Before Kranz
- Limited visibility
- Outdated books
After Kranz
- Integrated services for all client entities
- Effective general ledger & crypto ledger systems
- Structured accounting & optimal reporting
- Transparency & visibility into accounting function
- Established budgets & enhanced spending control
Overview
A Decentralized Autonomous Organization (DAO) engaged Kranz to assist in establishing a well-functioning finance and accounting operation. Decentralized Autonomous Organizations (DAOs) operate without central authority, relying on member-driven governance. Members, holding DAO tokens, vote on organizational actions. Committees were formed to govern this DAO, with some members responsible for the accounting.
Business Challenge
Due to a lack of in-house expertise, the newly formed DAO required assistance in updating its books and implementing systems and processes for enhanced financial visibility.
When Kranz stepped in to help, the books were outdated and crypto was managed through spreadsheets. Kranz consultants formulated a project plan to update the books, improve financial visibility, and implement spending controls.
Approach
Upon reviewing the DAO’s charter and fund flow, Kranz Consulting identified risks and advised the client to reduce the number of bank accounts and member access. Simultaneously, the Kranz team evaluated the crypto transactions and implemented a crypto ledger system to accurately account for DAO transactions. Next, Kranz’s digital assets and venture fund administration teams worked together to close the first year’s books, collaborate with tax advisors, and help optimize the client’s tax structure.
The assigned Kranz CFO worked with the client to wind down unused entities and establish budgets for committees, providing strategic direction and better spending visibility. The project was managed with weekly update meetings, crucial for aligning timelines and prioritizing tasks across the executing team.
Results
Kranz’s collaborative effort enabled the client to establish a well-run accounting and finance function across multiple entities, offering enhanced visibility and control. Beyond day-to-day accounting, Kranz’s CFOs provided crucial strategic guidance on consolidating entities, tax planning, and committee budgeting, further enhancing financial visibility and spending control.