When Does the CFO Order Office Supplies?

Larry Chester, President

What happens when you combine an overworked CFO / office manager, a lack of assigned administrative responsibilities, and an old and complex equity distribution spreadsheet? Important partner payments become chaotic, rushed and often riddled with errors.

A mid-sized law firm with 15 partners and 30 attorneys suffered from a case of “who was doing what.” Back-office duties were loose, with continual questions as to who was handling which administrative responsibilities.

There were no written instructions on how to process those equity distributions. Moreover, a CFO — who is responsible for strategic guidance of the firm’s financial management — shouldn’t be doing so many other administrative duties.

CFO Simplified evaluated the firm’s operations and executed the following changes:

• Documented the procedures to produce the distribution report monthly, and simplified the calculation so that it could be done more quickly.
• Established an accounting calendar so that accounting processes were done on a regularly scheduled basis. Responsibilities were assigned among the administrative staff, so that everyone knew who was responsible for the regular activities.
• Wrote a policy and procedures manual so that everyone knew what each job entailed.
• Monthly analytics were established, and a comprehensive reporting package was provided to all equity partners monthly.
• The managing partner decided to terminate their CFO. A knowledge transfer approach was created that stabilized activities in advance of the termination.

Our analysis led to a new organizational plan that included hiring a Controller instead of their existing full-time CFO. The new controller had responsibility for day-to-day processing. This allowed us to establish and tighten internal controls and improve the closing process.

Working as the firm’s fractional CFO assured that the equity distributions were done on a timely basis, and payments to the equity partners were delivered within two weeks of the month end close for the first time.

Changing the organization of the finance and administrative area in the company reduced operating expenses, and improved operational efficiency. A regular reporting package was created for the executive committee and equity partners that laid out profitability, reporting exceptions and monthly trend analysis and KPIs.

Solve your back-office inefficiencies with a fractional CFO from CFO Simplified.