Fractional CFO - Standard Engagement Analysis
Discovery Phase
Meet with the Business owner – Have a detailed discussion about the business and the industry that they operate in. Discuss the resources that the company currently has and the resources that the company requires to grow their business.
Review the Financial structure of the business. What internal controls and processes are currently in place? Which individual is responsible to ensure that each function is completed?
Review the internal systems and accounting software that the company uses? Understand the integration that the accounting software has with other internal systems?
Review the cost structure of the business to identify any synergies or cost savings.
Review the payment processing procedures to determine how the company is managing their chargeback risk.
Review all current Insurance policies and employee benefit plans.
Review the tax liability that the client has and ensure they are timely with all obligations. Focus on state and local issues where the company has Nexus.
Review the Finance departments outsourced partners. Which firm is the outside CPA for Audit / Tax? Which bank does the firm work with? Who is the broker who handles all of the insurance products? Who is the investment plan advisor? Which firm processes payroll? Where does the firm outsource merchant processing?
Implement Improvements Phase
Develop a standard monthly reporting package that will provide the business owner with a scorecard to operate their business. Include detailed revenue analysis and Gross Margin metrics. Provide a detailed understanding of industry metrics and how the company tracks to the metrics.
Ensure that the proper controls and processes are in place to drive efficiencies in the business and to safeguard assets and prevent fraud.
Make recommendations on adjusting the finance outsource business network. Determine if the firm can be aligned with a better outside partner.
Make recommendations on benefit plan improvements,
Make recommendations on business insurance plan improvements,
Implement all cost structure reductions.
Implement process changes to minimize payment processing financial risk in the company.
Planning Growth Phase
Prepare a yearly operating budget. Develop weekly and monthly operating metrics that will act as a guide to adhere to the budget.
Develop a 2 to 3-year projection model based on revenue assumptions that will forecast profitability and cash flow.
Develop a monthly Client / Customer package that will provide detailed customer level date analyzing the revenue per client and the gross margin per client.
Develop a sales growth strategy with accurate pipeline forecasting. Discuss internal growth vs acquisition options. Perform adequate due diligence on acquisition candidates. Provide a “Quality of Earnings”
Raise capital through traditional banking, Venture Capital or Private Equity.
Maximize Value and position the company for an exit
Determine the value of the business using internal data vs recent sale transactions in the industry. Engage an outside firm for a 409 valuation if necessary.
Prepare the company to be due diligence ready. Develop a data room for information that an acquirer would need to review upon a Letter of Intent. Examples are audits, tax returns, historical sales data per client, current client contracts, Historical payroll costs per employee and current obligations of the company.
Develop a database of potential acquirers and make introductions through our network.