Articles from Fortivis on running a company by its numbers: monthly reporting, financial models, SME financing, valuations and what buyers look for.
A buyer's diligence takes value off the price in two ways. Some is lost because the seller cannot prove it. Some was never there, and the seller learns that from the buyer's report. A file kept month by month from the day of investment recovers the first kind. It cannot recover the second, but it shows it years earlier, while the fund can still act.
Put three consecutive monthly packs side by side. In each one the latest month looks better than it does a month later. Nobody has lied. The pack is built before the costs have arrived, and nobody goes back. The trust gap is the distance between a number that looks right and one that can be shown to be right. It closes with a monthly close, and a new and cleverer author for the pack does nothing for it.
While a company is unsold, its valuation is the only evidence of performance a fund can show. A valuation is earnings times a multiple, less net debt. Change earnings and debt by a tenth or less each and almost a fifth of the equity value goes, because debt magnifies the fall. Two of the three inputs come from the company's own records. This article is about those two.
I spent years on the lender's side of the conversation that follows a covenant breach. The breach was seldom one bad number. It was two small movements that nobody had put on the same page: customers paying a few days later, profit slipping a little. This is what that looks like from the bank's chair, and what a fund can see months earlier if it looks.
The portfolio company's EBITDA is up fifty percent since entry. Then someone splits the growth into what was bought, what was earned and what was redefined, and the part the business earned by itself is a third of the total. The proof of value creation is that split, made by the fund before a buyer makes it.
The board approves a single-scenario projection. Six months later, the assumptions have shifted, the revenue ramp took longer than modelled, and nobody stress-tested the assumption that mattered most. The decision simulator is the discipline that closes the gap between conviction and evidence.
A PE fund rarely owns five versions of the same company. The problem is not insufficient comparability — it is monitoring through disconnected operating routines. The fund operating system is the management layer that standardises cadence, definitions, variance logic, and action ownership without flattening company-specific economics.
Most PE-backed portfolio companies produce a budget once a year and call it a forecast. By March it is historical. By June it is fiction. A rolling forecast is the alternative — a forward-looking projection that updates itself as new actuals arrive.
Ninety days is the median lag between the moment a portfolio company's gross margin begins to erode and the moment it surfaces in a quarterly management pack. The early warning wire is the architecture that detects deviation as it forms and routes it to the person who can act.
The board pack arrives on day twenty-two. Forty slides. Eighty percent of the meeting reviews what happened; the rest rushes through what to do about it. The governed month replaces ad hoc assembly with a production process — defined phases, defined ownership, and tracked actions.
You cannot zoom in on a blurry photograph and reveal detail that was never captured. The same applies to financial data—when transactions aren't tagged with the dimensions investors care about, the resolution needed to answer their questions simply doesn't exist.
Portfolio companies chase AI transformation yet nearly half of initiatives never reach production. The gap between strategy and execution is not a technology problem—it is a readiness problem, and a leading indicator of operational maturity.
Greek SMEs face a staggering contradiction: €40B in funding exists, yet access remains the biggest challenge. The problem is not money scarcity but translation between operational reality and institutional language.
Transform your finance function from cost center to strategic asset. Modern businesses need financial infrastructure that drives decisions, not just reports compliance.
Successful entrepreneurs build profitable businesses yet cannot access liquidity when needed. Operational success has not translated into institutional readiness.