Can an Outsourced CFO or Controller Support Your Portfolio Companies?

If you’re a small investment fund, family office, private equity firm, or venture capital fund, you may think your portfolio companies can operate without a CFO or Controller. However, this isIf you’re a small investment fund, family office, private equity firm, or venture capital fund, you may think your portfolio companies can operate without a CFO or Controller. However, this is not the case!n’t the case! Each investment is important. If one goes belly up, it can significantly impact your finances. 

A CFO or Controller can ensure your portfolio company has the proper oversight that contributes to the growth and financial success of your organization. These individuals can solve key issues including filling a financial executive vacancy, improving your finance department, or closing the gap when a previous CFO or Controller has left. 

What is a Fractional or Interim CFO/Controller?

A CFO is an individual responsible for managing the forward-looking financial activities of a company. This financial executive tracks cash flow, financial planning, and developing solutions to financial issues. They can also help analyze the financial strengths and weaknesses of a company. These activities can be done on an interim basis (short-term from a few weeks to a few months) or a fractional basis (part-time for an extended period of time).

A Controller is an individual who has responsibility for all current and historical accounting-related activities. This may include GAAP/IFRS financial reporting, managerial accounting, audit management, or other related tasks within a company. These activities can also be done on an interim or fractional basis as well.

These roles can be tailored according to your portfolio company’s needs. By utilizing an outsourced advisor, you will be avoiding costly payroll taxes and employee benefits costs that eat into your bottom line. Continue reading to learn how these roles can benefit your company.

Scenario #1: Augmenting the Financial Function for a New Investment

Let’s say that you’ve just onboarded a new company to your portfolio. There are several financial issues that you’ve identified. The financial function is lacking and there are either not enough people or the roles that are filled are filled by people who need more guidance to do their role properly. In this instance, a lot can be done by a Fractional or Interim Controller. Here’s how a Controller can help support your portfolio:

  • Step in as a temporary resource, ensuring tasks are completed timely and with high levels of precision
  • Complete the necessary financial tasks on an as-needed basis
  • Alleviate the time pressure associated with hiring new employees, giving you time to find the perfect fit for your fund
  • Produce relevant, timely, and accurate reports that your portfolio management team truly needs
  • Define operational and financial goals, giving everyone on your team clear benchmarks to work toward
  • Introduce best practices to improve processes and related efficiency
  • Onboard and train your new executive once they have joined the company

Scenario #2: Improving the Accounting & Finance Department

Another way a Controller can help your portfolio company is when there are training and performance issues that need to be improved or corrected. If your portfolio company has been operating without a financial executive for some time, or with more junior staff, you may notice the department has plateaued in regards to constantly improving and reaching goals. You have a great team, but none of them have the expertise required to step into a leadership role just yet. You also need someone to give direction, oversee the team, develop your staff, and ensure everyone has what they need to succeed. Here’s how a Controller can help: 

  • Establish processes according to business goals that the team can be guided by
  • Train existing employees on the financial procedures and how their particular role operates within the company
  • Maximize efficiency and employee productivity with transparency into expected duties, timelines, and goals
  • Provide continuing education when new regulations and guidelines are released, ensuring compliance with regulatory agencies and internal protocol
  • Give your employees an expert to turn to with any questions or issues that arise with day-to-day activities

Scenario #3: Filling a Temporary Gap

Lastly, you have a company that has been a part of your portfolio for a while now. The financial team in place has been keeping things running smoothly but your CFO recently left or is getting ready to exit. You want the company to continue on the track they have been on. If this is the case, an Interim CFO/Controller will be beneficial in fulfilling the financial role on an interim basis. This interim resource can help in the following ways:

  • Step in quickly (5-10 days) and pick up right where your last executive left off
  • Ensure the financials are accurate and up to date, giving you tangible information to make high-quality, informed decisions
  • Review your company’s existing financial systems and procedures and make recommendations for efficiencies and improvements
  • Provide existing team members with a clear communication channel, freeing up time in your busy schedule
  • Help throughout the hiring process, participating in interviews process and providing technical guidance on which individual will work best for your team
  • Consult your business on where changes may be needed in operations and financial performance

How Can We Help?

Sabre Financial Group understands the positive impact that a CFO or Controller can have on your investment firm. Each portfolio company matters and should have the right resources in place to reduce risks and to ensure success and a strong return on your investment. Our services are tailored to your needs; whether you need a part-time financial professional for a long period of time or an individual to help full-time for just a few months, we’re able to meet your needs. Reach out today to schedule a consultation to go over how our fractional or interim CFO and Controller services can help to support and protect your portfolio.

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