Scrambling at 8 PM before the holiday weekend because your Finance VP just quit with short notice?

Stepping off the plane at Laguardia late in the evening on Thursday, June 29, 2023. I turn off airplane mode. It’s a blitz of missed calls, plus a voicemail. It’s even a New York number. Someone must’ve already known I was coming. But who?

I listen to the message. It’s a New York number but I quickly learn that the caller is from back home. It’s a CFO who’s just left one of my clients to work for a new company. We’d had a conversation a few days earlier about how we can help him in his new role. His Finance VP just resigned earlier that day and he needs help fast. I thought my entire work queue was clear for a trip Upstate during the upcoming holiday week, but a decade-plus in the industry has taught me that you can never anticipate everything. I return the call:

• Him: Are you guys able to step in and help? With the upcoming holiday, there’s only a few business days next week before he leaves.

• Me: Yes, we can do that.

• Him: How much time do you need with him to learn the accounting processes?

• Me: 1 or 2 hours will be fine.

  • (Unspoken Thought: It’s a lot more time than I usually get, which is zero.)

• Him: That doesn’t sound like nearly enough.

• Me: We’ll make it work. I’m not worried about it at all.

• Him: Let me try to set up 10 hours with him next week.

• Me: That would be plenty. I usually step in and have to figure out everything by myself. Any extra time is a luxury.

• Him: Okay, sounds good.

• Me: Have a great holiday weekend. Talk to you again next week.

I also learn that it’s an enterprising business. Led by a founder-CEO who’s started and exited successful ventures before. They know what they’re doing and they have ambitious plans for the future. They need a reliable resource to execute those plans.

The Finance VP quit voluntarily but views the situation as if he were forced out. He’s disgruntled and is going through the motions with the handoff, giving only basic info, vague explanations, and leaving a lot of questions unanswered. And not providing clear responses to the questions that he is answering.

After the training handoff, I dive in deeper. There are some challening accounting features. Several unique revenue streams. Current processes are clunky. Old invoices booked for revenues that never existed. No documentation for when annual subscription-type revenue streams first began or will end. Customer contracts each with different provisions. Some revenues recognized at a point in time and others over time. Complex customer and vendor relationships and commissions process.

I go to work. Before long, new accounting processes and documentation are in place. We’ve organized and divided responsibilities among my firm, the company’s staff accountant, and the new CFO. Financials are delivered by the 13th of each month. Timely information. Consistent service. The complexity of the situation has now been broken down into a simple, replicable process. Day in day out and month after month, everything is working at an optimal level. The company has never used full GAAP accounting. We make the conversion after studying relevant records from the past 3-4 years.

Fast forward a couple years into the future. The company receives an unqualified opinion (clean opinion with no exceptions) on its first-ever audit. The annual revenue run rate was $3.5 million at the start of the engagement, now it’s $8 million. Everything is humming for the business and its accounting processes. All of this delivered at a cost of ~$50K per year less than the full-time employee who abruptly resigned, a cost that’s barely changed in two years despite the rapid growth in the business. We’re prepared for a capital raise, M&A, possible future exit. Whatever the future holds, we’ll be ready.

At The Virtuous Cycle, we deliver elite accounting resources.  Effective solutions that are implemented FAST. Need us to help you out of a bind? Yes, we do that, too! Reach out to us today. I’m confident that we can transform your accounting & finance department from a source of stress into a key strength in your business.