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How CFOs Upgrade Finance Team to Prep for Private Equity Resell

(An excerpt of this story appeared in CFO.com.)
By Tim Jung

A private equity firm just bought your promising firm with high hopes.

You estimate that the company will be sold again for a much higher margin within 60 months.

But your finance team has trouble closing the books in a timely manner. So, what does the company’s financial picture look like? You can’t analyze results or establish a timely baseline. You don’t have true control over the bank account because you don’t know what is flowing in or out. Are there missing transactions or cash? How can you mitigate liquidity problems?

Too many companies believe the finance and accounting arm just somehow works like gravity, but without an upgrade to the next level, everything will eventually come crashing down.

As the CFO, you know promises need to be kept and old habits need to be broken. The acquisition closed last week, and you now live on Jump Street. You have three to six months to turn your band of silos into a well-oiled machine.

Here is a checklist that will allow you to upgrade your Finance Department so they can hit their own numbers:


To begin the process of upgrading your team, start with stabilizing your current situation.

That’s where your finance team members enter the picture. Assess their work based on timeliness, accuracy and completeness. Can they work independently at tasks, as well as collaborate with others to complete group projects?

Now, look for skill gaps.

Most of the workforce (58%) need new skills to do their jobs, according to research from Gardner. Research from Korn Ferry projects that if 85 million jobs go unfilled due to lack of skills by 2030, it would result in an $8.5 trillion loss from unrealized revenue.

Sometimes you will have to upgrade the person and sometimes you will have to upgrade the position. When private equity firms purchase assets, it is driven by the future value that they locked in those companies. The expectation will focus on more, better and faster—which may not mesh comfortably with “the way we do things here.”


Once you have a better understanding of your team members, take a look at how they work. More specifically, are they working in a coordinated way? If they are producing data for other team members without knowing the objective, it’s probably a sign of a silo, which drains time and money from any bottom line.

Salesforce found that 86% of employees and executives blamed lack of collaboration or ineffective communication on workplace failures. But it doesn’t have to be that way.

To improve teamwork, focus on the handoffs. For example, if you need information from me, telling me how you will use the data before I put it together will make the whole process more collaborative and more importantly, more efficient. This little bit of insight will allow me to give you the correct information in a certain format and by a set deadline to help you achieve your goal.


Midsize companies can be heavily reliant on spreadsheets, even though the capabilities of a system would make things simpler. It is not uncommon for finance team members to put data in a spreadsheet, so they can give it to another team member, who would put it in another spreadsheet.

Accenture’s report, Digital Finance Beyond the Hype, finds that 80% of the finance process could be automated, eliminating 60%-75% of staff time.

Familiarize your Finance Department with a customer relationship management (CRM) tool. Bank reconciliations in a spreadsheet are not worth much if they are not connected to other reconciliations. CRMs have reconciliation built into the system so things quickly become integrated.

Just make sure you don’t go overboard with technology. Too many companies unknowingly create digital silos. Today’s large corporations use 367 software apps, on average, to manage their workflows, and they don’t talk to each other.


Perception is an important dimension to your company, which is why it should be reviewed.

It speaks directly to culture that carries a direct line to employee satisfaction, productivity and retention. And that links with customer satisfaction, sales and retention. For this assessment, focus on the “internal” customers of your Finance Team, meaning fellow employees.

For example, does your finance team support a united front or is it everyone for themselves? Watch how they distribute the work when someone takes vacation. Are they negatively impacted by a distributed workplace with some team members in different states?

In North America, collaboration and communication silos cost seven hours per week or more than 350 hours per year, according to Plainview.

To take corrective action, use a technique called modeling. Instead of asking for a solution, create one and reinforce it with all involved team members—leading by example. For example, if you need information from me, provide the overall objectives. Then, I will pull the data in a format that would serve your needs. Once finished with the trial sample, I would present it to the intended team member and make adjustments based on feedback. After I have confirmed the correct information and format, I would educate other team members so they would specifically know how to help you achieve your goals.


Governance is about checks and balances. If I’m doing reconciliations, there needs to be a culture of governance. Someone must check my work.

When checks come into the office, someone has to walk to the bank and make the deposit. But that’s not enough. Did the person put the checks in the right accounts? How much?

Instead, ensure someone is logging the checks at the beginning of the process. Then, ask another team member to deposit the checks, make copies and give those copies to the controller.

Regarding second and third lines of governance, leverage board members to lead the finance and audit committees so you can glean decades worth of expertise.

The things your finance team did to get you here—a fresh acquisition by a private equity firm—may not be enough to get you there in the short term. Methodically begin upgrading the company with the finance and accounting arm to move the entire company toward its next milestone.

(Tim Jung, CPA/MBA, is a director who has held leadership positions in the US, Europe and Asia for complex global banking businesses, as well as nonprofit and for-profit organizations. His expertise includes tactical financial planning, financial modeling, business analysis, accounting, forecasting and reporting.)