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You Might Not Need A Full-Time CFO Yet—Here’s Why

Written by Ascent CFO on . Posted in Blog.

As a company accelerates into the early growth stage, new challenges and priorities arise. Many founders have met this initial success through mentorship, affordable junior talent, contract bookkeepers, and internet advice—an admirable accomplishment. But alongside this growth comes complexity, and the need for an elevated expertise. 

Whether it’s Series A fundraising, risk management, or strategic forecasting, this complexity often prompts startup founders to question: Is it time for a full-time CFO? Founders want to think big-picture, but might lack the nuanced perspective—and hiring a veteran CFO full-time isn’t the only solution.

Enter: The Fractional CFO

A Fractional CFO is a part-time or contracted Chief Financial Officer who provides strategic oversight and high-level expertise without the full-time commitment. 

For most companies in the early stages of growth, hiring a full-time CFO who has spent a decade in Fortune 500 companies isn’t realistic or even fiscally responsible. An affordable hire would likely be someone far less experienced. What does a company at this stage actually need? Someone who can guide their financial strategy and ensure they have the capital, resources, and direction for sustainable growth. That’s where the Fractional CFO comes in.

Yes, it’s true this option comes at a fraction of the cost. But those who say Fractional CFOs are for people who can’t afford to hire a full-time CFO are missing the full picture and the many benefits.

Top benefits of a Fractional CFO for an early-stage company

A full-time CFO can command not only a high salary, but also expensive benefits, bonuses, and likely even an equity package. Beyond the cost savings, consider the other important benefits that come with a Fractional CFO:

Strategic focus

A Fractional CFO is hired to work on higher-level items. Their dedicated hours are spent on strategic concerns like pricing models, FP&A, fundraising planning, and profitability optimization, ensuring the company’s growth continues on an upward trajectory.

Applied expertise 

Something every business owner should understand—Fractional CFO work attracts individuals in the prime of their career; those who have worked in Fortune 1000 or high-growth companies, in multiple startups, and across industries. Fractional CFOs adapt their expertise to the company’s needs to provide the right information at just the right time.  

The perfect fit

CFOs with high-level expertise look for work that excites and challenges them, and the strategic potential of an early-stage company can meet that criteria. That said, an experienced CFO likely wouldn’t be challenged enough in a full-time role at an early-stage company as it would likely include the less-strategic responsibilities of an accountant and controller.

The key to sustainable growth 

As a company grows and faces increasing complexity, it’s natural to look for an expert to step in as soon as possible. But before you do, it’s important to consider your options.

At Ascent CFO Solutions, we step in to fill in all the gaps that come with a company’s growth—including the Fractional CFO role. Our full-stack financial team can also step in with controllers and accountants to close the books, produce monthly financials, process payroll, manage payments, and complete bank reconciliations. At some point, every growing company needs a long-term, proactive approach to running their business—and we can help.

3 signs that a Fractional CFO may be a better fit

  1. The cost of a full-time CFO strains resources. If hiring a full-time CFO means straining resources or selecting a less experienced candidate, consider a Fractional CFO.
  2. Strategic input is needed, but not every single day. If the company can manage administrative financial operations with an accounting manager or controller, hiring a Fractional CFO to focus on the big picture insight and strategic guidance could be very cost effective.
  3. A full-time CFO wouldn’t feel challenged in the full-time role. Experienced CFOs look for work that challenges them, like managing investor relations, doing strategic planning, and scaling operations. If a significant amount of the full-time CFO’s role would consist of administrative tasks, a Fractional CFO, paired with a full-time Controller would likely be a better fit. By hiring a Fractional CFO who focuses on strategic work, the company can attract a higher caliber professional. 

Growth is exciting: Let’s fill in the gaps!

The early stages of business growth are full of excitement and possibility. Instead of struggling to keep up with the growth, or making big decisions quickly—simply reach out.

Our financial team provides the expertise you need, when you need it.

Is Your CFO Prepared to Help Sell Your Company?

Written by Ascent CFO on . Posted in Blog.

M&A activity is an exciting milestone for a startup or small business to reach. Having interested parties court you for a potential sale is a dream scenario for many founders. However, not all small and medium business CFOs are prepared to successfully manage an exit.

Ascent CFO Solutions has put together a list of questions to help evaluate if your current CFO is up to the job or if you need to bring in someone with additional experience. 

  1. Does your CFO have previous M&A Experience?This question sounds basic, but it’s critical. No amount of aptitude, good attitude or willingness to learn (all great qualities in more junior staff) is a substitute for M&A transaction experience. Ensuring your CFO has experience in IPO’s, private equity transactions, or major fundraising rounds is advisable. If your CFO does have relevant experience, dig into that experience to learn more about their role in the deal, what they learned and what they’d do differently if given the opportunity. This will give you insight into whether or not they are the right fit for the task.
  2. Has your CFO kept up with clean and accurate financial reporting?Sometimes companies move at rapid speed and key housekeeping tasks such as timely financial reporting and well-documented processes can unintentionally be deprioritized. Although this is a reality for many businesses, it’s never a best practice. Infrequent and disorganized financial and KPI reporting is a red flag that your current CFO isn’t ready to take you through an acquisition process. Due diligence on the part of the acquiror will likely be a thorough and intense process. Having a CFO that keeps clean financials as a standard operating procedure for your business will go far in lowering the stress and length of the due diligence process.
  3. What perception and level of confidence do your Board and investors have of your current CFO?Stakeholder management is one of the most important skills a CFO can lend a company during M&A activity. You should critically evaluate if your current CFO has done a good job of this by evaluating their ability to manage existing, high-level stakeholders such as investors and your Board of Directors. This should give you an important data point when deciding how to proceed.
  4. Has your current CFO proven they can handle complex tax and legal issues?During an exit, financial issues are often inextricably tied to complex tax and legal issues. The CFO who guides you through your M&A activity should be well-versed in assessing tax implications of various exit scenarios and work well with the company’s legal counsel to manage risk. A CFO’s ability to anticipate and mitigate risk in partnership with legal can mean preparing for M&A issues such as structuring earn-outs, shoring up financial liabilities and preparing for possible layoffs.

There’s a lot to consider when deciding if your current CFO is prepared to help sell your company. There’s no “perfect” CFO that checks all of the boxes. That’s where Ascent CFO Solutions comes in; we can help fill any gaps in experience with your current CFO and finance and accounting teams as much or as little as your needs require. Contact us for a free consultation with one of our experts.

Navigating Turnover and Challenges: How Ascent CFO Solutions Guided Reside Worldwide Through a Financial Rebuild

Written by Ascent CFO on . Posted in Blog.

About Reside

  • Company Size: <150 employees 
  • Industry: Commercial Real Estate and Technology
  • Products + Services: Ascent CFO Solutions’ Interim CFO and Controller Services

Reside Worldwide, Inc. is the leading provider of professionally operated and managed global alternative accommodations with a portfolio of premier hospitality brands including Manhattan’s The Beekman Tower, Rochester MN’s Broadway Plaza, Puget Sound based ABODA by Reside and furnished private military accommodation provider OnBase Suites. Additionally Reside provides technology to the managed global accommodations marketplace with end-to-end technology management platform 3Sixty.

The Task and Challenges

Reside’s senior management team contacted Ascent CFO Solutions as they were preparing to make changes to their finance and accounting teams in 2023. Reside faced multiple complex challenges including:

  1. Leadership: The need for an Interim CFO to quickly assume leadership onsite in Reside’s Bellevue, WA offices.
  2. Operational Excellence: Leadership and execution for critical tasks such as board and investor reporting, bank reporting and partnering with Deloitte’s audit & tax consultants. 
  3. Talent Advisory: Interviewing and vetting permanent CFO replacement candidates as well as filling open headcount and backfills of recently departed employees.

The Solutions

This project was staffed by Ascent CFO experts Paul Harrison (Interim CFO) and Diane Georgia (Interim Controller). Paul, Diane and the Ascent CFO support team worked closely with Reside’s senior management team to plan this engagement to ensure a seamless transition. One element that was important to Reside was that Paul and Diane be initially onsite once a month at their Bellevue, WA offices full time. Ascent CFO provides onsite services and was happy to accommodate. 

Once arriving in Bellevue, Diane and Paul got to work.

1. Leadership

Upon the start of the engagement, the finance & accounting department at Reside had experienced over 300% turnover in staff in the prior year. This presented multiple operational and cultural challenges for Diane and Paul. From a practical standpoint, this meant there was almost no historical or tenured knowledge within the organization regarding key processes or previous decisions. The few staff that remained weren’t comfortable speaking up about problems because of the department’s previous culture.

Diane and Paul had a big challenge ahead of them to help the current staff feel empowered in their roles so they could do their best work. On day one, daily problem solving meetings were implemented with the leaders of the treasury, accounting and FP&A (Financial Planning and Analysis) functions. These meetings were supplemented with individual meetings to deep dive on specific challenges. Additionally, Paul and Diane worked with other departmental leaders to improve the frayed communications between those departments and the finance and accounting department. This involved constant monitoring of email and messages to provide quick feedback when questions arose. Finally, praise and recognition became part of the norm to encourage the team to stick together.

2. Operational Excellence 

There was a laundry list of critical processes and tasks that needed to be addressed by the Ascent CFO team.

  • Forecasting: Reside’s Board of Directors had a forecast that did not align to the bottom up forecasting prepared by the FP&A team. Paul worked with the FP&A team to provide a single source of truth forecast for executive management.
  • Investor Reporting: Investor reports were constantly late and lacked consistency. Previous reports contained errors and didn’t tie back into the previous and current year’s numbers.
  • Annual Financial Audit: Ascent CFO partnered with Deloitte to conduct Reside’s annual financial audit. To bring the audit to completion, Diane worked with the team to reconcile all balance sheet accounts and propose a long list of adjustments in order to correctly state the financial position at 3/31/2024 (year end). This needed to be done to obtain a clean opinion from the auditors and allow the staff to start the new year with accurate accounts.
  • NetSuite: Reside had implemented NetSuite in April 2023 and the transition to this new system caused a lot of stress for the team. Diane worked with the team to ensure their policies worked well with NetSuite.  
  • Banking Relationships: Paul took the lead on working with Reside’s banking partners. Paul walked the bankers through the transition and established regular reporting, communication and management of lines of credit.
  • Balance Sheets: There had been no reconciliation of the company’s balance sheets since the previous year’s audit.
  • Tax Returns: Reside’s tax returns were due just 8 weeks after the project began. Diane worked closely with Reside’s in-house team as well as Deloitte consultants to get all of the data ready so taxes could be filed on time. Additionally, Ascent CFO supported Reside in their 2022 and 2023 German VAT returns.
  • Bank Audit: Reside was past due on their semi-annual bank audit from KeyBank.  Diane worked with the team and completed the audit to Key’s satisfaction.
  • Accounts Payable: The existing AP team was not performing at the highest level. Cash had not been reconciled for months and the existing team needed guidance on how to complete this task.  Diane worked with the existing team to develop a streamlined approach to reconcile cash before the audit began. This entailed backdating Accounts Payable transactions to the period in which they were incurred, booking journal entries to remove the effects of the changes and then pushing the transactions into the current reporting period for reconciliation.
  • Vendor Reconciliations: There were three large-scale vendors who all claimed Reside owed them significant sums of money at the start of the engagement. Because there was not a process or clear historical records in Accounts Payable, Reside had the challenging task of validating each claim individually to determine if they did in fact owe on any given invoice and communicate with each vendor.  Diane worked with one of the vendors directly and supported the team for the other two vendors.  This entailed regular communication with the vendor to assure that their statements were being worked on since they had not been communicated with for months prior.

3. Talent Advisory

Talent Advisory services are key to many Ascent CFO engagements, including the Reside engagement. Ascent CFO offers full talent advisory services including recruitment, screening, interviewing and offer package creation to clients. In this case, Ascent CFO supported Reside on two fronts; the first being the staffing of the Reside accounting and finance department. The second being the search for the next Reside in-house CFO to take over at the end of the Ascent CFO engagement.

Staffing the Team

When Ascent CFO began working with Reside, there had been significant turnover in addition to multiple open roles that needed to be filled with qualified staff.  Paul and Diane proposed to the executive team an updated organization structure for the finance and accounting departments. Working with Reside’s HR and Recruiting teams, job descriptions were created, positions posted, interviews conducted and new team members were hired in short order.  

An added layer of complexity was the resignation of the treasury manager, a senior accountant and the payroll manager shortly after the project began. This required Diane and Paul to act quickly and think creatively given the other staff members were already fully utilized. This entailed adding two other Ascent CFO resources on an interim basis and Paul/Diane absorbing some additional tasks.

In total, Paul and Diane helped Reside hire 6 net-new staff and reorganized several other existing staff into revised roles to help move the company into the future.

CFO Search

In this case, Ascent CFO partnered with Reside’s Human Resources team and an external recruiting firm to achieve the goal of hiring Reside’s next in-house CFO.

Paul was responsible for interviewing CFO candidates and providing guidance and recommendations to Reside’s senior leadership team. After interviewing numerous candidates, Reside decided to hire Dan Duryea in March 2024 to lead the finance and accounting functions of the company under Paul and Diane’s recommendation.

Here’s what Dan had to say about working with Ascent CFO:

“The Ascent CFO team provided a fresh set of eyes on our processes and procedures in an ever-changing environment and drove process improvement across the entire business. They were able to shepherd the business with a steady hand and shift the culture away from jumping from fire-drill to fire-drill while putting a focus on the long term strategy of the department and overarching company goals. I cannot say enough about our partnership with Ascent CFO and, in particular, Paul and Diane’s leadership. I highly recommend their team for not only Interim CFO and Controller level positions, but also fractional and project-based work. I look forward to partnering with Ascent CFO again in the future and have already recommended their services to several other colleagues who have been extremely impressed with their willingness to jump in and roll up their sleeves in unique situations.”

— Dan Duryea, CFO, Reside

Fractional CFO vs. Interim CFO: When is the Right Time to Engage?

Written by Ascent CFO on . Posted in Blog.

Startups and small businesses will often reach a point in their revenue growth journey when it’s beneficial to bring in outsourced expert financial talent at the CFO level.

Strategic initiatives, timely projects, and talent gaps can arise that require someone to step in with dedicated effort and specialized knowledge beyond what is currently available on the team. 

Fractional CFOs and Interim CFOs are two types of outsourced CFO talent. Which type does your company need? It depends on the circumstances and how much support your team requires. Familiarize yourself with the terminology by learning what each role entails and when your company might enlist each type of outsourced CFO. 

What is the difference between a Fractional CFO and Interim CFO?

Both Fractional CFOs and Interim CFOs are outside contract resources but they have different purposes and strategic value.

Fractional CFO

A Fractional CFO manages a company’s financials on a part-time and often long-term basis when the needs of the company don’t require full time support. Oftentimes, Fractional CFOs are brought in during times of transition, which could include: 

  • Experiencing rapid growth
  • Dealing with cash flow challenges
  • Preparing for an exit
  • Raising capital
  • Merging with or acquiring another company
  • Preparing for an audit, Quality of Earnings (QofE) or due diligence process

Fractional CFOs can be hired as supplemental resources to augment existing financial teams. They focus on high-level strategic initiatives and projects, and when hired proactively, they can help head off financial issues and pitfalls before they become significant problems. 

Fractional CFOs have multiple clients and work flexible hours as much or as little as clients require. Fractional CFOs are equipped to provide guidance on matters such as accounting systems and processes, financial reporting, financial planning and analysis, capital fundraising, mergers and acquisitions, banking and credit line management, data visualization, cash flow forecasting, budgeting, and more.  Ascent CFO Solutions’ clients find immense value in both the practical and strategic advice Fractional CFOs bring to drive their business to the next level of growth. 

Interim CFO

In contrast, an Interim CFO is the best choice for companies who know they need full time support and leadership for a discrete period of time before a permanent team member returns or takes over. Interim CFOs can be beneficial for companies in many scenarios including:

  • Team members going on parental leave or taking a leave of absence
  • Running an M&A process on either the sell-side or buy-side
  • Transitioning from a junior financial founding team to senior expertise
  • An inflection point of needing full-time financial leadership while searching for a permanent hire
  • Leading a large, later stage fundraising rounds such as a Series B or Series C round
  • Crisis management such as CFO turnover or leadership changes

An Interim CFO is equipped with the same skill set as a Fractional CFO. However, given the full-time nature of the role, they can be involved in a wider variety of tasks. Companies are typically beyond the startup phase to merit the full-time support of an Interim CFO.

—

Ascent CFO Solutions offers both Interim CFO and Fractional CFO services to startups, small businesses, and high-growth companies of all types. Our CFO bench includes financial professionals with a variety of industry backgrounds including SaaS, manufacturing, CPG, technology, healthcare, e-commerce, professional services, real estate, construction, nonprofits, education, and more.

Contact us today for a free needs assessment to discover if a Fractional CFO or Interim CFO solution is right for your business.

Managing Cash Flow During the Slow Season

Written by Ascent CFO on . Posted in Blog.

By Pam Wismer, Fractional CFO, Ascent CFO Solutions

This article was originally published in Construction Business Owner Magazine.

The very mention of fluctuating cash flow can cause anxiety for construction company owners. Without sufficient planning for a slow season, even seasoned businesses may find themselves in a cash crisis from time to time. While weather can be an obvious culprit for midsized general contractors — particularly those in nonresidential construction such as commercial, road and highway, or heavy construction — a slow season can also be related to factors such as project life cycles, regional labor shortages, or a poorly quoted or scoped job. In severe circumstances, a company must be strong enough to survive the cash drought without becoming insolvent and remain well-positioned for new projects as the market improves.

Consider these tips to financially prepare for and navigate an unexpected slow season.

Even the Best Plans Require Review

A well-managed job-level forecasting model allows a company to anticipate future cash ebbs and flows. Jobs rarely go exactly as planned, often facing unexpected challenges. But there are many factors a company can control: job design, cost adjustment sales contract clauses, pay-when-paid subcontractor contract clauses, site management and supervision, business processes that provide current and accurate information, efficient billing practices, and invoice collection practices are just a few. Investing time and effort into a well-thought-out forecasting model should be a priority even during the busy season. Waiting until business slows down is too late to implement cash strategies that can mitigate an impending cash crunch.

Consider This Cautionary Note

Without a forecasting model, a company may experience uncontrolled growth. During this phase, companies often envision endless opportunities and ramp up personnel and expenses in anticipation of the continued rise. However, uncontrolled growth can lead to operational inefficiencies and financial strain. The use of forecasting software (much like project management and accounting software) and incorporating input from project managers, the finance team and other key stakeholders can greatly enhance the accuracy and efficiency of forecasting. Creating scenarios — best, worst and most likely — will assist in strategic discussion and decisions. These scenarios provide insight for short, medium and long-term planning. During the chaotic busy season, it may seem unrealistic or counterintuitive to divert attention to processing fundamentals, but having efficiencies in place when the slow season arrives will prove to be time well spent.

Continued Focus & Reaction to Details

A forecasting model remains effective only when using the best available information of the last updates. As with any forecasting, ongoing maintenance and consistent, accurate updates are necessary to achieve long-term visibility into potential cash flow issues. Even with operational excellence, unplanned changes (change orders, equipment and supply chain delays, subcontractor issues and inflation) need to be evaluated and updated as either critical or noncritical job updates. In addition, unavoidable or surprising delays in customer payments may cause a domino effect. Clear and transparent communication with both customers and vendors about realistic payment expectations is essential for effective planning.

While job costs and estimates are included in the forecasting model, other company costs such as overhead payroll, benefits, business insurance, rent, legal and tax payments need to be addressed as well. It costs money to run a company! While jobs are active, margins are built into contracts to support these additional costs. But what about when jobs are inactive?

Preparations and plans need to be developed for gaps in project life cycles. Hoping to land the next big contract may not be enough to eliminate the slow season impact. Data visualization is a fantastic way to take the guesswork out of the massive data available to construction companies. Data visualization techniques are visual representations in the form of charts, graphs and diagrams — usually in an executive dashboard — that allow teams to quickly digest data, trends, key performance indicators (KPIs) and forecasted cash flows to make informed decisions.

Rainy Day Fund

There is little argument over the need for a cash reserve at all companies, in all industries. But how much? Wouldn’t cash be better reinvested into the company, used for large asset purchases or placed in outside investments?

This decision-making can feel like a tightrope, finding balance between investing in the future and saving for a rainy day. In cases where lenders are involved, debt covenants may dictate cash reserve. But for all others, a good rule of thumb is keeping a cash reserve between three and six months of expenses. This reserve may need to hold the company over during the slow season, so it is critical to understand the entire universe of cash inflows and outflows.

Armed with a current forecasting model and data visualization highlights, a company can see the expected excess and shortfall months. It can be tempting to pay cash for large asset or equipment purchases during cash excess months, but often the better choice is financing these purchases and funding the cash reserve. Transfers to the cash reserve account in the cash-excess months (while not jeopardizing the overall cash plan) is one strategy to build and maintain a cash reserve. Alternatively, a percentage of each invoice can be transferred to a cash reserve account, which spreads the transfers out and may feel less painful.

The reserve account might be held in a money market or even staggered certificates of deposit (CDs). Consult with a banker or financial advisor for the most lucrative alternatives.

Correcting Course

Another valuable item in the business toolkit is the 13-week rolling cash-flow model. This is particularly useful for companies heading toward or currently experiencing a cash crunch. This very detailed view of cash inflows and outflows allows management to navigate on a daily and weekly basis and identify priorities (and where borrowing funds may be needed) with ease. By utilizing the current accounts payable and accounts receivable aging, payroll requirements, any debt service payments and automatic bank pulls, a “sources/uses” forecast can be created down to the day. By relying on these three important tools — forecasting model, data visualization highlights and the detailed 13-week model — strategies to extend the cash runway can be implemented.

Operational efficiency is always a great place to start prioritizing improvements with an immediate impact. Possible areas for improvement include processing change orders quickly, negotiating accounts payable/rent/debt payment terms, considering borrowing options, invoice financing, limiting purchases of additional inventory and encouraging early payments with discounts. In addition, an evaluation of employee versus subcontractor status and the pros and cons of maintaining fixed overhead are worthwhile exercises.

Planning for the slow season in the construction industry is not only about survival, but also about positioning the company for long-term success. By implementing forecasting models, maintaining clear communication with stakeholders and building a financial cushion, companies can weather any storm. As challenges arise, the ability to adapt quickly, manage cash flow meticulously and make informed decisions will set the company apart.

Pam Wismer is a Fractional Chief Financial Officer (CFO) with Ascent CFO Solutions, partnering with leadership teams to give them clear visibility into how to drive growth in their businesses. With more than 35 years of professional finance experience, including nearly 15 years in the construction industry, Wismer truly enjoys helping business leaders overcome financial challenges.

How Ascent CFO Solutions Unified and Streamlined Emergenetics Global Financials

Written by Ascent CFO on . Posted in Blog.

About Emergenetics

  • Company Size: <100 employees globally 
  • Industry: Learning and Development Consulting Services
  • Products + Services: Fractional CFO + Insights by Ascent CFO

Emergenetics knows what it takes to help individuals, consultants, corporate organizations, nonprofits, K-12 and higher education groups across the world build inspiring and inclusive workplaces to attract and retain top talent. In 2019, Emergenetics was scaling their business and knew it was time to bring in expert financial help and began working with the team at Ascent CFO Solutions.

The Challenges

Emergenetics came to Ascent CFO Solutions with 3 distinct challenges: 

  1. Five QuickBooks instances for each of their global entities operating in 3 currencies; USD, Euro and SGD.
  2. A time-consuming expense management process.
  3. No way to visualize the right financial information for the right people at the right time.

The Solutions

1. Five QuickBooks Instances + Insights = One Elegant Solution

Given the complexity and global nature of Emergenetics business, they were a natural fit for Insights by Ascent CFO. Built on top of PowerBI and other tools, Insights allows Ascent CFO clients to unify and visualize their financials from multiple data sources.

In this case, Ascent CFO Solutions took Emergenetics’ five QuickBooks instances that spanned three currencies (USD, Euro and SGD) and unified all of the financial data into a master file with a static currency rate applied. This allowed Emergenetics to roll all of their financials globally into a single view using USD. 

Prior to the consolidated view Insights gave Emergenetics, they were constantly building time-intensive manual reports to extract the necessary information about their financials. 

Now that Insights displays current and relevant financial information, it frees up more time for Emergenetics staff to spend on projects and activities to grow their business.

Bonus: Ascent CFO customized Emergenetics Insights views to match their colors, fonts and brand.

2. Expense Management Inefficiencies 

The addition of Insights to Emergenetics allowed them to streamline their expense management process.

Prior to working with Ascent CFO, the Emergenetics expense management process was a resource heavy, report driven activity. Each department leader would be emailed a static report with their team’s expenses from the previous month by the Emergenetics controller. They would then have to go back to the controller with questions, requests for more data and any issues the report uncovered. Ultimately the old expense reporting process wasn’t always accurate, helpful or dynamic. 

With the implementation of Insights, department heads now have access to a live view of their team’s expenses. They can drill down into specific expenses to uncover and resolve issues in real time instead of having to wait for a report to be sent to them. 

““Insights has been a game-changer for us, saving our company approximately 10 to 15 hours of monthly report generation. This efficiency boost has not only been fantastic but has also led to increased satisfaction among department leaders. They now manage team expenses seamlessly, eliminating the need for time-consuming back-and-forth emails to resolve issues.””

— Marie Unger, CEO, Emergenetics

3. The Right Information for the Right People

The third challenge Emergenetics brought to Ascent CFO was the lack of ability for specific employees and executives to see current and relevant financial information. 

Ascent CFO’s analysts got to work building customized, dynamic financial data visualizations for executives, the CEO and the Board of Directors using advanced permissioning so that Emeregenetics could ensure both transparency and data protection. 

  • The CEO Report

    Emergenetics CEO Marie Unger previously had to send individual requests for financial reports to her controller and Ascent CFO Jodi Mercer. This old way of doing things was inconvenient for all involved, time intensive and created a lag between when Marie needed information and when she received the information. Ascent CFO built Marie a custom dashboard using Insights that puts all of her business-critical financial information in one location that she can access anytime that is convenient for her. The numbers update in real time so she can be assured she always has the latest and greatest data to help her make critical business decisions. 
  • The Board Report

    Ascent CFO worked with CEO Marie Unger and the Board of Directors to build a custom Insights view that allows the board to see relevant, real-time financial information about the company.Prior to Insights, financial reporting for the Board was a very time-intensive, manual process. Just like the reporting for the executive team and department leaders, reports for the Board were static and lacked the appropriate level of information. Insights allowed Emergenetics to visualize the company’s financials for the Board using customized graphs and charts instead of just columns of numbers. Visualizing the information in this way helps to contextualize the numbers, allowing the Board and Emergenetics executive team to have richer and more meaningful discussions about the company’s financials.
  • Leadership Reports

    As previously mentioned, Emergenetics came to Ascent CFO with 5 QuickBooks instances. Within each QuickBooks instance were five to six individual departments. This meant there were 25+ unique departments across 10+ leaders needing access to their team’s specific financial information. Using row-level security practices, analysts at Ascent CFO visualized each department’s data to ensure leaders have access to their team’s financials, but not the financials of other teams or data not relevant to their role. The impact of giving department leaders at Emergenetics access to live financials has resulted in the executive team’s ability to drive greater accountability across the company.

“Working with Ascent and our customized Insights financial data reports has allowed us to tackle challenges head on, improve our team’s collaboration and drive our company into the future.”

— Marie Unger, CEO, Emergenetics

In Summary

In partnership with Ascent CFO and the Insights product, Emergenetics accomplished:

  1. Self-service financial data reporting and visualization
  2. Huge efficiency gains for expense management and reporting
  3. Unification of financial data across 5 global QuickBooks instances and consolidation of currency to USD.

5 Common Icebergs An Experienced CFO Can Help High-Growth Firms Avoid

Written by Ascent CFO on . Posted in Blog.

By Matt Kelly

While navigating through times of rapid growth and expansion, businesses often encounter specific challenges that can sink the ship if not recognized and avoided. An experienced CFO can help businesses identify and steer clear of these hidden dangers, helping to ensure smoother sailing to financial success.

As someone who has spent 15 years in finance roles at Fortune 150 companies and another 12 years as a CFO for high-growth firms, I specialize in leading organizations through various phases of growth, circumventing the pains and risks that commonly go along with them. Whether with a VC-funded, PE-backed, or Founder-owned firm, many of the same challenges present themselves. Here are some of the most frequently encountered: 

Ensuring the basics of your company organization are seaworthy – before getting too far from shore

Many companies are founded quite simply. Understandably most of the initial efforts are spent refining the product and GTM strategy and there is rarely much time or money spent setting up a detailed legal structure. Many times they register their trade name, get an EIN, draft up brief Articles of Incorporation and ownership documents and set off to build a business.

However, as soon as possible, a detailed legal and risk review should take place. Owners must know exactly who owns what- both profits and losses. Companies need to walk through multiple future scenarios and know exactly what happens in each case. Who gets what from a prosperous future sale? How would those gains be taxed? What about liabilities from a large lawsuit? What classes of stock will be utilized in the operating agreement, and what rights will each class have as far as participation rights, anti-dilution provisions, voting rights, etc.

Experienced CFO’s can lead this review, in tandem with good corporate counsel. We’ve seen relationships between founding partners become strained and these legal structures tested. We’ve helped design deal terms to optimize, not gross, but net gains. We’ve seen a potential sale threatened due to a seemingly innocuous document that in fact threatened the entire S-Corp status. We’ve quickly set up insurance to cover major liability gaps. We’ve even helped founders close loopholes that would have allowed them to be voted out of their own companies.

Constant assessment of your crew – ensure you always have the right talent onboard for each stage of the company’s journey

Conditions change very rapidly at growing companies. The skills required to perform a position successfully one year may totally change the next. Often companies begin as a small group of individual contributors, all hacking and hustling to get the company to viability. The next year those same mavericks may be struggling to manage teams of employees or to build documented processes.

Thorough financial and resource planning can help identify these skill set necessities before they arrive. In some cases, upskilling can take place in advance to help resources adapt and grow into those new sets of challenges. In other cases, new resources can be targeted with experience in those next phases of planned growth.

Speaking of Crew – Make sure your Accounting & Finance function isn’t malnourished

Don’t get too far into your journey before building out your top-tier Accounting & Finance function.

It is very common for businesses to neglect Finance and Accounting in their early phases. And most times they get away with it, as basic bookkeeping and simple cash management suffices while you are busy proving your concept and fighting your way to profitability.

But when you have reached the point where the business is expanding rapidly and many employees are now depending on it for their livelihood, it is time to ensure the growth and health of the company are sustained.

A strong Finance and Accounting practice brings organized and GAAP compliant accounting. It includes thoughtful planning, timely reporting, and insightful analytics. It ensures solvency through strong financial controls and cash planning and management.

It can be difficult to determine a specific amount or percent of Revenues to spend to achieve a healthy Accounting & Finance function. This depends largely on the size and complexity of the organization.

So examine your own situation. If it feels like you don’t have clarity of your results, if you don’t have solid planning and focused direction, then you likely have under-invested in your Finance and Accounting function. And know that this doesn’t have to break the bank. If your business is not large enough to require or afford a full-time CFO, by all means enlist one on a fractional basis.

Don’t sink the boat with too much cargo – when too much success can lead to serious threats

In the early stages of a company, much of the focus is (rightfully) placed primarily on  product development and sales. However, when traction starts to occur at scale, this poses a number of very real risks to the entire business if not properly planned for.

Obvious is the burden on cash. Most businesses will experience a major cash pinch in times of rapid sales growth. An experienced CFO will help you plan ahead of time for the proper amount of growth capital required if you hit or exceed your plan. And they can help you secure it most cost-effectively.

Also common are difficulties in producing or implementing your product at true scale. Oftentimes smaller organizations are running on highly manual and minimally documented procedures for the production or delivery of their products. These quickly fracture when attempting to be run at scale. A detailed planning process helps each department know about the desired growth for a coming year and then thoughtfully plan for proper resources required to achieve those goals.

Sometimes this is additional tech infrastructure. Other times it is planned investment in Operational or Procedural process improvements. A good CFO will lead the planning process to identify and address these risks in advance of your rapid success.

Focus on the Destination

Consideration of your ultimate goal is crucial. Is there a desired sale or transition plan in the future? In how long and to whom? Maybe you plan to transition the business to a family member, or slowly sell chunks of equity to employees. Perhaps the plan is to sell to a strategic buyer, to a PE firm or to go public. All of these destinations require different paths. Your legal structure, organization of your documents, your preparation for diligence and legal pre-work can all be charted out well in advance, optimized for your specific desired outcome.

In the vast ocean of business challenges, an experienced CFO can be a valuable member to have onboard. They will collaborate with your leadership team to thoughtfully plot the course and they can lean on their experience to confidently navigate the way around these, and many other potentially hazardous icebergs. Wishing you smooth sailing!

The Importance of Having a Rolling Forecast for a Company Scaling Their Business

Written by Ascent CFO on . Posted in Blog.

In the dynamic landscape of business growth and expansion, having a rolling forecast plays a pivotal role in the strategic planning and decision-making processes. Unlike traditional static budgets that can become obsolete by mid-year, a rolling forecast enables companies to adapt to changing market conditions and scale their business effectively. 

Let’s explore 4 reasons why a rolling forecast is essential for companies navigating growth:

  1. Agility and FlexibilityA rolling forecast provides companies with the agility and flexibility needed to respond to market shifts and unexpected events swiftly. By updating forecasts regularly, businesses can make informed decisions based on real-time data, allowing them to adjust strategies, resource allocation, and financial planning to align with evolving circumstances.
  2. Continuous Planning and MonitoringUnlike annual budgets that may lose relevance as the year progresses, a rolling forecast facilitates continuous planning and monitoring of business performance. Companies can regularly track their progress against forecasted targets, identify variances, and take corrective actions in a timely manner to stay on course towards their growth objectives.
  3. Enhanced Decision-MakingHaving a rolling forecast enhances decision-making by providing management with current and accurate information to support strategic initiatives. By incorporating up-to-date  operational data, competitive insights, and market trends into the forecasting process, companies can make informed choices that drive sustainable growth and profitability.
  4. Strategic AlignmentA rolling forecast ensures that financial planning remains aligned with management’s strategic goals and business objectives. By incorporating short-term and long-term forecasts into a cohesive plan, businesses can maintain a clear vision of their trajectory and make informed decisions that support sustainable growth.

As companies scale their business and navigate the complexities of growth, having a rolling forecast is instrumental in driving agility, enabling continuous planning, enhancing decision-making, and maintaining strategic alignment. By embracing a dynamic forecasting approach, businesses can adapt to changing environments, seize opportunities, and achieve sustainable success.

Do you have questions or are you looking for some support with this? Reach out: ascentcfo.com

Essential Interview Questions for CFO Candidates

Written by Ascent CFO on . Posted in Blog.

Selecting the right Chief Financial Officer (CFO) is a pivotal decision for any organization. Beyond technical proficiency, the ideal CFO possesses strategic vision, leadership acumen, and cultural fit. 

Here are key interview questions to uncover these crucial qualities and ensure you’re hiring the best candidate for the role:

  1. Strategic Vision: “Can you outline your approach to long-term financial planning and strategy development?” This question assesses the candidate’s ability to align financial goals with broader organizational objectives and steer the company towards sustainable growth.
  2. Leadership and Team Management: “How do you foster collaboration and cohesion within your finance team?” Understanding the candidate’s leadership style and team-building skills is essential for ensuring a cohesive and motivated finance department.
  3. Risk Management: “How do you identify and mitigate financial risks in a rapidly changing business environment?” A strong CFO must be adept at identifying potential risks and implementing strategies to safeguard the company’s financial interests.
  4. Communication and Stakeholder Engagement: “How do you communicate financial insights and strategies to non-financial stakeholders?” Effective communication is crucial for translating complex financial data into actionable insights that drive informed decision-making across the organization.
  5. Adaptability and Innovation: “Can you provide examples of how you’ve adapted financial strategies to respond to market shifts or technological advancements?” This question evaluates the candidate’s ability to innovate and adapt financial processes in a dynamic business landscape.
  6. Cultural Fit: “What values do you prioritize in a company culture, and how do you embody them as a CFO?” Assessing cultural fit ensures alignment with the organization’s values, fostering collaboration and cohesion across departments.
  7. Track Record and Achievements: “Can you share a specific accomplishment or initiative from your previous roles that you’re particularly proud of?” This question provides insights into the candidate’s track record of success and their ability to drive meaningful impact.

By asking these interview questions, organizations can delve beyond technical competencies and uncover the strategic insight, leadership qualities, and cultural alignment necessary for a successful CFO hire.

Let’s chat essential interview questions.

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