Turnaround CFO Services: Cash Control, Lender Credibility, and a Way Out

The first deliverable is a daily cash report: opening balance, receipts, disbursements, closing balance, and available line, reconciled to the bank every morning. It takes 20 minutes once it is built, and it ends the practice of learning the cash position from a returned ACH. The 13-week forecast follows within the first week, direct method, receipts named by customer and disbursements grouped by category, so the tight weeks are visible while there is still time to move something.

Disbursement control is the part owners resist and later credit with saving the company. Every outgoing payment above a threshold goes through a single approval, usually the turnaround CFO with the owner, on a set schedule: payroll and payroll taxes first, then the items that keep the doors open, then everyone else in a deliberate order. Vendors who were being paid because they called loudest start being paid because they matter. The cash that had been leaving in 40 small decisions a week now leaves in one.

None of this requires a new system or a new hire. It requires a spreadsheet the bank will respect, a bank feed, an aged payable that has been scrubbed of duplicates and disputes, and a rule that nobody cuts a check outside the process. The rule is the hard part, because it applies to the owner too, and it is the one we enforce personally.

• Daily cash report reconciled to the bank, delivered before 9 a.m.
• 13-week direct-method forecast, updated every Monday with variance
• Single disbursement approval above a set threshold
• Payroll and tax deposits protected ahead of every other payment

Vendors are ranked by what happens if they stop, not by how angry they are. Critical suppliers, the ones with no substitute, a lien right, or the ability to halt a job, sit at the top. Utilities, insurance, and the payroll provider sit with them. Below that are the vendors who can be stretched with a conversation, and below that the ones who can be stretched without one. Each group gets a policy: pay current, pay on a schedule, or negotiate a plan. The policy is written and the controller follows it.

The conversation matters as much as the ranking. A vendor who hears from the CFO with a specific proposal, this much now and this much on these dates, with a forecast behind it, usually agrees. A vendor who hears nothing files the lien, pulls the terms, or calls the other vendors. We make the calls, keep a log of every commitment, and never promise a payment the forecast cannot support. The log becomes the payment schedule, and the schedule is kept, because a second broken promise is the one vendors remember.

A company does not run out of cash on the day the balance hits zero. It ran out weeks earlier and did not have the forecast to notice.

The bank already knows something is wrong. It saw the overdraft, the late covenant certificate, and the borrowing base that shrank three months running. What it does not know is whether anyone at the company has a plan. A turnaround CFO calls the lender before the lender calls the owner, with a 13-week forecast, a variance from the last one, and a plain statement of what is being done. The relationship changes when the bank stops finding things out on its own.

If the situation calls for a forbearance agreement, a covenant waiver, or an amendment, we build the financial side: the forecast that supports the request, the weekly reporting package the lender will require, the borrowing base rebuilt from a receivable aging that has been cleaned, and milestones the company can actually hit. Your attorney negotiates the legal terms. We sit beside counsel, translate the numbers, and make sure the company does not agree to a reporting obligation it cannot meet. Lenders forgive a bad quarter more readily than a missed report.

Some companies are short of cash because they grew faster than their working capital, took a large job with heavy mobilization cost, or lost the one customer that paid on time. That is a liquidity problem. It is painful and it is solvable: collections, billing discipline, vendor terms, a line increase, or a bridge from ownership. Other companies are short of cash because the work itself loses money, and no amount of collection speed fixes a margin that is negative. That is a business-model problem, and the diagnosis has to come early and be said out loud.

We rebuild gross margin by job, by customer, by service line, and by crew from the transaction level in the first 30 days. The results are rarely subtle. One division subsidizes another. A key customer is unprofitable at its negotiated rates. The labor burden used in estimating is 12 points below the burden being paid. From there the actions are specific: reprice, exit, stop bidding certain work, and cut the overhead that was sized for a company that no longer exists.

Protecting the core means deciding what the company is when it is smaller: the profitable work, the customers who pay, the crews that hit their hours, the four people who could not be replaced. Cuts are made around that core, not through it. A turnaround that saves cash by gutting the part of the business that makes money has a short second act.

When an out-of-court solution is not available, the company may enter a formal proceeding. Our principal has served as CFO through a Chapter 11 process for a multi-entity construction and field-services organization, running debtor-in-possession operations and producing the court-required reporting. That experience is the difference between a finance function that supports the case and one that becomes the case's biggest problem.

In a formal proceeding the turnaround CFO builds and maintains the debtor-in-possession budget, produces the cash and operating reports the court and the lender require on their schedule, works through vendor and critical-payment questions with counsel, supports the claims process with books that reconcile, and keeps the operating business running while the case proceeds. Budget-to-actual variances in a Chapter 11 are read by everyone with a stake in the outcome, and they have to be right the first time.

One line we repeat on every engagement: we do not give legal advice, and nothing on this page is legal advice. Bankruptcy counsel decides whether to file, when, and under what chapter, and runs the legal process. We work alongside counsel, providing the financial leadership the case requires and keeping the company's numbers credible to everyone reading them, inside the courtroom and outside it.

Every turnaround points at an exit, and the exit should be named early even if it changes. Refinancing means a new lender, an asset-based facility, or a term loan that replaces a bank that wants out, and it requires a run of monthly numbers that make the story believable. Sale means a buyer for the whole company or for the profitable division, and it requires books that survive a quality-of-earnings review and a normalized margin story. Orderly wind-down is the least-discussed option and sometimes the one that preserves the most value for the owner, the employees, and the creditors.

We prepare the company for whichever path fits. For a refinancing, the lender package and the forecast history that shows the forecast has been right. For a sale, the data room, the adjusted earnings schedule, and the working capital analysis that determines the closing adjustment. For a wind-down, a collection and liquidation forecast, a vendor and employee communication plan, and a sequence that satisfies obligations in the right order, with counsel advising on the legal priorities. The goal in every case is that the owner chooses the ending rather than has it chosen.