Who is an external CFO and how do they operate in portfolio companies?
Accounting shows what has 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, 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-level oversight, reporting often fails to meet these standards. An investment fund must be able to compare portfolio companies using 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 utilizes the expertise of a financial director on a steady, but needs-adjusted basis – for example, a few 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 specificity 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 restructuring, preparation for selling the company, or 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 the company has reached a large scale and requires daily oversight. In many cases, outsourcing a CFO allows the 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 firm) 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 in private equity take on?
A CFO in portfolio companies usually does not handle accounting. This person 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. This allows the fund to report results to investors on an ongoing basis and assess business profitability. Regular cooperation with a CFO by the hour also allows for quicker reactions 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 implements more efficient solutions. At the same time, their role extends beyond current finances – they support strategic management and the company's 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, as well as regular reporting to investors. They support management in assessing the financial situation and indicate which actions will help maintain liquidity and improve profitability. An important element of their work is also participation in restructuring – from financial auditing to implementing new processes that allow the company to operate more efficiently. A well-prepared company gains not only stability but also a better position in the process of preparing for a private equity exit.
How does CFO outsourcing help 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 detached look at the company's finances and the implementation of solutions that impact EBITDA. This includes analyzing operating costs, comparing them with market benchmarks, and implementing simple tools to monitor cash flows. As a result, the company quickly identifies 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 a liquidity problem might arise, and what impact new projects have on valuation. Thanks to this, the private equity fund sees in advance whether the portfolio company is developing according to plan, and the company itself has a concrete financial roadmap for the coming months.
Opt for 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 finance, forecasts, and reporting is needed. CFO outsourcing, i.e., a financial director by the hour, gives private equity funds flexibility – access to knowledge and experience when needed, without the costs of a full-time position. As a result, portfolio companies gain better cost control, 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.
