Who is an external CFO and how do they work with portfolio companies?
Accounting shows what happened in the past. Meanwhile, PE funds need to know what is happening now – and what will happen in the future. Traditional accounting records transactions but rarely provides the insight needed for effective cash flow management, debt management, or equity financing. In portfolio companies, such a gap can mean delayed financial reports, inconsistent KPIs, or overlooked signals of weaker performance. Investors expect transparency and speed, and without CFO oversight, reporting often fails to meet these standards. An investment fund must be able to compare portfolio companies against consistent metrics, assess the impact of operational changes, and model scenarios for exits or acquisitions. These are tasks that go far beyond accounting – they require a CFO who can translate numbers into strategy.
CFO by the hour vs. interim CFO – flexible forms of cooperation
"CFO by the hour" is a model where a company uses the financial director's expertise on a consistent, but needs-adjusted basis – for example, several times a week or month. This does not change the fact that an on-demand CFO supports decision-making and performs duties typical of a full-time financial director. However, due to, for example, the size or specifics of the company, full-time employment is not necessary. An interim CFO, on the other hand, is engaged full-time but for a specified period – for example, during a restructuring period, preparation for the sale of a company, or for large investment projects. Both forms offer flexibility and are tailored to the specifics of private equity companies.
External financial director or in-house – what to choose?
In Polish portfolio companies, the external cooperation model is increasingly proving effective. Why? Because it provides access to an experienced financial director who works for several companies simultaneously and brings practical solutions proven in various industries. A permanent in-house CFO makes sense when a company has reached a large scale and requires daily supervision. In many cases, CFO outsourcing allows a company to grow faster while not burdening it with the high costs of permanent employment. Practical analyses by consulting firms (e.g., Consero, an F&A outsourcing company) indicate that as many as 4 out of 5 CFOs supported by investment funds cooperate with an external partner not only for CFO functions but also for accounting functions.
What tasks does a financial director take on in private equity?
A CFO in portfolio companies usually does not handle accounting. This is a person who supports management in decision-making, controls the financial situation, and ensures that the financial strategy of the portfolio company is consistent with the fund's goals. An external financial director is responsible for financial controlling, prepares private equity financial forecasts, and monitors cash flow. Thanks to this, the fund can report results to investors on an ongoing basis and assess business profitability. Regular cooperation with a CFO by the hour also allows for quicker reaction to industry changes and effectively increasing the company's value.
From cost management to strategic planning
One of the main tasks of a financial director in private equity is cost optimization and EBITDA improvement. The CFO analyzes operating expenses, looks for areas where processes can be simplified and more efficient solutions implemented. At the same time, their role extends beyond current finances – they support strategic management and company development planning. In practice, this means, for example, advising on financing new projects, preparing investment scenarios, or creating long-term forecasts.
Budgeting, reporting, and restructuring support
The CFO in portfolio companies is also responsible for preparing and monitoring the budget and regularly reporting to investors. They support management in assessing the financial situation and indicate which actions will maintain liquidity and improve profitability. An important element of their work is also participation in restructuring – from financial audits to implementing new processes that allow the company to operate more effectively. A well-prepared company gains not only stability but also a better position in the process of preparing for a private equity exit.
How CFO outsourcing helps increase company profitability and value?
In private equity portfolio companies, growth rate and financial results are crucial. An external CFO by the hour allows for a fresh perspective on the company's finances and the introduction of solutions that impact EBITDA. This includes analyzing operating costs, comparing them with market benchmarks, or implementing simple tools for monitoring cash flow. As a result, the company quickly detects inefficiencies and can optimize them immediately.
CFO outsourcing also provides a clear picture of the future. Regularly prepared forecasts show how the company's situation is changing – whether there will be enough cash for further investments, when liquidity problems might arise, and how new projects impact valuation. This allows the private equity fund to see in advance whether the portfolio company is developing according to plan, and the company itself has a concrete financial roadmap for the coming months.
Bet on an external CFO and increase the value of your portfolio company
Accounting alone is not enough for a portfolio company to grow and be ready for an exit. A structured approach to finances, forecasts, and reporting is needed. CFO outsourcing, meaning a financial director by the hour, gives private equity funds flexibility – access to knowledge and experience when needed, without the costs of full-time employment. As a result, portfolio companies gain better control over costs, a clear financial strategy, and predictable results.
At Symmetria Partners, we help create value – we support clients in daily financial management of companies, optimize processes, and help prepare for further stages of development.
