Do You Really Need a CFO in Your Portco? Why Starting with the Right Financial Support Matters More

After the close of a lower middle market acquisition, private equity firms often look to “professionalize” the business. And one of the first questions on the table is: Should we hire a CFO?

But here’s the reality: jumping straight to a CFO can be premature — and often unnecessary — in the early stages of portco ownership.

What most businesses actually need first is a strong controller and a clear financial foundation.

At High Point Advisory Group, we work with PE firms to evaluate what kind of financial leadership is actually required after the close. We don’t push CFO titles or over-engineered solutions. Instead, we help you build the right-sized finance function that balances operational support, strategic visibility, and cost efficiency from Day 1.

This article breaks down the roles of a bookkeeper, controller, and CFO, and explains when — and how — each is needed in a PE-backed company. More importantly, it shows how we help PE firms avoid costly missteps and create scalable financial infrastructure that actually fits the business.

Step One: Understand the Roles

Let’s start by clarifying what each role does — because the titles are often used interchangeably, especially in small companies.

🧾 Bookkeeper: The Transactional Backbone

What they do:

• Record transactions
• Reconcile bank and credit card accounts
• Process AP and AR
• Handle expense reports and payroll entries
• Manage vendor invoices and basic cash flow tracking

What they don’t do:

• Make judgment calls about GAAP treatment
• Prepare management reports or financial analysis
• Review or close the books
• Create budgets or forecasts

Ideal for:
Companies with low transaction volume that need someone to handle the day-to-day.

Risk:
If your only financial “owner” is a bookkeeper, no one is reviewing for accuracy or making sure the numbers support decisions. It's like driving with the lights off — you’re technically moving, but you have no real visibility.

🧩 Controller: The Financial Infrastructure Builder

What they do:

• Own the monthly close process
• Ensure proper accounting treatment (accruals, prepaids, deferred revenue)
• Build and maintain the chart of accounts
• Prepare financial statements and monthly reporting packages
• Manage compliance, tax support, and vendor coordination
• Identify risks in the GL and proactively clean them up

What they don’t do:

• Lead strategic financial planning
• Build multi-scenario models
• Present financials at the board level
• Drive capital strategy or financing negotiations

Ideal for:
Any PE-backed company that needs accuracy, visibility, and structure. This is the most critical first step after a close.

Value-add:
A great controller doesn’t just “do the books” — they create confidence in the numbers. They give the CEO and the PE sponsor the clarity to make decisions and build momentum.

🎯 CFO: The Strategic Financial Leader

What they do:

• Translate investor priorities into financial strategy
• Build multi-year forecasts and budgets
• Lead margin improvement and pricing analysis
• Oversee cash flow strategy and capital allocation
• Prepare board materials and support fundraising or exit

What they don’t do:

• Manage data entry or transactional cleanup
• Handle GL reviews or journal entries
• Run solo without controller-level infrastructure in place

Ideal for:
Companies with multiple entities, significant complexity, or strategic planning needs beyond financial cleanup.

Common mistake:
Hiring a CFO before the foundational work is done — or expecting them to backfill controller responsibilities — often leads to disappointment on both sides. The business isn’t ready, and the CFO ends up pulled into tasks below their pay grade.

What Most Portcos Actually Need First

In the first year after acquisition, the goal isn’t just to add headcount — it’s to build a functional, reliable finance system. For most lower middle market companies, that means:

• Cleaning up the chart of accounts
• Implementing a monthly close
• Reconciling payroll, AP/AR, and sales tax
• Creating investor-grade reporting
• Establishing internal controls
• Supporting audit or lender requirements

This is controller work — not CFO work.

Trying to skip this step by hiring a strategic finance leader too early creates role confusion, slows progress, and often leads to turnover. Instead, we recommend building the controller-level structure first — and layering on CFO insight when the business is ready.

How High Point Supports PE Portcos Post-Close

We’re not just a diligence provider — we help build the financial backbone of the company after the deal closes.

Here’s how our typical support model works:

✅ Bookkeeping & Monthly Close

We provide transaction-level bookkeeping support and implement a monthly close process that produces consistent, timely, and GAAP-aligned financials. Our team handles reconciliations, accruals, and GL cleanup so your reports reflect reality — not just bank balances.

✅ Controller-Level Oversight

Our controllers own the close calendar, review journal entries, standardize reporting, and manage relationships with payroll, tax, and compliance vendors. We work behind the scenes to give your CEO and PE team confidence in the numbers — without requiring a full-time hire right away.

✅ Fractional CFO Support (When Needed)

Once the foundation is in place, we can layer in fractional CFO guidance to support:

• Budgeting and forecasting
• Strategic modeling
• Pricing and margin analysis
• Cash flow strategy
• Board and investor reporting

This modular approach gives you the right capabilities at the right time — without overbuilding too early.

Benefits of Our Model for PE Firms

💡 Speed to Structure
We hit the ground running right after close — implementing processes and visibility fast, without waiting on a full-time hire.

💡 Right-Sized Cost
You get controller-level accuracy and CFO-level guidance, tailored to the stage of the business — not a bloated cost center.

💡 Seamless Reporting
We build investor-grade reporting from day one, including KPIs, variance analysis, and board-ready financials.

💡 Scalability
As your portco grows, we scale with it — adding support or helping you hire the right internal team when the time is right.

💡 Less Risk, More Confidence
Our team brings experience from PE-backed companies, so we understand how to manage both the technical details and the investor expectations.

When a CFO Does Make Sense — and How We Support the Transition

We’re not anti-CFO. We’re pro-timing.

When the business is consistently operating at scale, facing strategic complexity, or preparing for a major growth initiative (like M&A, debt financing, or market expansion), a dedicated full-time CFO makes sense.

When that time comes, we don’t stand in the way — we help you:

• Scope the role based on real needs
• Identify gaps the CFO will be expected to fill
• Support the transition through onboarding and documentation
• Stay on as support until the new team is fully in place

The difference? You’ll be hiring a CFO into a company with clean books, clear processes, and a stable reporting foundation — not chaos.

Let’s Build the Right Finance Team — at the Right Time

If you're wondering whether you need a CFO in your portco, the better question might be:

Do we have the right foundation in place yet?

At High Point Advisory Group, we help PE firms build that foundation. From post-close cleanup to controller support to fractional CFO leadership, we design finance functions that match where the business actually is — and where you want it to go.

Contact us today to talk through your latest acquisition — or get help building a finance team that scales without wasting time or resources.

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