. Together, they discussed and demonstrated ValuSource’s valuation software to show the specifics of how valuation software can benefit valuators.
How Steve Got Started with ValuSource Valuation Software
Steve has been involved in valuations for over 22 years. In 2001, Steve was first introduced to ValuSource software. In 2012, Steve transitioned to a role as an auditor within a 150-employee firm. Despite his auditing responsibilities, his background in valuations meant that he began to focus more on the valuation arm of the firm. This gave Steve the opportunity to develop an in-depth understanding of ValuSource software and create his own templates.
Throughout the past twelve years, various valuation software companies approached Steve offering him alternatives. However, none of them have been able to rival the comprehensive functionality and degree of customization offered by ValuSource.
Customization and Transparency
Steve says the most important difference between ValuSource software and other valuation software is the level of customization it offers right out of the box. Each step of the valuation process can be customized so you can structure your approach according to your valuation practice. There are endless analysis options and presentation formats, plus you can insert your own Excel worksheets and DCFs for proprietary calculations for complex engagement.
The software includes financial statements, adjustments, analysis, the income, asset, and market approaches, database integration and a report writer. Most practitioners don’t have the time to develop and maintain such a comprehensive valuation model in Excel.
Since each step of the valuation process is completely transparent and the user has the flexibility to go back and easily make changes to both the analysis and the report. If a change is made, it ripples through the valuation and the report. The software also provides an easy database interface to find the data you need and download it directly into the software. Steve especially likes the fact that when he inserts a custom Excel table into Word, the formatting is done seamlessly and it’s easy to edit, resize tables and change fonts.
ValuSource software comes with a comprehensive customizable report template, or you can import your firm’s existing report to create a template. The report writer creates a draft report by inserting hundreds of numbers, tables, and charts into the report while the optional content feature removes irrelevant sections of the report. If the data in the analysis ever changes, the report is automatically kept in sync.
David added that since each engagement is unique, it is essential that valuation software be flexible and fully customizable. By using the software to automate the valuation process, valuators can quickly progress to the analysis phase where they can really flex their expertise. The process is also fully transparent so it’s easy to see inputs, calculations, and outputs, make edits and test scenarios.
Quality control and consistency
Designed for valuation professionals, software enhances the efficiency of performing valuations, streamlining the process, and expediting workflows, all while ensuring the production of accurate and high-quality valuation results—without limiting the valuation professional’s ability to apply their expertise and judgment throughout the process.
Since ValuSource’s has been developing valuation software for almost four decades and has a substantial user base of seasoned valuation professionals, the software is robust and is constantly being tested and enhanced. Moreover, it’s easy for complex valuation spreadsheets to contain errors, but using valuation software that goes through a development process, quality control and is used in the file, makes errors much less likely to occur.
Before Steve began using ValuSource software, there were multiple CVAs in his firm each using their own method which ranged from their own Excel models to doing it by hand. Once Steve and his team started using the software, they were able to standardize the valuation process across the team to improve efficiencies and ensure consistency so they can shift their focus to applying their expertise rather than wasting energy on checking their calculations.
David mentioned that in practices where valuators are sharing Excel models and Word documents, the more edits are made, the more chance files can become corrupt, making it almost impossible to have a sound quality control process that ensures continuity, consistency, and quality control. Valuation software significantly helps in these areas, for both sole practitioners as well as firms with multiple valuations and/or locations.
Software as a training tool
For those who are new to valuation, valuation software is also a great training tool. Much like tax software, someone who is still learning can start inputting data and the software will guide them through a best-practice step-by-step approach. An experienced valuator can then review the inputs, assumptions, and conclusions and provide feedback. In firms that need to train new staff in valuation, using software as part of the training process can be very effective.
Time Saving and Affordability
Besides general efficiency and accuracy, one of the biggest benefits of using valuation software is saving time. Steve says when he compared their old manual Excel and Word process to ValuSource software, he found the time savings was at least 10 to 20%. If most valuations take between 20 and 40 hours, the time savings are significant.
David says one way to look at the cost of the software is to see how many hours at your billable rate it would take to pay for the software. In most cases, it will only take 3 to 4 billable hours to cover the cost of the software. Another perspective is to estimate how many hours per engagement and per year you spend building and maintaining your own spreadsheets. Like most valuators, you probably are spending more time on this than you think! The bottom line is that the software pays for itself very quickly.
More Valuations in Less Time
Since the software follows standard valuation processes and methodologies, instead of building and maintaining complex valuation spreadsheets, valuators can use their template over and over.
By freeing up time from manual tasks, you can allocate more of your energy and expertise to critical analysis and decision-making. You can focus on interpreting the results, conducting in-depth research, examining industry trends, assessing market conditions, and identifying key value drivers specific to the business being valued. This allows you to delve deeper into the nuances of the business and gain a more comprehensive understanding of its value. . . and produce more valuations in less time.
About Steve Brunner, CPA, CVA, MAFF
Steve Brunner is a partner in Liske & Brunner CPAs LLC. His practice focuses on valuations for estate & gift, succession planning, family limited partnerships, divorce and shareholder disputes. He also provides outsourced CFO and tax services. He has been practicing public accounting for 27 years. He enjoys playing guitar, working out, riding motorcycles and spending time with family. He is celebrating his 25th year of marriage to his wife Amy and has two daughters, Marissa (22) and Staylie (19), who are both in college.
About David Fein MBA
David Fein, ValuSource CEO. David is an adventurer and entrepreneur. At 16 he became the 2nd youngest person to set foot on the South Pole, built and ran a sailboat charter company, and co-founded a private school. In 1986 he co-founded ValuSource which produces the #1 bestselling business valuation and economic damages calculation software. David is co-founder and head elf for www.thechristmastreeproject.org, which was featured on CBS national news and the Kelly Clarkson Show. David co-founded Lessons from the Stage Behind Bars, a high-impact theater-based life skills program for prison inmates. David has a bachelor’s degree in computer science and an MBA. His mission is to cultivate both personal and professional excellence through the art of business.