Focused Financial Leadership

Platform financial management gives middle market portfolio companies a significant competitive advantage

AI in Corporate Finance Services

Signature FlexSuite

FlexSuite vastly improves controls, automates workflows, creates efficiencies, streamlines financial operations, and creates actionable data visibility.

The future is streamlined accounting, finance, and a full suite of back-office capabilities in a virtual platform operating model.

Middle Market Companies Are Often Highly Inefficient

Finance, accounting, and other administrative functions can be highly inefficient in lower and middle market companies. The most significant issues are

  • Inadequate controls and standardized processes

  • Antiquated systems

  • Manual processes

  • Delayed and potentially inaccurate reporting, and

  • Talent gaps & overstaffing.

All leading to suboptimal outcomes and excessive cost.

PE sponsors should require proper controls, visibility into company operations, timely reporting, and prudent capital management. Many portfolio management teams, however, fall well short of these objectives.

Equity funds from 2019-2023 invested between $1.3 to $2.2 trillion annually in small and middle market companies, defined as companies with annual revenues between $10 million and $1 billion. D&B estimates there are approximately 200,000 middle market companies in the U.S.

Middle market companies operate in an environment where inefficiencies and excessive cost can significantly impact profitability. Standardizing and upgrading the efficiency of administrative functions is an economic opportunity for sponsors of PE-backed portfolio companies.

With Signature CF creating economies of scale, portfolio companies position themselves for growth, execution, and successful exit events.

Why administrative streamlining is needed:

  • 1. Resource Optimization

    Middle market companies often have limited resources compared to larger enterprises. Efficient administrative functions help optimize the use of these resources, ensuring that every dollar is spent wisely.

  • 2. Scalability

    As companies grow, their administrative processes need to scale without proportionally increasing costs. Efficiency ensures that administrative functions can handle increased volumes and complexity without becoming bottlenecks.

  • 3. Competitive Advantage

    Streamlined operations allow middle market companies to be more agile and responsive to market changes, providing a competitive advantage over less efficient rivals.

  • 4. Cost Management

    Inefficiencies lead to higher operational costs and erosion of profit margins. Efficient administrative functions help in controlling costs and lowering direct spend.

  • 5. Regulatory Compliance

    Efficient processes ensure timely and accurate compliance with regulatory requirements, reducing the risk of penalties and preserving company reputation.

  • 6. Transaction Readiness

    Portfolio companies must view a future transaction event with certainty, a process that should begin from inception of the sponsor investment. Structuring documents, policies & procedures, general ledger accounts and transactions, financial reports, and audit-tested controls and statements is an opportunity to present the company in a clear manner with ready-access to due diligence inquiries.

Where Inefficiencies are Commonly Found:

 

1. Manual Processes

Reliance on manual processes is far too common. Tasks including data entry, account reconciliations, report generation, and many others are time-consuming and prone to errors.

2. Fragmented and/or Inadequate SystemS

Using disparate systems that do not communicate with each other leads to data silos, redundant efforts, and gaps caused by inconsistent information. Integration of all processes on a state-of-the-art platform is essential.

3. Failure to Automate

Middle market companies often lag larger peers in adopting technologies that can streamline routine tasks and improve accuracy. Automated workflows, gen AI monitoring, and system process automation will significantly enhance efficiency.

4. Ineffective Communication

Poor communication and collaboration among departments leads to delays, misunderstandings, and sub-optimal decisions. Efficient communication channels and collaborative tools are essential to mitigate these issues.

5. Dated Technology

Using outdated software and hardware can hinder productivity. Investing in modern, scalable technology solutions, effectively utilized, produces a high ROI. 

6. Staff Misalignment and Inadequate Training

Employees who are not motivated, lack the requisite skill set, or are not properly trained will often struggle to use systems and follow process controls effectively. Ongoing development programs powered by the Signature FastTrack platform ensures skilled execution of key responsibilities.

7. Redundant Processes

Legacy processes that have not been re-evaluated are often labor intensive. Regular process reviews and re-engineering efforts using the latest tools are necessary to identify opportunities.

Incorporated 2024 by Jeffrey Allen, Ph.D., CFO of five companies (2005 – 2024)

Founder of Signature Corporate Finance
 

Jeff Allen is an expert in corporate finance with extensive experience as a strategist, CFO, communicator, and entrepreneur. A proven leader, he has overseen the full CFO suite including capital formation, acquisitions, exit events, all types of debt finance, compliance, stakeholder relationships, treasury, forecasting, budgeting, modeling, data analytics, system implementations, and risk management. 

Jeff’s career exemplifies his commitment to ethical business practices, innovative problem-solving, and forward-thinking leadership. As CFO, he secured > $2B in debt and equity capital across five PE-sponsored companies.

    • Founder & CEO: Signature CFO LLC, Signature Corporate Finance, Signature FastTrack 

    • Executive VP & CFO: Navigator Energy Services, NES II, Navigator CO2 Ventures 

    • Senior VP & CFO: JP Energy Partners L.P., LONESTAR Midstream Partners L.P. 

    • Senior Finance Associate: Hewlett-Packard Co.

    • Designed corporate finance solutions, educational materials, analytical tools, and strategic recommendations for 100+ organizations

    • SMU, Cox School of Business 

    • Darden Business School, UVa

    • AACSB National Doctoral Fellow, Purdue University 

    • Ph.D., Finance and Econometrics, Purdue University 

    • B.S., Finance, Utah State University (summa cum laude)

    • Authored numerous articles in top finance journals

    • “Essentials of Financial Practice: Valuation, Analysis and M&A”, reference book

    • Recognized for teaching excellence and community service at Darden and SMU