In the lower-middle market, it is common for sellers to enter the sale process without a CFO or accounting advisor.
Investment bankers are likely involved, but their focus is to facilitate the transaction and market the company. Further, most sellers understand every detail of the operational side of their business, but often struggle with the financial and accounting component.
A ‘Fractional CFO,’ during the transaction process, acts as an M&A liaison between the sellers and transaction advisors. They represent the seller throughout the transaction process to ensure the following benefits:
Bridge the Gap Between Sellers & Transaction Advisors
Most sellers find the transaction process overwhelming because they are bombarded with detailed questions and time-consuming data requests around accounting, finance, legal, HR, and technology. Having an expert accounting voice in the room can remove this burden and ensure the proper data and answers are provided in a timely fashion.
Avoid Costly Delays
Many companies find out during the transaction process that their accounting and finance function is not ready for an acquisition. This issue can result in additional professional fees to fix their accounting and finance issues, a discounted valuation, or the stopping of the transaction process altogether.
Ensure Financials are Organized and Vetted
Sellers can be proactive by hiring a ‘Fractional CFO’ to conduct a historical clean-up before the transaction process. This will give the M&A liaison first-hand knowledge of your numbers and allow accounting ‘best practices’ to be implemented into your company before buyers start poking around.
If you would like to learn more about how CFOx can help your company or client during the transaction process, please schedule a free consultation via email ([email protected]) or by scheduling a call directly on our website homepage.
