Company Background
Company: Kentucky Commercial Builders (fictional)
Industry: Commercial construction – general contractor
Revenue: $80 million
Employees: 60
Geography: Multi-state operations in the South
Project Types: Healthcare, education, light industrial
Financial Profile:
- Gross margin: 14%
- Pretax profit: 4.5%
- Bonding line: $60 million
- Working capital needs: highly seasonal
- Accounting team: 6 people
Starting Point: The Controller’s Role
For six years, Monte served as Controller. He was excellent at:
- Producing timely financial statements
- Managing job cost accounting
- Overseeing payroll and AP
- Closing the books
- Coordinating annual audits
- Maintaining compliance with bonding and banking requirements
He was viewed as reliable, technically strong, and highly trustworthy.
However, the CEO consistently felt that:
- Financial reports were backward-looking
- Decisions were being made without strong financial input
- Cash surprises occurred
- The accounting department was a scorekeeper, not a business partner
The Board told the CEO: “You don’t need a better Controller. You need a true CFO.”
Rather than hire externally, the CEO asked Monte if he wanted to evolve into that role.
The Gap: Controller vs. Strategic CFO
The company identified several gaps between Monte’s current responsibilities and what the business needed.
| Traditional Controller Focus | Strategic CFO Focus |
|---|---|
| Historical reporting | Forward-looking strate |
| Accuracy and compliance | Profitability and growth |
| Departmental oversight | Enterprise leadership |
| Transaction processing | Decision support |
| Audits and taxes | Capital strategy |
| Monthly close | Real-time insights |
Phase 1 – Mindset Shift
Step 1: Stop Thinking Like an Accountant
His first change was philosophical:
- Move from “How do I record this?”
- To “How do we make better decisions?”
He began attending:
- Weekly executive meetings
- Preconstruction reviews
- Operations meetings
- Project risk reviews
He stopped acting like “head of accounting” and started acting like “business executive responsible for financial outcomes.”
Phase 2 – Mastering Construction Operations
Monte recognized a hard truth: A CFO in construction who doesn’t understand operations is just a bookkeeper with a nicer title.
He committed to learning the business:
- Sat with project managers to review job cost reports
- Learned estimating models
- Studies bonding requirements
- Shadowed the VP of Operations/Division Heads
- Participated in bid reviews
He developed working knowledge of:
- Change order processes
- Work in process (WIP) calculations
- Over/under billings
- Labor productivity metrics
- Subcontractor risk
- Equipment utilization
Phase 3 – Upgrading Financial Leadership
Monte then re-engineered the finance function from a compliance department into a strategic platform.
Key Initiatives
1.Better Reporting – From Data to Insight
Old approach:
- Monthly P&L 20 days after month end
- Dense, accountant-style reports
New approach:
- Flash reports within 5 days
- Project dashboards
- KPI scorecards
- Cash flow forecasts
- Earned vs. burned labor metrics
He introduced:
- Weekly cash forecasting
- Backlog profitability analysis
- Project margin trend reports
- Real-time WIP tracking
2.Cash Flow as a Core Discipline
Previously: Cash was “hoped for”
Now he implemented: 13-week rolling cash forecasts, Billing cycle improvements, Payment terms strategy, Subcontractor pay-when-paid enforcement, Change order acceleration, Receivable aging accountability
Result:
- Reduced average days sales outstanding from 65 to 41
- Increased available bonding capacity
- Lowered line-of-credit usage
3.Becoming the CEO’s Thought Partner
Monte shifted from reporting numbers to guiding decisions:
Examples:
- Modeled profitability by project type
- Analyzed which clients were truly profitable
- Help evaluate new markets
- Built make/buy equipment analyses
- Modeled labor vs. subcontractor strategies
- Assessed risk exposure in large bids
He learned to present like an executive, not an accountant:
- Clear visuals
- Business language
- Recommendations, not just data
Phase 4 – Expanding Beyond Accounting
To be a true CFO, Monte took on broader responsibilities:
Strategic Areas He Now Led
- Banking relationships
- Surety and bonding strategy
- Insurance and risk management
- IT systems roadmap
- HR metrics and labor strategy
- Contract review
- M&A evaluation
- Succession planning
- Corporate budgeting and forecasting
He built cross-functional credibility by helping:
- Operations win smarter projects
- Estimating improve bid accuracy
- HR control overtime
- Project managers understand financial impact
Phase 5 – Developing Executive Presence
The biggest transformation was personal:
He learned to:
- Speak up in executive meetings
- Challenge bad assumptions
- Translate finance into plain English
- Influence without authority
- Deliver hard messages confidently
- Think like an owner
The CEO began to rely on his not just for numbers, but for judgment.
Measurable Results After 18 Months
| Metric | Before | After |
|---|---|---|
| Days to close books | 20 | 8 |
| Gross margin | 14% | 15.8% |
| Pretax margin | 4.5% | 6.2% |
| DSO | 65 days | 41 days |
| Cash forecasting accuracy | Ad hoc | ±5% |
| Write-offs | Frequent | Rare |
| Bonding capacity | $60M | $100M |
The CEO summarized it this way: “We used to have a Controller who kept score. Now we have a CFO who helps us win.”
What Specifically Changed in His Role
As Controller, Monte asked
- Are the numbers correct?
- Did we follow GAAP?
- Is the audit clean?
As CFO, Monte now asks
- Which projects should we pursue?
- Are we taking too much risk?
- How do we improve margins?
- Can we afford this growth?
- What does this decision do to cash?
- How do we protect the balance sheet?
Key Lessons for Controllers Aspiring to CFO
- Learn the business, not just the debits and credits.
- Become forward-looking instead of historical.
- Master cash flow, not just income statements.
- Build relationships with operations leaders.
- Communicate in business language.
- Provide recommendations, not reports.
- Understand risk in construction deeply.
- Develop executive presence and courage.
- Think like an owner.
- Earn the CEO’s trust as a true partner.
Final Outcome
Monte did not simply get promoted.
He transformed
- From accountant → executive
- From historian → strategist
- From reporter → advisor
- From Controller → true CFO
And the business performance improved as a direct result.
Closing Thought
In a middle-market construction company, the CFO is not the “top accountant.”
The CFO is:
- A business leader
- A risk manager
- A capital strategist
- And most importantly—
- The CEO’s most trusted financial partner.