Special Situations CFO: Cash Crisis, Restructuring, Integration, and Wind-Down

A cash crisis is any week in which the company cannot say with confidence that payroll will clear. It arrives as a bounced vendor payment, a line of credit at its limit, a tax deposit that was skipped to make Friday, or a customer receipt that has slipped for the third time. The instinct is to work harder on collections. The correct first move is to stop the bleeding: know the position every morning and control every dollar that leaves.

In the first two weeks we build the daily cash report reconciled to the bank, install a single disbursement approval above a threshold, protect payroll and tax deposits ahead of every other payment, and issue a 13-week forecast built from actual receipts by customer and actual payables by category. Vendors are ranked by consequence and told what to expect. The owner stops being the person who decides which checks go out at 4 p.m. on Friday.

The deliverable at day 14 is a controlled cash position: the forecast, the disbursement process running, the vendor commitments logged, payroll and taxes protected, and a written statement of whether the crisis is a timing problem or something structural. That statement, delivered to the owner and where appropriate to the lender, determines whether the engagement ends in a month or turns into the next section.

A turnaround begins where a cash crisis ends: the bleeding is controlled and the question becomes whether the business, as it is, can earn its way out. The answer comes from rebuilding gross margin at the transaction level by job, customer, and line, and from an overhead review that asks what the company would cost to run if it were the size its profitable work supports. Some businesses need a pricing correction and a slower quarter. Some need to exit a division. Some cannot be fixed outside a formal process, and the honest analysis says so.

The first two weeks produce the margin diagnosis, the cost and pricing actions with owners and dates, and the version of the 13-week forecast that shows what happens if those actions are taken. Where the lender is involved, we prepare the package and open the conversation with a forecast in hand. Where a formal restructuring is on the table, we build the financial analysis counsel and ownership use to weigh an out-of-court workout against a Chapter 11 filing, and if the company files, we provide the debtor-in-possession budget, the court-required reporting, and the operating finance leadership the case requires, alongside counsel. We do not give legal advice; bankruptcy counsel makes the legal decisions and runs the legal process.

The deliverable is a turnaround plan the lender, the owner, and counsel are working from together: the same forecast, the same actions, the same milestones, reviewed on the same Monday. A plan that exists in three versions, one for the bank, one for the owner, and one for the lawyers, is three plans, and none of them is being followed. For the full description of that work, see the turnaround CFO page linked below.

Every restructuring has a moment when someone asks for last month's numbers and the room goes quiet. We make sure that is not your room.

You closed on the acquisition and the celebration lasted a weekend. On Monday there are two general ledgers, two payroll providers, two definitions of gross margin, and a seller's bookkeeper who has given notice. The purchase agreement has a working capital adjustment due in 90 days, the lender who financed the deal wants consolidated reporting from month one, and the buyer's own controller is now responsible for a business she has never seen the inside of.

Our principal led regional finance for a building-materials business through its acquisition into a larger platform, supporting the quality-of-earnings and audit work, integrating reporting and controls, and standardizing KPIs across acquired operations. In the first two weeks after close we take the same approach: map both charts of accounts to one, secure the cash and banking transition, confirm the working capital calculation against the purchase agreement, put the acquired business on the buyer's close calendar, and define the five to ten KPIs both businesses will report the same way from the first combined month.

The deliverable is a consolidated close for the first full month after the transaction, a working capital adjustment schedule you can defend, a controls and reporting integration plan with dates, and a KPI package that lets the owner compare the acquired business to the original one on the same page. Where the deal is still ahead of you, we support diligence from the buy side and prepare the sell-side books for someone else's quality-of-earnings review.

• Chart of accounts mapping and a single close calendar from month one
• Working capital adjustment schedule tied to the purchase agreement
• Consolidated reporting for the lender, with intercompany reconciled monthly
• KPI standardization across the combined business
• Quality-of-earnings and audit support, buy side or sell side

Some situations begin with a letter from the bank. A covenant default, a reservation of rights, a request for a field exam, a borrowing base that has been reduced because the receivable aging failed the eligibility test, or a quiet suggestion that the company find another lender by year end. The company may be profitable. The problem is that the lender no longer trusts the numbers, the forecast, or the person delivering them, and the way back is to fix all three.

In the first two weeks we rebuild the covenant calculation from the loan agreement, not from memory, and forecast it 13 weeks forward. We rebuild the borrowing base from a receivable aging that has been scrubbed of disputed, cross-aged, and ineligible accounts, so the number the bank receives is one that survives a field exam. We open the conversation with the lender with a forecast, a variance history where one exists, and a proposed reporting cadence. If a forbearance or amendment is needed, we produce the financial terms and the weekly reporting; your attorney negotiates the legal document.

The deliverable is a lender package the bank can rely on and a reporting rhythm the company can sustain. Often the second matters more. A forbearance with a weekly reporting requirement the controller cannot meet is a default with a new date. We size the reporting to what the company can actually deliver, and then we deliver it, for as long as the agreement runs.

Sometimes the right answer is to sell the company, or a division of it. Sometimes the right answer is to close it deliberately, collect what is owed, satisfy obligations in the correct order, and return what remains to the owner rather than to a receiver. Both are finance projects with a beginning and an end, and both are done badly when started late.

For a sale, the first two weeks produce the adjusted earnings schedule with every add-back documented, the working capital analysis that will determine the closing adjustment, a data room organized the way a buyer's diligence team reads it, and a list of the balance-sheet items a quality-of-earnings review will question. For a wind-down, the first two weeks produce a collection and liquidation forecast by week, a vendor and employee communication plan, and a payment sequence reviewed with counsel for the legal priorities, so the company's last quarter is planned rather than improvised.

The deliverable in either case is a written plan with a calendar, the reporting the buyer or the creditors will need, and a finance function that continues to close the books until the last month, because the final tax return and the final accounting still have to be right. Companies that stop closing the books in the last quarter discover that the ending costs more than the plan said it would.

These engagements are priced as monthly retainers sized to the situation, starting at $8,500 a month, which is our operating CFO tier. Formal proceedings and full-time integration leadership run at the embedded tier from $12,500. Every engagement has a defined first two weeks, a written scope with named deliverables, and a step-down: when the crisis is controlled, the integration is closed, or the lender is satisfied, the engagement moves to a fractional cadence or ends. Nobody wants a special-situations CFO for longer than the situation lasts, including us.

The scope is full: we own the numbers, attend the meetings, make the calls, and put our name on the reporting. Your bookkeeper, controller, CPA, and attorney keep their roles and get a coordinator. When the situation ends, everything we built is documented and handed to whoever runs finance next, with the models, the assumptions, the lender history, and the open items in one place.