Audit-Ready Finance

At $5M-$50M in revenue, your company likely faces external scrutiny for the first time. SEC regulations require public companies and certain private fund managers to file audited financial statements, but even private companies increasingly encounter audit requirements from lenders and investors who need GAAP-compliant financial statements.

• PE lenders require audited financials and quarterly covenant reporting
• Enterprise customers demand SOC 2 compliance before signing contracts
• Investors conduct thorough financial due diligence
• Banks review financials for loan renewals and credit line increases

An outsourced controller or fractional CFO ensures your finance function is prepared for this level of scrutiny. Being unprepared means lost deals, higher borrowing costs, and delayed growth.

1. Monthly Close Process

• Close books within 10 business days of month-end
• Reconcile all accounts monthly
• Document all adjusting entries
• Review financial statements for unusual items

A consistent month-end close process is the foundation of audit readiness.

2. Documentation

• Maintain supporting documentation for all material transactions
• File all bank statements and reconciliations
• Keep signed contracts and vendor agreements
• Document revenue recognition policies

3. Internal Controls

• Segregation of duties (different people approve and pay)
• Written approval thresholds for expenses
• Regular password and access reviews
• Physical security for assets and documents

Strong internal controls are a hallmark of a mature controller function.

4. Tax Compliance

• File all federal, state, and local tax returns on time
• Maintain payroll tax compliance
• Document uncertain tax positions

Quality accounting services ensure tax filings stay consistent and well-documented.

SOC 2 compliance is increasingly required for B2B companies. The financial controls component requires:

• Access Controls: Who can access financial systems and data
• Change Management: How software and process changes are approved
• Financial Reporting: Accurate and timely financial statements
• Vendor Management: Due diligence on critical vendors
• Risk Assessment: Documented IT and financial risks

The AICPA defines the Trust Services Criteria that form the basis of SOC 2 examinations. Most $5M-$50M companies can achieve SOC 2 compliance in 3-6 months with proper preparation. For broader compliance needs, see our private equity readiness guide.

Private equity firms typically require:

• Annual audited financials (or reviewed, depending on size)
• Quarterly unaudited financials with covenant calculations
• Monthly borrowing base certificates
• Cash flow forecasts
• Asset perfection (UCC filings for collateral)

The SEC provides guidance on financial disclosure requirements for private companies raising capital. A dedicated accounting team ensures all documentation is ready well before lender deadlines.