Key outcomes
- Monthly close standardized and run independently of the founder
- Practice-area profitability visibility built for the first time
- 12-month rolling forecast tied to capacity and pipeline
- Buyer-ready reporting package delivered for the partial buyout transaction
The challenge
The founder had built the firm over twenty-two years, largely on relationships and judgment. The financial back office had grown organically: a part-time bookkeeper handled QuickBooks, the founder approved most invoices personally, and management reporting was a deck the founder rebuilt by hand each quarter for the partner meetings.
With a partial buyout on the horizon, the founder needed two things he didn't have. First, financials a sophisticated outside buyer would actually trust. Second, a back office that could continue to run after his role narrowed — without the firm's monthly close depending on his memory of which expenses belonged to which practice area.
Our approach
We sequenced the engagement to address the operating need first and the transaction need second.
Months 1–3 — Institutionalize the close. Documented the close process the part-time bookkeeper had been running from memory. Standardized expense coding by practice area. Established controller-level review of every month's close. Removed the founder from approval workflows wherever the data made it possible.
Months 4–6 — Build the visibility. Constructed practice-area profitability reporting — revenue, direct labor, allocated overhead, contribution margin — for each of the firm's four practice areas. Built a 12-month rolling forecast tied to current pipeline and team capacity.
Months 6–9 — Prepare for the transaction. Produced a trailing-36-month restated P&L, a normalized adjustments schedule, a recurring-vs-project revenue split, and the supporting documentation the buyer's diligence team requested. The fractional CFO walked the buyer's analyst through the model directly.
The outcome
The partial buyout closed at the upper end of the negotiated range. The buyer's quality-of-earnings provider commented in writing that the trailing-36 reporting was 'meaningfully cleaner than typical for a firm of this size.'
Post-transaction, the founder's role narrowed as planned. The monthly close now runs on a published calendar without his involvement. Practice-area leaders see their own profitability monthly and have begun making pricing and hiring decisions with the data — conversations that previously happened only in the founder's head.
For the first time in the firm's history, the financial picture exists outside of one person.