PE-CXO’s Success Stories cast a spotlight on private equity-backed operators and the tools and tactics they leverage to create real value. In each entry, a world-class executive details a practical solution to a critical business issue. To be featured, contact mallory.stokker@pe-cxo.com with the subject line “Success Story.”
Executive: Brian McInerney, CFO and multi-time PE-backed finance lead.
Challenge: Billing and operational shortcuts leveraged to hit monthly revenue targets were causing critical accounting and customer service issues.
Solution: Increased granularity in forecasting and enhanced analysis to identify key chokepoints; complete elimination of the pre-billing practice.
Businesses often take shortcuts to hit short-term goals at the expense of long-term health and sustainability. It’s often the CFO who needs to step in and say, “wait a second, that’s a bad practice.”
The sponsor had acquired this particular business approximately one year before I stepped in. For the first six months of the hold, they kept the sitting CFO, who had been with the company for 15 years. It was a family-owned business, and those tend to have less discipline and structure than what’s required in a PE environment. There really was no one gatekeeping before I arrived.
Within my first month, we had an operations review of forecasted shipments and an AR review of open invoices. Two major issues quickly became apparent.
As the end of each month approached and it became clear the business needed to get more orders out the door to...