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.