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CHAPTER 1
Where They Were
Lendwise finances loans to small and midsize companies using funds drawn from its own balance sheet. The balance sheet is backed by a mix of equity and debt from early investors. Demand for quick financing surged, and within a short period the loan book tripled. Unfortunately, the finance stack did not keep pace.
The team had installed Xero in a rush, mapped only the operating bank account, and left much of the loan activity outside the ledger. They also relied on a third‑party loan‑management system that pushed out weekly CSV files, but the format collapsed principal, interest, and penalty income into a single column. As a result, every month‑end close involved hours of copy‑and‑paste work and produced reports that neither matched cash nor satisfied investor questions.
When a new funding round began, prospective investors requested timely, accurate financial statements, proof of effective loan loss provisioning, and evidence of tax compliance. The finance manager admitted that any figure beyond cash in bank was an estimate. Knowing the round was at risk, the founders asked Alehar’s Fractional CFO team to rebuild the finance infrastructure and establish a repeatable close process.
CHAPTER 2
What We Did
1. Diagnosing the system failures
Our first task was to trace every data source. The operating bank was connected to Xero, but the separate settlement account that handled loan disbursements and repayments had never been linked. The loan‑management platform produced detailed transactional exports, yet no one in finance had the time or tools to break those files into the components required by accounting standards. The absence of proper coding meant interest and penalty income flowed into generic revenue buckets, obscuring margins and impairing ratio analysis.
2. Re‑engineering the data flow
We rebuilt the chart of accounts to separate operating cash, settlement cash, principal outflows, interest income, penalty income, and fee income. Both bank accounts were synced with Xero. To solve the loan-management system problem, we created a transformation workbook in Google Sheets that ingests weekly exports. The workbook parses each row, splits the lump sum into principal, accrued interest, and penalties, and assigns them to the correct ledger codes. A short script converts the sheet into a Xero‑ready import file, allowing the finance team to post an entire week of transactions rapidly.
We then reconstructed twelve months of historical activity. Every disbursement, repayment, and fee now ties back to a unique loan ID, creating a clear audit trail. Once the history was balanced, we established a month‑end calendar with fixed cut‑off dates, reconciliation checklists, and approval workflows. The first complete close took place ten business days after period‑end, beating the investors’ deadline and bringing relief to the finance staff who had previously spent half the month cleaning data.
CHAPTER 3
Where They Are Now
The revamped finance engine now produces management accounts ten business days after each month ends. Reports break out principal, interest, and penalties, allowing lenders and equity investors to track yields with confidence. Tax filings are prepared without manual work‑arounds, and the loan book balances to the cent. Armed with credible financials, Lendwise reopened discussions with prospective investors and secured both fresh equity and an expanded credit line.
The engagement shows how a focused Virtual CFO intervention can transform a rapidly scaling but error‑prone finance operation into a reliable platform for growth, even when the business model involves complex, multi‑source funding and third‑party loan software.
