Top 5 reasons why private equity firms use Finance as a Service (FaaS)

Finance as a service (FaaS) brings many benefits to all types of companies. Private equity firms know that they need to leverage the best tools and services to help their portfolios excel, which is why they often recommend Consero.


We at Consero have found out from our numerous dealings with private equity firms that there are a few key characteristics that we possess which make clients stay with us, or others to hire us.

There are several reasons that our private equity partners continue to collaborate with us and include us in their playbook, the most notable are:

  • Speed to optimization
  • Improved reporting and data
  • Many private equity firms consider us to be CFO insurance
  • Better scalability
  • 30% to 40% overall cost savings

Let’s get into more details on each of the reasons to adequately show you why private equity firms tend to use FaaS.

1.    Speed to optimization

When private equity firms invest in a company, the first and most crucial thing they try to do is grow that company as fast as possible.

After these acquisitions occur, it’s often the case that the accounting and finance department starts to hinder that growth. But why does that happen?

There can be many reasons for this. For example:

  • The departments don’t have the right systems in place or processes that will help them achieve this growth for the company.
  • They are unable to increase the revenues of the company.
  • The finance team members don’t have the right skill set.

The same problems can occur in all industries, including: softwareprofessional services and eCommerce, the healthcare industry and more. When there is a problem in the finance department, we’ve found that what most companies tend to do usually follow the same steps:

1. They hire a team.
2. The team researches systems and they select one that fits best.
3. Then they configure that same system and perform its complete implementation.
4. After all of that is done, they have to train all the users for that system.

It’s fairly apparent that this can take very long to achieve. Most companies need from 18 to 24 months to optimize the finance and accounting function. Another problem here is that all their energy is spent on trying to optimize everything and get to that point of full implementation, while they still have to keep up with the management of the day to day operations.

With the Finance as a Service model, you get optimized in only 30 to 60 days. That means that we’ll have all the accounting systems and processes fully implemented and we can deploy them more rapidly and cost-effectively than an in-house team ever could.

When you’re in private equity, time is money, so the faster you can get this up and running and optimized, the faster the company can grow, and the quicker you can acquire other companies as well.

2.    Improved reporting and data

Enhanced reporting and data are critical for private equity firms. In many cases when they invest in a company, it happens that the company has an accounting manager or controller but does not have a strategic CFO. As a result, their reporting is rarely up to the sophisticated level the private equity firms want.

Private equity firms use data, metrics, and analytics to drive the growth of the company they acquire. They also understand what’s really going on with companies and what motivates them. For those reasons, they can adequately build and improve the company. If they don’t have all the requirements necessary to achieve this, they are unable to view the data they need to make the best decisions that will move the company towards growth.

With Consero, you avoid the lack of these metrics and analytics that private equity firms need because our model already allows for better reporting and data, giving you the necessary metrics and KPIs in an easy-to-read format.

3.    CFO insurance

We’ve found through time that many private equity firms consider Consero’s Finance as a Service model as CFO insurance. That’s the case because we:

  • Take over the day to day mundane tasks.
  • Reduce the time needed with administration and financial analysis.

With all of that and much more taken care of, the CFO can focus on the more important things like the strategic aspects of the job and the growth of the business.

All in all, we enable the CFO to be the right hand to the CEO and not spend time on routine and tactical things but rather on investigating things like how to turn management information into real competitive intelligence. For all of that, we truly are CFO insurance for private equity firms.

4.    Better scalability

Our model allows companies to be scalable. We can give a company the right level of resource for the right task, and we can grow in increments of half of a person, for example.

Precisely because we are appropriately structured, when a company goes through an acquisition, we have enough resources that can quickly jump in and help with acquisition integration by:

  • Setting up the right systems,
  • Getting that company streamlined and on the same process,
  • All the while we’re not distracting the day to day accounting team.

That allows us to be far more scalable than in-house teams. After you go through with an acquisition, your existing accounting teams have to work to get that acquisition integrated. What we’ve seen is that in many cases, that just doesn’t happen because they don’t have the time to get that done.

5.    30% to 40% overall cost savings

Another reason private equity firms work with Consero is that we are more cost effective than having an in-house team.

Besides that, we’ve also seen that these savings can last indefinitely, even as companies continue to grow. That has to do a lot with:

  • Our bigger labor pool of finance experts.
  • The fact that we work with companies that are the same as yours, so we’ve already figured out the best process for you.
  • We are very efficient at what we do.
  • We automate a lot more manual activities.

All in all, these are the five main reasons why we firmly believe private equity firms continue to partner with us and why our service is much better than what any in-house team can offer.

Consero FaaS: Disrupting the Outdated Traditional F&A Model

  • Cash to GAAP conversion
  • Clean-up work
  • Interim oversight & support
  • Accounting software Implementation

Build it Yourself Solution

  • CFO / Interim CFO
  • Consultants / VARs

Consero FaaS Solution

  • CFO / Interim CFO
  • or Consero Interim CFO
  • Consero Setup/Transformation
Ongoing F&A
  • Monthly financials
  • Daily accounting support
  • Management reporting
  • Integrate add-on acquisitions

Build it Yourself Solution

  • CFO
  • Controllers & Accounting Team
  • Enterprise Accounting Applications

Consero FaaS Solution

  • CFO
  • or Consero Fractional CFO
  • Consero FaaS Enterprise F&A Software and Services

New PE Platform Investment F&A Challenges

Founder Owned Company Accounting:
  • Existing accounting done on a cash/hybrid basis
  • Run on SMB accounting software and other disparate applications
  • Inability to produce auditable financials
  • Lack of know-how to develop projections & KPIs
  • No consistency/structure to customer contracts
  • Underqualified staff
  • Non-scalable manual processes
Carve-Out Accounting:
  • Required to move off parent company accounting applications in a timely fashion
  • Have to build an entire F&A team
  • No documented operational policies and procedures
To Optimized Finance & Accounting:
  • Monthly financials available in 5-10 business days
  • Audit and diligence ready support details
  • Integrated enterprise grade accounting software
  • Budget and forecast reporting
  • Business KPIs
  • Efficient & scalable processes for rolling in add-ons