📬 The Speedrun Rebuild: Achieving Finance Maturity Fast

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The Mailbag lives and dies by your questions. Send me your trickiest CFO dilemmas (anonymously if you wish), and I’ll answer them here.

👉 Send me your questions by filling out this form.

Now, on to today’s Mailbag.

We’ve got some great topics. Here’s what’s on tap:

Now, let’s get into it.

Jack L. from Germany asked:

I just started as a CFO in a small hospitality/rental business with a few thousand apartments and likely €20m revenue in 3 countries. Accounting is completely outsourced for the majority of payments. There is no in-house treasury or FP&A.

What would your roadmap be to take this in-house? Start with one country, or with a function, or with a part like AP or AR?

The current way is not sustainable. Closing takes too long and is way too expensive. Thanks for your insight.

Thanks for the question, Jack.

You’re inheriting a bit of a gift here. Most CFOs trying to modernize finance are stuck doing open-heart surgery while the patient is running a marathon. They need to transform the engine while the team is drowning in month-end.

You don’t have that problem. Your day job is outsourced, which means you have a clean opportunity to speedrun finance maturity from a blank sheet.

How to approach it:

1. Treat in-housing like a capex business case

Outsourcing today is slow, manual, and expensive.

That is your ROI story. Yes, you’ll need upfront investment in hiring, tooling, and process design, but the payback will be obvious.

2. Start with accounting, not FP&A

Forget FP&A for now. FP&A is useless without reliable, timely actuals.

Your first chapter is building the accounting engine in-house, and specifically the transactional core:

Do not copy today’s broken processes. If you simply “lift and shift,” you will inherit every flaw and spend the next 18 months firefighting, losing your transformation opportunity.

Rebuild those workflows from scratch

3. Sequence the countries last

Do not in-house by country. In-house by function. You will have the best feel for the right order, but at a guess:

AR/billing → bank recs → AP → GL → close → treasury → FP&A

Once you have your core engine running, then adapt for country differences (VAT, local taxes, statutory reporting).

Just make sure you map regulatory and currency touches early so there are no surprises later.

4. Keep the outsourced provider onside

This part is important.

You cannot afford for the outsourcing partner to get spooked once they learn your are not a perpetuity revenue for them, and deprioritize you. You still need them to keep the lights on while you build your new machine.

Be transparent, be professional, and treat them as a transition partner. Give them a timeline and work with their team on knowledge transfer. Keep very close to the balance sheet as you start to execute the transition. If things are going wrong, that’s where it will show up.

After the engine is built:

Once accounting is humming, FP&A and treasury become trivially easy to layer on. At that point, you can build a lightweight FP&A function in your sleep.

TLDR: Use the fact that everything is outsourced, slow, and expensive to rebuild finance from a blank sheet. In-house accounting first, automate it end-to-end, and only add FP&A once the engine is humming.

Back to Basics from New York asked:

Your newsletter has been incredibly helpful, especially for someone like me without a formal finance background.

I’ve just joined a rapidly growing but very old-school fabrication services company. We do project-based work with long job cycles, lots of WIP, heavy material purchasing, and milestone billing. But internally, it operates like it’s still the 1980s: paper timecards, slow AP/AR, multi-week close, limited systems, and very little process discipline.

I’m trying to put the right foundations in place before driving broader changes around automation, technology adoption on the floor, getting ERP (question for another time), and KPI-driven leadership.

Two questions I’d love your perspective on:

1) How do you determine a company’s true Working Capital Requirement (WCR)?

Not just the balance-sheet snapshot, but the structural level of capital permanently tied up in the cycle versus short-term noise, especially in a project-based business with WIP, under/over-billings, and messy processes. WCR seems to be the most important thing to understand deeply as I get onboarded into the company.

2) As a CFO office, what are the must-have foundations you start with before tackling broader transformation (automation, cultural change, operational KPIs, etc.)?

Should the priority be clean data, fixing basic cycle times (AP entry, billing delays), WCR/forecast discipline, or something else?

Thanks for the question. This is a really good one, and your instincts are absolutely right.

In a project-based fabrication business with long job cycles, messy WIP, milestone billing, and manual processes, working capital is not just important, it’s existential. The graveyard of construction and fabrication businesses is full of companies that were profitable but didn’t understand their cash cycle.

I’m assuming you don’t have an immediate existential liquidity problem (that’s a different playbook), but you do have a visibility problem.

With that framing, I’ll take your questions in turn.

1) How to determine the true Working Capital Requirement

You’re right to be suspicious of a simple balance sheet snapshot. That only tells you where you happened to be standing on one day of the month, not what the business structurally needs to function.

I’d break this into three steps.

Step 1: Decompose historical working capital properly

Start by going back at least 24 months and tracking AR, WIP (including under/over-billings), and AP month by month. But don’t stop at totals. Go deep:

Averages mean nothing in working capital. It’s the peaks and troughs that matter. So that’s what you are looking for. Find patterns. Which type of projects soak up the most cash? Where does WIP sit the longest? Where do receivables blow out?

Then, for each key movement, ask this question: Is this inherent to the business model, or is this a process failure?

Some working capital is structural. Long lead materials, milestone billing, retainage, and payroll timing. That capital will always be tied up.

Some working capital is self-inflicted. Late billing, sloppy time capture, disputes, poor job close-out, weak collections.

You need to separate the two. As the modeling (and the fix) is very different.

Step 2: Understand intra-month cash volatility

This is the bit most people miss.

Monthly balance sheets lie in project businesses. Payroll, subcontractors, and materials often go out before cash comes in. If you only look at month-end, you’ll underestimate how much liquidity the business actually needs to survive day to day.

Map out a typical month:

Put a dollar value on the peak cash trough during the month. That trough is part of your real working capital requirement. You need to explicitly fund it until you can reduce it.

Step 3: Normalize for scale and growth

Once you understand history, normalize it.

Ask: “At steady-state, with this mix of projects and this level of discipline, how much net working capital is permanently tied up per dollar of revenue?”

That ratio is gold. It lets you answer the most important question of all: “What does growth do to cash?”

In project businesses, growth often consumes cash before it creates it. If revenue grows 20 percent and working capital grows faster, you will feel poorer while “doing better.”

That normalized number is your true WCR. And it may not be one number, if different types of growth drive different types of working capital profiles.

2) CFO foundations before broader transformation

You’re right not to jump straight to ERP or shiny dashboards.

First priority: finance operations

Before strategy, culture, or KPIs, fix the engine room.

In your world, that means:

This is not glamorous work, but it is everything. If billing and AR are slow or sloppy, no amount of forecasting will save you. (It will also be hopelessly inaccurate.)

Second priority: cash visibility and forecasting discipline

Once the flows are clean (or at least the holes are understood), build a rolling cash forecast.

I’d start with an 18-month rolling monthly cash flow, built bottom-up from projects. Yes, it will be wrong at first. That’s fine.

The value isn’t initial accuracy. The value is iteration. Every miss teaches you something about how cash really moves through the business. Over time, those dynamics get wired into your bones, and you start making instinctively good cash decisions.

That’s when you become dangerous in a good way.

Third priority: cycle time reduction

Only once you can see clearly do you start pulling levers:

Every day you shave off the cycle drops straight into cash.

Then, and only then, technology and KPIs

ERP, automation, shop-floor tech, and KPI-driven leadership all work far better once the underlying processes are sane.

Best of luck.

TLDR: In project businesses, working capital is the business, so fix billing and cash cycles first, understand your true structural cash needs, and only then worry about systems and transformation.

Secret COFO from Wouldn’t you like to know, weather boy asked:

Background: I'm a second-generation COO/CFO in a family business that's grown from $3M to nine figures while I've held my seat. Our founder (my mom) was a great 0 to 1 founder, but not a great 1 to n CEO. She takes three weeks off, then returns and acts like we've all been running the place without supervision. When she returns, she halts all progress until she's caught up on every detail. I've tried establishing clear criteria for what needs her input, but when she re-engages, she wants full operational control down to how tape guns are arranged in the warehouse and personally calling our FedEx rep to complain.

Here's the issue: her relationships and experience built this company. We genuinely need her gray-hair and no-hair relationships and institutional knowledge—but in an advisory capacity, not an operator role. The business has evolved past needing someone to audit shipping supplies. We're bottlenecked because she's uncomfortable making strategic decisions but won't release the authority to make them, so I just have to "undermine" her to get anything done.

What's the first step to building an advisory board that naturally shifts strategic authority and gets her out of the day-to-day? How do I frame this as "building the right structure to reach our goals" rather than "we need you to get out of the way"?

This is a common problem in founder-led businesses. A founder who can’t let go, but needs to in order to grow the business.

The real answer lies here in the specifics of the business and even in the relationship between you and your mom. So, I would start by... tidying your room… I guess?!

But with that disclaimer, let me make a few points.

First up… your mom must be a total savage. She’s built a business from zero to 9 figures as a founder CEO?! That’s exceptional. Dude, you won the ovarian lottery.

Huge props to her, and to you for being there through most of the journey. Congratulations.

That said, this has all the hallmarks of “what got you here won’t get you there.”

In my experience, when founders behave like this, it’s rarely about control for control’s sake. It’s usually fear. Fear that the values they built the company on are being diluted or lost as the business scales.

You said the business has evolved past needing someone to audit shipping suppliers. But, has it? From her perspective, those details might be symbolic. As businesses grow, they don’t get permission to care less about the small things, they get more resources so they can care about them properly. I suspect she’s sending a broader message: the little things matter. These are just the visible examples.

It also sounds like she’s struggling with her changing role. That’s normal, and it’s hard. So part of your job is to make that transition safer for her.

Start by identifying the things that trigger her. The pet peeves, however irrational or outdated they seem to you. Then make them non-issues. Handle them better than she ever did. Systematize them. Over-communicate on them. Show her, repeatedly, that the new way actually protects the things she cares about.

Then sit down together and write out her non-negotiables. Call them golden rules if you want. What absolutely must never break, regardless of growth, delegation, or geography? Once you agree to them, make them sacred. Build them into the operating rhythm. That way, when she swoops back in after three weeks away, her audits come up empty.

As her confidence in the day-to-day grows, you can start reshaping her role rather than removing it.

Think less “get out of the way” and more “lifetime president.” A custom job spec built around the things she’s brilliant at and genuinely enjoys. There is always some undelegatable founder magic: key relationships, ambassadorial duties, cultural storytelling, special customers, maybe even employee communication. And yes, sprinkle in just enough operational detail so she still feels connected.

The advantage of a family business is that you don’t have to be boxed in by conventional titles or reporting lines. You can design something that actually fits the humans involved.

Another lever is bringing in an external chair or senior advisor. Someone she respects. Ideally, an industry veteran, even better if they’re a founder who’s been through the same transition. Sometimes it takes a non-family voice to say the things you can’t say.

I’ve seen this work. It’s not instant, but it changes the conversation.

But let’s be honest: this isn’t just a business problem. It’s family politics. You’re navigating identity, legacy, trust, and control all at once. I’ve given you some practical levers that might help, but there’s no playbook that solves this cleanly.

TLDR: Your mom is an absolute savage founder. The move isn’t to sideline her, it’s to honor what made her great, lock those standards into the system, and then elevate her into a role where her judgment and relationships still shape the company without choking day-to-day execution.

PS: Thanks for reminding me of one of the funniest things to ever grace the internet:

A few of the biggest stories that every CFO is paying close attention to. This is the section you might not want to see your name in.

First, the Oracle of Omaha, now his CFO…

Legendary CFO Marc Hamburg is set to retire after 40 years at the helm (although granted, it must be one of the easiest CFO gigs there is). Next up: Charles Chang, moving up from his current role as CFO of BH Energy.

SEC Chair Paul Atkins pointed out the net decline in IPOs over the last 30 years, and he’s not wrong…

Paul wants to make IPOs great again with a 3-point plan:

All of these are welcome, in particular point 1. Do 200 pages of fine print disclosures really help investors? I say not.

Good luck, Paul.

Let me know what you thought of today’s Mailbag. Just hit reply… I read every message.

The expansion of the CFO role is one of the most overblown clichès going. So is the COFO title a real evolution of the CFO role, or is it window dressing over a CFO’s existing responsibilities? In the most recent edition of The Boardroom Brief, we dug in. Check it out now.

And on Saturday, we continued our Playbook series on finance transformation with a deep dive into creating a clear vision and momentum. Check out the newsletter here.

Disclaimer: I am not your accountant, tax advisor, lawyer, CFO, director, or friend. Well, maybe I’m your friend, but I am not any of those other things. Everything I publish represents my opinions only, not advice. Running the finances for a company is serious business, and you should take the proper advice you need.