Fractional CFO After an Acquisition: 6 Things to Settle First

Fractional CFO After an Acquisition: 6 Things to Settle First

A fractional CFO after an acquisition has one job that the seller's bookkeeper never had: to give a new owner numbers they can trust on a business they did not build. Hire one without settling the terms and you tend to get a monthly report nobody reads, or a bill for work nobody asked for. Six things are worth settling first.

The numbering is a checklist to work through, not a ranking.

The firm written up here is System Six, a Seattle bookkeeping and fractional CFO firm whose live profile says it helps organizations modernizing a finance function after an acquisition. It is a vetted Sam's List member and a paying member of our featured program; payment does not buy the language we use or its reviews. The full methodology is at the end of this post.

1. Settle the Acquisition Finance Function: Who Owns What

Before anything else, write down who does what. A bookkeeper records transactions, reconciles accounts and closes the month. A fractional CFO decides what the numbers mean: the forecast, the reporting package, cash planning, the lender conversation. When one person is asked to do both without saying so, the close gets late and the analysis gets thin.

Ask for the split in a one-page scope. List the deliverables and who owns each. If the same firm does both, the scope should still show which hours are which, because the two are billed differently.

The limitation: a fractional CFO is part time by design. A scope that asks for daily availability is a full-time hire at a part-time price, and someone will be disappointed.

2. Settle Monthly Reporting for a New Owner

Monthly reporting for a new owner should be short and the same every month. A common package is a profit and loss statement against budget and last year, a balance sheet, a cash forecast for the next few months and a list of what changed and why. Agree on the day of the month it arrives.

The point is not volume. The point is that you learn what normal looks like in a business you are new to, so abnormal stands out. Ask for the first three months to include a plain-language note on anything that surprised the CFO.

The limitation: a report is only as reliable as the books under it. If the close is slow or the accounts are not reconciled, a polished package presents unreliable numbers more attractively.

3. Settle the Opening Balances and the Cutoff

On the day the deal closes, the acquired company's books need a clean line: what was on the balance sheet that day and what belongs to the seller's period. Disputes later often start here. Receivables collected after closing, bills paid after closing for work done before it and deposits held for customers all have to land on the right side.

Ask the CFO to prepare an opening balance sheet at the closing date and compare it with the one in the purchase agreement. Differences are not necessarily errors, but each should be explained in writing. The same document is what you will use to check any working capital adjustment.

The limitation: the CFO can organize the facts, but how the purchase agreement treats a disputed item is a legal question. Your attorney decides what the contract says and what to do about it.

4. Settle the Lender Reporting Your Fractional CFO After an Acquisition Must Track

If you borrowed to buy the business, your loan agreement almost certainly requires reports on a schedule, often monthly or quarterly financial statements and an annual compliance certificate. If investors put in money, they may expect their own package. These duties are easy to miss in the first weeks, and a missed deadline can be a technical default even when the business is fine.

Hand the CFO the loan agreement and any investor documents in the first week. Ask for a calendar of every report, with the due date and who prepares it. Ask whether any covenant is measured on a number the business could miss in a slow month.

The limitation: a CFO reads the agreement for the numbers and the dates. Whether a breach has occurred, or whether a waiver is worth asking for, is a conversation with the lender and your attorney.

5. Settle Who Approves Payments and Who Sees the Bank

After an acquisition, control is a bigger risk than it looks. The seller's people know the old way of paying bills, and the old way may have run through the seller's personal approval. Decide who can approve a payment, who can release it and who looks at the bank statement independently.

A sound answer separates those roles where the size of the business allows it. At minimum the owner sees the bank activity directly each month, not only a report on it. Ask the CFO to review bank access, card holders and who has authority to change a vendor's payment details.

The limitation: small teams cannot always separate every duty. Where one person must do two things, the owner's review is the control, and it only works if it happens.

6. Settle the Exit Terms and the Handoff

Every engagement ends, and it is better to agree how now. Ask for the notice period, what documents the firm hands over, who owns the files and how long the firm keeps its working papers. Ask whether the monthly package, the chart of accounts and the forecast model are yours at the end.

The handoff matters most if you later hire a full-time finance lead or sell the business yourself. A buyer's diligence will ask for exactly the documents the CFO has been producing.

The limitation: handoff terms in an engagement letter are only as useful as your ability to enforce them. Keep your own copy of the reports as they are produced.

Where System Six Fits as a Fractional CFO After an Acquisition

System Six is based in Seattle, was founded in 2009 and has 41 employees. It serves businesses nationwide with revenue between $1 million and $10 million. Its live profile lists Non-Profit Organizations, Professional Service Firms and Real Estate Investors as specialties, says the firm was acquired by a searcher in 2021, and says it helps organizations modernizing a finance function after an acquisition.

That makes it a candidate for the acquisition finance function described above: monthly books, a reporting package and someone who owns the calendar. The profile also lists monthly fixed fees starting at $800 a month, which is useful for budgeting, though a fee quoted on a profile is not a quote for your scope.

System Six does not yet have enough verified reviews on Sam's List for a count to be meaningful, so we do not cite one. Ask the firm for references from owners who bought a business. System Six is a vetted Sam's List member and a paying member of our featured program; payment does not buy the language we use or its reviews.

The limitation, plainly: the profile does not list lender reporting, purchase accounting or tax preparation as services, so ask whether any of the six items above is outside its scope. The $1 million revenue minimum on the profile also means a smaller business may fall outside what the firm takes on.

Frequently Asked Questions

What does a fractional CFO do after an acquisition?

A fractional CFO after an acquisition builds the finance function the new owner needs: a reliable close, a monthly reporting package, a cash forecast and the lender or investor reporting. They work part time and by scope, so agree the deliverables in writing.

How soon should a new owner hire a fractional CFO?

Ideally before or at closing, because opening balances and the cutoff are easiest to settle then. If the deal is already done, hire as soon as you can, since the first months set the pattern for reporting. A CFO cannot repair what was never recorded.

What reports does a new owner need each month?

At minimum a profit and loss statement against budget and last year, a balance sheet, a cash forecast and a short note on what changed. Add any lender or investor reports the agreements require. Agree the delivery date so the package arrives while it is still useful.

What should a fractional CFO engagement letter include?

The scope and deliverables, who does what, the fee and how it can change, the reporting calendar, the notice period, document ownership and handoff. Have your attorney read it if the engagement is long or the fee is large.

Before you interview anyone, write down the three numbers you most want each month, and ask every candidate how they would deliver them. You can browse fractional CFOs on Sam's List, including System Six.

How We Picked This Firm

You should be able to check our work, so here is how this post was built.

The pool. The pool is the one firm written up here, a vetted Sam's List member in our featured program whose profile mentions helping organizations modernize a finance function after an acquisition. This is not a survey of every fractional CFO who works with new owners, and many Sam's List members and other firms not written up here could fit.

How it is organized. The six items are a checklist to work through, not a ranking. Only one firm is written up, so there is no order of firms.

What review counts mean here. System Six has too few reviews on Sam's List for a count to mean much, so we do not cite one. A count shows how many clients wrote something down, not quality.

What payment does and does not buy. Listing on Sam's List is free, and so is being named in this article. The firm written up here is a paying member of our featured program, which is why it gets a write-up. What payment does not buy is the language we use about a firm, its review count, or a promise that it fits you.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.