Reporting process built ahead of a sale to private equity

Situation

An asset maintenance services business was heading towards a purchase by a private equity buyer. Plenty of attention had gone on the commercial story and on the trading numbers. Almost none had gone on the finance function that would have to produce reporting for a new owner with higher expectations and a shorter timetable.

The question was straightforward: could this finance team support the business under private equity ownership, and if not, what needed to change.

Constraint

The work had to happen quickly and without disrupting a team already occupied with the transaction. It also had to be honest without being destructive. Telling an incoming owner that the finance function was weak, without a practical plan to fix it, would have helped nobody.

Recommendations also had to be realistic for the people who were there. A plan that assumed three new hires and a system implementation would have been ignored.

What was built

A diagnostic of the finance function covering the monthly cycle, the reporting outputs, the systems in use, how the team was structured and where the time went. Each step of the cycle was timed and examined for duplication, manual handling and rework.

From that, an improvement plan sorted by effort against benefit, so the business could see what could be done immediately and what needed investment.

The diagnostic also went through the working capital cycle: billing timing, invoice accuracy, collections practice, supplier terms and payment runs. That surfaced a set of low-effort working capital savings, mostly process changes rather than anything requiring new systems or difficult conversations with customers.

Who it was built with

The finance team itself, through walkthroughs of how each part of the cycle actually ran rather than how the process documentation said it ran. Operations were involved on billing, since most invoicing delays start before an invoice is raised. Management reviewed and prioritised the plan.

Outcome

The business went into the purchase knowing what its finance function could and could not do, with a sequenced improvement plan and a list of working capital savings that could be taken quickly and cheaply. The incoming owner got a clear picture rather than a surprise in the first reporting cycle.

What this looks like for you

Ahead of a sale or a refinance, the finance function is normally the last thing anyone looks at and one of the first things a new owner tests. A short diagnostic usually finds both real savings and a few things you would rather fix before somebody else finds them. See FP&A automation and AI.