What does a robust monthly close look like?

A robust close produces reconciled balance-sheet accounts, disciplined cut-offs, variance analysis and a clear bridge from profit to cash. Close monthly on a repeatable timetable. Use weekly flash reporting where cash, revenue or working capital move quickly, but do not treat it as a substitute.

How should I reconcile EBITDA to cash?

Bridge EBITDA to operating cash flow through receivables, payables, inventory, deferred revenue, taxes and other working-capital movements. Then account for capex, financing and distributions. If the bridge cannot be explained each month, the close is not finished.

What should a monthly management pack show?

Show the P&L, balance sheet, cash flow, working-capital movements and the operating drivers behind them. Compare actuals with budget and prior periods, explain material variances, update the forecast and state the decisions management needs to make.

When does finance require CFO-level ownership?

CFO-level ownership becomes necessary when management must allocate capital, run scenarios, manage financing or covenants, or give a board and investors a defensible forward view. Whether the role is full-time depends on how continuous the workload is, not a fixed revenue threshold.

What do investors and lenders test in financial diligence?

Both test whether historical results reconcile and the forecast can be traced to operating drivers. Investors focus on growth quality, unit economics, concentration and returns. Lenders focus on cash conversion, leverage, debt service, covenant headroom and the downside case.

How do I get my business financials in order?

Get your financials in order by closing the books every month, tracking margin by product or service, forecasting cash, and comparing actual results with your plan. Together, these give you the current view you need to run the business.

These are also the numbers investors, lenders, and buyers will ask for. Build them early and you can make better decisions now, then move faster when you need capital or consider a sale.

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Financials glossary

Explore the glossary

Six terms used in financial reporting, financing decisions and diligence.

Adjusted EBITDA

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric used to assess a company's operational performance. It modifies the standard EBITDA by excluding non-recurring, irregular, or non-cash expenses to provide a more accurate reflection of ongoing profitability.

Covenant

In the context of debt, a covenant is a clause in a loan agreement or bond indenture that imposes certain conditions or restrictions on the borrower. Covenants are designed to protect the interests of lenders by ensuring that the borrower maintains a certain level of financial health and operates within agreed parameters. These conditions can be financial (financial covenants) or operational (non-financial covenants) and are critical in debt agreements to mitigate risk.

Leverage

Leverage in Mergers and Acquisitions (M&A) refers to the use of borrowed capital to finance the acquisition of a company. By using leverage, buyers can increase their purchasing power and potentially enhance returns on investment. This borrowed capital typically comes in the form of loans or bonds and is often used in leveraged buyouts (LBOs), where the target company's assets and cash flows are used as collateral for the debt.

Due Diligence

Due diligence is a comprehensive appraisal of a business undertaken by a prospective buyer to evaluate its assets, liabilities, and overall financial health. This process aims to confirm all material facts and assess the potential risks and benefits associated with a transaction.

Recapitalization

Recapitalization is a corporate restructuring strategy aimed at changing a company's capital structure. This involves altering the mix of debt and equity to stabilize the company’s balance sheet, improve financial health, or achieve specific strategic goals.

Cap Table

A Cap Table, or Capitalization Table, is a detailed spreadsheet or document that outlines the equity ownership, types of shares, and ownership percentages of a company. It includes information on founders, investors, and employees, as well as the dilution of shares over time through various funding rounds and option grants.

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Where Alehar can help

Corporate Finance as a ServiceWe run your corporate finance function month to month: reporting, forecasting, and readiness for what's next.Read more

How do I get my business financials in order?

Questions to work through

Tools for stronger financial decisions

Tech Stack Tools Directory

Debt Capacity Calculator

Valuation Calculator

Articles

Month-End Close Checklist: Steps, Controls and Timeline

Monthly Accounting vs Annual Accounting: 10 Reasons to Close Every Month

Adjusted EBITDA: Formula, Add-Backs and Valuation Risks

Cash vs Accrual Accounting: What Businesses Should Know

How to Improve Cash Flow: Practical Levers for Growing Companies

Traditional vs Modern Finance Departments: What Changes

Checklists

Data Room for Series B Fundraise

Month-End Closing Process

Financials glossary

Adjusted EBITDA

Covenant

Leverage

Due Diligence

Recapitalization

Cap Table

Where Alehar can help

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