Finance Success Stories

Mentoring Support During Corporate Global Expansion

vcfo engaged with  an advertising production consultancy business to work on their broadcast and video production business. Headquartered in the U.S., this company had a strong European presence and was facing challenges with costly foreign currency transactions. At the time, most of their international client contracts were based on Euro and British Pound Sterling currency, which meant the company was charged exchange fees to convert to U.S. dollars and then convert back to foreign currency in order to pay contractors and other expenses.  Additionally, the company was a closely held organization that was rapidly expanding and in need of strategic guidance with setting up foreign subsidiaries, contractor and employee classification issues, key employee incentive programs and succession planning.  

After a diagnostic meeting with the company, vcfo deployed a Consulting CFO with extensive international experience. He introduced the client to a local bank offering a unique product in foreign currency accounts, enabling the company to avoid costly and repetitive exchange rate fees. The Consulting CFO also introduced the company to a global professional employment organization that provided guidance on foreign employment issues, and an international tax expert who provided guidance on setting up international subsidiaries conducive to optimal U.S. tax strategy. He researched, made recommendations and assisted top management in deciding the correct course of action for corporate global expansion.

As a result, vcfo was able to establish foreign currency accounts that are held and managed locally in the U.S., established a U.K. limited company (a subsidiary of the U.S. parent) and set general guidelines with respect to the timing of establishing future foreign entities in Canada, Mexico and China.  vcfo continues to support this client with ongoing review of accounting software and dashboard reporting of regional results in the home currency.

Transitioning Financial Leadership

Upon the resignation of the CFO, a marketing software and professional services company quickly needed an interim resource to cross-train with the previous CFO and fill in until a full-time CFO could be hired. A Consulting Senior Controller from vcfo was hired to backfill critical areas until the permanent resource was brought on board, including re-vamping reporting package, reviewing month-end closings, processing new hires and terminations, overseeing bi-monthly payroll processing, training and mentoring a staff accountant, overseeing revenue accounting, calculating monthly commissions, coordinating audits and tax returns and more.

During the transition in financial leadership, the vcfo Sr. Controller ensured workflow continuity, met reporting deadlines and brought the audit to a successful conclusion. The company recently hired a new CEO, and vcfo’s Sr. Controller is working closely with her to help with the hiring, interviewing and transitioning of the new permanent CFO.

Evaluating Prospective Start-up Opportunity for Entrepreneur

Our client, a physician involved with various start-up companies, was evaluating a start-up opportunity and needed assistance analyzing a new business  and cash flow projections. He was looking for assistance from a CFO to develop a detailed three-year pro forma business plan for an alternative living facility, including employee and personnel needs, and other costs of running the business, the estimated funding needed to launch the business, as well as an actionable, yet viable, timeline for going live.

The forecasting analysis we provided helped the client make the appropriate decisions for this prospective start-up.

Assisting in Growth Management Planning

The owner of a strategic channel program and marketing company saw opportunities for exponential growth, but wanted to be cautious about the timing of hiring professional staff to meet those opportunities. The owner reached out to vcfo for senior-level financial support to help create a business analysis and cash flow projection to assist in growth management planning. Our CFO prepared a three-year revenue plan and successfully assisted the owner in developing initiatives and making strategic and operational decisions that helped determine  revenue goals and future professional staffing needs.

Restating Records for Non-Profit from Loss to Profit

One month before year-end, a non-profit charity had two key financial employees leave the company – the VP of finance and controller. While they had an accounting team, the company lacked the financial leadership and knowledge to close the books and complete an audit. Additionally, the CEO wanted to review their accounting system processes to identify areas of concern and implement efficient improvement. Once vcfo was brought on board, a consulting CFO and controller completed an initial assessment of the accounting records, corrected the records, and correctly restated results from a $250,000 loss to a positive net income. In the process vcfo helped the company complete their audit in record time.

Based on feedback and information from the initial financial assessment, the CFO and controller made recommendations and implemented new processes to improve internal controls, monthly close and cash management. Five months after engaging with vcfo, the company hired a full-time CFO, whose transition was supported by vcfo’s Consulting CFO. The company’s CEO and CFO continue to leverage vcfo’s Consulting Controller for additional bandwidth and support.

Technology Company Needing Financial Mentorship and Reporting

An innovative drug development and technology company engaged vcfo to review current reporting processes and structure, make recommendations for reporting improvements and ensure GAAP compliance. Serving in a mentorship capacity, vcfo deployed a Consulting CFO to work side-by-side with the company’s Director of Finance. Together, they reviewed the company’s current structure and reporting history, and discussed methods for improving the chart of accounts and created a reporting structure that can be better used for operations management. Within a month, they brought the financial statements from a mixed cash and accrual method to one that was completely accrual and in line with GAAP standards. Additionally, vcfo restructured the chart of accounts to properly represent the company’s manufacturing environment, corrected their representation of fixed assets and trained staff on best practices. The engagement also improved the managerial and financial reporting of the operations through more efficient monthly closing processes.

Providing Structure for Successful Start-up

A start-up company, which provides an online database used by the oil and gas industry, was seeing great success. The company was managed by two creative entrepreneurs who had limited financial and operational accounting experience, but wanted to ensure they established a solid foundation for their company. While they knew they needed support, the owners did not want a resource to come in and take care of all of the financial and back office functions. Instead, they wanted to be hands-on throughout the process so they could manage this part of their business moving forward. They decided they needed a resource who could provide the strategic infrastructure and show them how to manage the daily execution tasks.

Needing a resource to reach these goals, the start-up engaged a vcfo Controller to mentor the COO and assist with the bookkeeping, payroll and reporting functions. The Controller laid the basis for accounting and financial reporting to ensure that investors were able to see accurate, relevant and GAAP-compliant information. Not only did the Controller make sure the books were accurate and reconciled, but she worked directly with the owners to review the books, wrap up any outstanding items and prepare for an audit. Confident in the numbers they reported to investors and bankers, vcfo helped the start-up successfully complete their first audit. Additionally, through vcfo’s mentorship, the COO has expressed an increased confidence in discussing financial matters with board members and is better equipped to manage the company on a financial and operational level.

Immediate Financial Assistance for Fast Growth Company

vcfo engaged with a mobile applications company that distributes rewards to users who interact with participating advertisers’ apps. At the time, the client was operating in a high growth-environment and deciding whether they should sell or go public on the Canadian Exchange. They had an immediate need to streamline their reporting and clean up their finances in preparation of an audit covering the past three years. Upon meeting the client, we learned that due to the nature of their business model, they needed to find a process for converting a complex cash flow to accrual accounting to issue user rewards. At the time we engaged, there was no real reporting function, creating an urgency to establish solid books and processes should they decide to go public.

vcfo deployed a Senior and Assistant Controller to help their in-house CFO, who had worked with vcfo at a previous client. The vcfo team rebuilt the chart of accounts, recoded all transactions on an accrual basis and developed accounting policies for the user rewards system.  We helped prepare their records and provided assistance during the multi-year audit. We delivered ongoing monthly close support and day-to-day financial reporting functions. Additionally, we provided strategic support during a fast growth phase, including assistance with their increasingly complex reporting needs as they launched global operations.

Financial Integration Assistance for a Global Company

After acquiring a company in Brazil, our client needed senior-level assistance with the financial integration process. As they researched CFO solutions, they connected with a virtual CFO at vcfo with an international background and experience in Brazilian and US GAAP, as well as due diligence. The client retained vcfo to work with their senior staff on the due diligence process, the creation and execution of a financial integration plan, and assistance with multiple operational matters post-acquisition. vcfo helped with all the details, from mapping the Brazilian statutory reporting requirements into US GAAP to facilitating technical communication between the Austin headquarters and the acquired company. By leveraging vcfo’s resources, the client was able to solve complex financial and operational integration issues in a timely and efficient manner. The company continues to work with vcfo for their CFO consulting with acquisitions in both the US, South America and Europe, on an ongoing basis.

Supporting a Start-up with Financial, Recruiting and HR Solutions

vcfo worked with a start-up company that was a joint venture between two worldwide leaders in electric transmission development in Canada and Spain. During the start-up phase, the board members and general counsel needed more than just CFO consulting. They turned to vcfo to assist with their financial, human resources and recruiting requirements. In addition to providing CFO solutions, the vcfo divisions delivered end-to-end services not found with other financial consulting firms. They helped determine all the needs of starting a new entity in Texas, from scouting office space to selecting tax advisors and auditors to recruiting, hiring and on-boarding new employees. The virtual CFO was especially instrumental in the ability to operate in multiple languages and was an integral part of achieving the company’s first successful project.

Preparing a Company for Acquisition

A vcfo client, a potential buyer, needed to understand the true profitability and actual cash flow of the business they were targeting for acquisition. The existing records and methods were inadequate. The accounting transactions were not maintained on an accrual basis and typically were only reported when paid. Additionally, the chart of accounts was not functional especially as it related to classification of costs between operating expense and cost of sales.

The virtual CFO and financial team analyzed the prior and current year cash-basis financial records, then proposed and implemented adjustments to the records that accurately present results of operation. As a result of using vcfo’s financial advisory services the client was able to understand the current and historical financial performance of the target at a gross profit, operating expense, interest/financing cost and net cash flow level of detail, with visibility to strengths and challenges. Armed with this information they could then make an informed decision on their strategies for a transaction.

Buyer Support for Acquisition

A partner engaged vcfo to assist them in assessing a potential acquisition. Identifying and accurately valuing the assets and liabilities reported on the target company’s balance sheet was critical. The bank reconciliations were inaccurate and out of date. and other balance sheet accounts were not reconciled at all. Equally as challenging was that their accounting database was corrupted and unreliable. Our partner knew vcfo’s CFO consulting solutions would provide the financial organization and reporting essential for an acquisition. vcfo analyzed the prior year ending balance sheets and all current year activity and balances. All accounts on the balance sheet were reconciled, scheduled and supported by documentation. As a result, the client comprehended the make-up and value of each asset and liability enabling them to make a determination on how to structure their proposed transaction.

Implementing McLeod Loadmaster ERP System

vcfo worked with a trucking company that had purchased the McLeod Loadmaster ERP system but had not yet begun implementation. vcfo was currently involved with their due diligence process, performing contract CFO and controller functions in preparation for an impending acquisition of the company. Since there was no management reporting, specifically no KPI metrics, the acquiring PE firm needed a resource with the necessary skills to implement the software. They turned to vcfo. The vcfo team quickly reviewed the implementation plan and brought in the appropriate resource with ERP experience, modified the implementation plan and quickly dug into the functionality and business processes necessary to get McLeod up and running. This included building a customized database to provide reporting and to support the remaining due diligence and transition requirements from the old to new company. As a result of vcfo’s actions, the McLeod Loadmaster ERP system was successfully Go-Live within three months. The existing team was trained, information soon started flowing through the system and additional business processes and reporting was integrated as the company embraced the new system post acquisition.

Working with Development Stage and Rapid Growth Companies

vcfo works with many development stage and rapid growth companies which have limited finance and reporting resources and look to financial consulting firms for support. Often these companies obtain new capital from outside investors, attain a banking relationship, manage internal growth, acquire other operations and sometimes are acquired. The process for each event requires comprehensive due diligence by the other party often several years of GAAP compliant financial statements, multiple year forward looking financial statements, account reconciliations, analysis and aging reports and more are required. vcfo leads the teams to expertly and efficiently assist the company in this process, enabling management to keep their primary focus on operating their business.

Assisting Company with Restating Financials to Get Loan Approval

A local bank contacted vcfo Seattle because one of their business clients, that had a high credit score and a long, positive credit history, had applied for a SBA loan. Unfortunately, there were problems with their application and they were in danger of being turned down for the loan and potentially losing an opportunity to garner funding that would enable them to triple the size of their business. A vcfo virtual CFO came on board, implemented accrual accounting, restated the financials to reflect the new accounting approach, recast the application and negotiated the loan. The company had a check from the bank in less than two weeks.

Reducing Full-Time Headcount with Part-Time Support

A Seattle company came to vcfo concerned about the fit of their current outsourced controller. She was an individual consultant introduced to the company through their contract CFO from another consulting firm, and both were working 40 hours per week. vcfo analyzed the controller’s workload and found that an employee with a simpler skill-set could perform the tasks more efficiently. vcfo replaced the controller with an Accountant who was able to complete the job in 2 days each week. The resulting cost differential, lower rate and fewer hours then funded a vcfo CFO, who worked only those hours needed to meet the company’s requirements. Ultimately, this vcfo solution saved the company the entire cost of a 40 hour/week CFO resource. Our flexible model does not require any client to take any vcfo staff for a minimum commitment of time and certainly not full-time.

Providing Support to a Company Through Sales Transaction Process

vcfo was retained to support a client preparing to sell their business. The ownership had never experienced this type of a process and as a result faced many challenges, including inconsistent financial records regarding key components of the business. Additionally, the owners decided to keep the transaction confidential and as such were not able to leverage any of the employees in the due diligence process. The company had good legal counsel and adequate tax representation but no experienced financial staff in-house to lead or support this kind of transaction. Our vcfo CFO brought significant deal experience to the engagement and was able to fill an important role in the sale of the company.

The process from LOI to closing took approximately two months, an aggressive timeline, and yielded a significant valuation. A key obstacle that required consistent monitoring was lack of internal accounting staff able to produce key financial due diligence. To resolve this issue, vcfo’s consulting CFO worked closely with their CPA firm.

vcfo was instrumental in the success of this transaction. vcfo’s knowledge of key tax elements in the structuring of the transaction, the ability to work with their CPA and tax advisory firm, and our capacity to identify critical solutions to provide financial and operational due diligence materials produced invaluable results. vcfo also worked closely with the company’s attorney and management team to complete the lengthy asset purchase agreement schedules and provided overall guidance to the management team on multiple issues, including transitional and planning matters.

Helping a Company Resolve Shareholders’ Compensation

vcfo was retained by an architectural engineering firm who had structured an retirement program for three retiring shareholders. This program represented a fixed sum, payable over ten years as a deferred compensation arrangement under Section 409A of the Internal Revenue Service Code. After this program was instituted, the firm felt significant pressure to their earnings due to the economic downturn. Additionally, the investments they had set aside to partially fund this program were mainly in stock funds and had lost about half their value. It became clear that the existing retirement program was no longer sustainable. If nothing changed, the company would have difficulty meeting its obligations under the plan.

vcfo’s consulting CFO guided and facilitated a renegotiation process that included building financial models to evaluate the numerous scenarios under consideration. vcfo was perceived as having a degree of independence with no stake in the outcome and acted as a liaison between the attorneys evaluating the 409A implications and drafting the agreements with the M&A/consulting firm. The end result was a revised retirement program that provided the retirees with a level of security and lessened the cash flow burden on the firm. The resolution of this challenge freed up the owners to focus on what was most important: running the business.

Financial Consulting for Long-term Client

When vcfo started their long-term relationship with this century-old Dallas-based restaurant company, the company had been using a part-time CFO consulting firm specific to the restaurant industry. They weren’t receiving the support they needed and looked for other alternatives. Once onboard, the virtual CFO was tasked with heading up the reorganization of the finance department, developing financial and management reporting and assisting with their franchise program. The company was behind on reconciliation reports and needed human resource policies and procedures established. vcfo provided a blended team with the addition of part-time bookkeeping and HR management support. As a result, management had peace of mind that the financials were sound and the department was functioning at a high-level. The HR manual is still in use today. The virtual CFO was involved in the process of the company becoming a franchise sales and development organization and continues to provide recommendations on system improvements, processes, financial reporting and cost controls.

Bringing Direction to Financial Reporting Systems

vcfo was referred by a strategic partner to an optical nanotechnology company seeking outside financial consulting firms to organize their financial records and reporting systems in preparation for an audit. A part-time virtual CFO brought direction to the financial reporting systems, hands-on management of the audit and initiated processes to support an eventual sale. As part of the due diligence process, an Assistant controller was added to the team for reconciliation purposes. Over the course of a year the vcfo team supported the client through an aggressive lifecycle, from audit and sell-side diligence support through transaction to post-purchase integration. vcfo continued to support the post-acquisition activities of integration into the large public corporation. As a result the company was acquired at an increased valuation and saved over $100,000 in taxes.