The need for a qualified and experienced chief financial officer is no longer limited to rapidly growing companies, but also extends to high net worth individuals and families. The skills needed for financial management of a growing enterprise and a single family office usually overlap.
Often the single family office manages the operations of one to several businesses jointly owned within a family structure. Whether as a stand-alone business or as a member of an affiliated family group of businesses, high-level sophisticated accounting and finance expertise is required to not only protect assets but to accelerate growth and ensure multi-generational liquidity.
We provide fractional chief financial officer services and back-office accounting to companies and high net worth individuals and family groups. Sometimes the rapidly growing business is not yet at the size to sustain a full-time senior level executive employee. At other times, we are contacted to assist in the financial management of a crisis situation due to the sudden exit of the key employee due to division divestiture, employee death or sudden retirement, or discovered defalcations. In some other circumstances, outside lenders and investors may require interim financial and accounting oversight.
An experienced fractional chief financial officer is critical in the following scenarios:
Preparing for an exit or transaction
A fractional chief financial officer is critically necessary when selling your company or preparing for a major acquisition. The due diligence process is unique, exacting, and time-consuming. Many companies are simply unprepared for the institutional demands and requirements. Having an experienced hand available is critical to success.
Most small to mid-size businesses struggle with having meaningful and reliable accounting and financial metrics in place. The fractional chief financial officer can work with the owner and department heads to structure a forward-looking picture of the business that is rational and instills discipline and feedback with a view to enhancing business and departmental profitability.
Management of commercial and asset-based lenders, vendors, equity investors, and other stakeholders is critically important throughout the year, not just at compliance testing time. Making stakeholders business partners through frequent communication is the hallmark of a successful fractional chief financial officer. Doing so substantially reduces the risk and consequences of the bad news that inevitably happens periodically.
Loan covenant non-compliance, substantially aging receivables and payables, or falling revenues and profitability trigger a state of crisis that an experienced fractional chief financial officer can quickly address. Often the mere engagement of a fractional chief financial officer provides the company with a level of good will and time to ameliorate the situation.
The sudden exit of the key employee due to division divestiture, employee death or sudden retirement, or discovered defalcations often precipitates a crisis caused by the vacuum. Some crises are unavoidable; others are self-inflicted though lack of oversight. An experienced fractional chief financial officer can provide interim stability while focusing on streamlining operations and oversight and then exit in a well-planned and coordinated manner once a replacement is properly identified.
Oversight of back-office accounting
Having worked with numerous companies, an experienced fractional chief financial officer can bring substantial insight when reviewing, selecting, and implementing accounting and management information system upgrades. We can work with your existing accounting staff or if there are significant gaps, we can bring in our mid-level personnel to supplement company staff.
Single Family Office Unique Requirements
Within the unique context of a single family office, each of the foregoing needs are magnified. Consequently, a fractional chief financial officer is required to wear additional hats, the most important of which may be acting as the financial quarterback. High net worth individuals and families often have a host of professionals catering to their needs; however, the risk is of “too many cooks in the kitchen” with little coordination. Our commitment is to serve as a rational filter and to coordinate all outside professionals (who often only see part of the problem) towards one over-riding goal: long-term, multi-generational asset liquidity and protection.