Who’s in Charge Here?

Larry Chester, President

The Managing Partner of a multi-state firm with 37 partners had concerns about firm operations and its plans to grow the business. It hired CFO Simplified to evaluate workflow, financial reporting, and provide ongoing strategic guidance.

Two days into the research, the office manager, who had been in this role for 20 years and had primary responsibility for all back-office processing, walked into the Managing Partner’s office, resigned, and refused any further contact with the firm. It was the same day payroll needed to be run. Partner Distributions were due the next day, and K-1s were already late to the partners to file their 2022 taxes.

A quick review of the accounting system showed significant inattention to the firm’s financial processes. Transactions to the IOLTA account couldn’t immediately be verified. Deposits for the firm’s 401(k) hadn’t been made for three months, and the status of financial reporting couldn’t be verified.

Responding to this emergency, CFO Simplified immediately locked down the security of the IT system and banks, gaining control over all six bank accounts. Within the first day we:

• Changed signature authority on the firm’s bank accounts from the office manager to the Managing Partner.
• Processed payroll for all non-equity employees.
• Determined that none of the six bank accounts had been reconciled in the past seven months, and two of them hadn’t been reconciled in more than a year.
• Partner Distribution calculations were completed before noon the next day.
• A list of critical activities was developed, with a schedule meeting the critical timelines.
• CFO Simplified’s bookkeeping staff was brought in to bring all the bank accounts up to date and evaluate the status of the IOLTA account.
• Met with all accounting and admin staff to assign priorities and establish a chain of command for each activity with the office manager gone.
• Met with the outside tax accountant and assured her availability to process and complete the K-1s for the partners within a few days.
• Determined that signed, blank checks had been distributed to all offices to provide for payment of local bills. Those were all recovered and returned to the Chicago office.

The most important thing was to assure the executive committee that back-office operations were under control, that payroll could confidently be processed, bills could be paid, and the partners could receive their distributions. Despite a 20-year employee leaving on a moment’s notice, no deadlines were missed, even though our staff came in without preparation.

Gain control and peace of mind with a fractional CFO from CFO Simplified.