Reverse TSA Advisory
When the buyer is the provider. Pricing, scope, and exit need a specialist.
Fixed-fee proposal in 48 hours. Senior team on day one. The first conversation is always free.
A reverse TSA changes who delivers the work. When the buyer becomes provider, the buyer's operations team has to stand up a service desk, billing function, and governance interface aimed at the seller. The work is operational, not legal, once the contract is signed. The buyer side discipline that drives reverse TSA advisory work is about translating contractual obligations into delivery capacity that does not drain Newco's own runway.
When a buyer signs a reverse TSA, the contract gets the most attention during diligence and signing. After close, the contract recedes and the operational reality takes over. The buyer's operations team is now responsible for delivering a recurring service to an external counterparty whose interests and priorities are no longer aligned with the buyer's. The team that ran the function as an internal capability now has to run it as a vendor relationship.
The transition is unfamiliar for most operators. Internal service delivery assumes shared incentives, shared budgets, and shared management. External service delivery to a seller under a reverse TSA strips those out. The seller has every incentive to push scope, contest invoices, and delay its own exit. The buyer has every incentive to contain scope, get paid on time, and end the relationship on the contract date.
The operational answer is to treat the reverse TSA the way a vendor would treat a customer contract. That means dedicated intake, dedicated billing, dedicated governance, and a clear escalation path. Without those four elements, the reverse TSA quietly bleeds Newco margin and management attention for the full duration. The work pairs with the reverse TSA primer.
The buyer side advisor maps the contractual scope to the buyer's actual operational footprint inside the first 30 days after close. The map shows where the buyer has capacity to deliver, where the buyer needs to fill gaps with new hires or temporary contractors, and where the buyer should push back on the seller for unrealistic demand assumptions before the operational rhythm sets in.
The intake function is the single channel through which the seller submits requests under the reverse TSA. Without a single channel, the seller will call individual buyer employees, send emails to former colleagues, and route requests through informal relationships that bypass the contract. Each informal request consumes buyer capacity without billing, without tracking, and without governance.
A workable intake setup includes a dedicated email alias, a ticketing tool, a named buyer side coordinator, and a documented process for routing requests to the responsible buyer team. The coordinator role is critical. The coordinator screens requests against the service catalog, confirms scope, captures the data needed for billing, and escalates anything that falls outside the catalog. Most reverse TSAs do not budget for the coordinator role explicitly. The buyer side advisor recommends adding it as a billable function in the catalog or absorbing the cost into the mark up on cost plus pricing.
The intake process needs to handle three request types. Standard catalog requests get routed and fulfilled. Out of catalog requests get routed to the change request mechanism with a quote attached. Disputed requests get routed to the governance committee. The buyer side advisor builds the intake playbook so every request lands in one of those three buckets within 24 to 48 hours of receipt.
The intake function reports volume, cycle time, and disputed request count monthly. The reporting matters because the data drives renegotiation if volumes diverge materially from the assumptions baked into the original pricing. The buyer side advisor builds the reporting cadence with the buyer's finance function so the intake data feeds straight into the monthly invoice and the quarterly governance review.
The buyer's finance function now has a customer it did not have before. The seller pays the buyer under the reverse TSA on a monthly cycle that runs in parallel with the buyer's payment obligations on the standard TSA. The two cycles are independent. The buyer should not net them and should not allow the seller to delay payment by claiming offsets against unrelated obligations.
A workable billing setup includes a customer record for the seller in Newco's billing system, a defined invoice cycle (typically monthly in arrears), a documented set of supporting evidence for each charge, and a collections process for late payment. The buyer side advisor coordinates with Newco's controller to set up the customer record, define the invoice template, and establish the documentation standard before the first invoice ships.
Cost plus pricing creates a documentation burden. Every charge needs evidence of underlying cost plus the agreed mark up. Direct labor needs hours, rate, and worker identification. Direct materials need invoices or system records. Third party costs need pass through documentation. Without disciplined documentation, the seller can challenge any charge during quarterly true ups or audit windows and force the buyer to absorb the cost.
Late payment treatment matters. The reverse TSA should specify interest on unpaid balances, suspension rights for material non payment, and a path to termination if the seller chronically delays payment. The buyer side advisor enforces those rights when they apply. Sellers sometimes treat reverse TSA invoices as low priority because the buyer is no longer an internal department. Enforcement of the payment terms early in the relationship signals that the reverse TSA is a real commercial contract with real consequences. The work pairs with reverse TSA pricing models.
The governance interface is the forum where the buyer and seller meet to manage the reverse TSA. The forum is not the same as the standard TSA governance forum, although the same people may attend both. The reverse TSA agenda covers service performance, volume actuals against forecast, invoice status, open change requests, exit readiness, and any disputes in flight.
Monthly cadence is the standard. The first meeting in each month reviews the prior month's performance and the second invoice cycle. A separate quarterly review covers larger structural questions, including extension scenarios, scope changes, and exit milestone progress. The buyer side advisor builds the agenda, runs the meeting, and produces the minutes. The minutes become the contemporaneous record that supports billing, scope, and exit positions if disputes escalate.
Membership of the governance forum matters. The buyer side committee should include an operational lead for each service track, the finance lead responsible for invoicing, a legal representative on retainer for contract questions, and the buyer side advisor. The seller's representation should mirror that structure. A governance forum that is too senior loses operational detail. A forum that is too junior loses decision authority. The buyer side advisor calibrates membership to match the operational complexity of the reverse TSA.
Escalation rules need to be explicit. Most operational disputes can be resolved at the monthly governance forum. Disputes that cannot be resolved at the forum escalate to a defined executive sponsor on each side within a defined timeline (typically 10 business days). Disputes that remain unresolved at executive level escalate to the formal dispute resolution mechanism in the contract. The buyer side advisor enforces the escalation timeline to prevent disputes from lingering and quietly eroding margin.
The hardest cost to measure in a reverse TSA is the attention drain on Newco's operations team. The team is trying to stand up an independent business, exit the standard TSA, hit value creation targets, and now also deliver service to the seller. The reverse TSA pulls senior operational attention into seller management at a moment when that attention is the scarcest resource Newco has.
The buyer side advisor recommends three protective practices. First, ring fence reverse TSA delivery to a named team with defined capacity. Second, set ceiling rules for senior involvement so the COO and CFO are not drawn into operational requests that the named team should handle. Third, build a clear handover ritual at the end of the reverse TSA so the team that delivered the service can redeploy to Newco's own work without lingering seller obligations.
Where ring fencing is not possible because the service depends on Newco's core operations, the buyer side advisor models the capacity cost into the cost plus pricing. The mark up needs to reflect the opportunity cost of senior operational attention, not just the direct cost of the work. A 10 percent mark up on direct labor is not enough when the labor is the COO's calendar. Cost plus mark up benchmarks rise sharply when the resource is strategic rather than operational.
A simple capacity protection checklist looks like this:
The work pairs with the reverse TSA governance framework. Operational discipline and contractual governance are paired instruments. Neither works without the other.
The role change from internal department to external provider is rarely a clean reorganization. The same people who used to deliver the service inside the seller now deliver it under a contract that did not exist three months earlier. They need new tooling, new processes, new reporting, and a new commercial mindset. The buyer side advisor brings the playbook so the team does not have to invent it from scratch under deal closing pressure.
The work begins pre signing with reverse TSA scope review, pricing benchmarking, and SLA calibration. The work continues on Day One with the stand up of intake, billing, and governance. The work finishes on the exit date with handover, redeployment, and reconciliation of any open billing items. Each phase has its own deliverables and its own cadence.
Reverse TSA work is delivered under a Fixed Fee or Portfolio Retainer engagement model. The Fixed Fee covers a defined scope and a defined timeline. The Portfolio Retainer covers a PE platform running multiple reverse TSAs across portfolio companies and gives the operating partner a single specialist team across all of them. The buyer side advisor scopes the engagement during initial diligence and delivers a fixed fee proposal within 48 hours of intake.
The reverse TSA is a contract the buyer signed because the deal required it, not because the buyer wanted the role. The job of the buyer side advisor is to contain the obligation, recover the cost, and exit on schedule. The work pairs with the reverse TSA exit strategy framework and connects to the broader reverse TSA glossary entry for definitional reference.
The TSA negotiation pillar covers the clause and pricing mechanics behind every reverse TSA. Corporate buyers face the same dynamics from the provider side.
The structural primer. Six inversions, pricing models, scope, SLAs, exit, and extension.
Read the article →Cost plus, fixed fee, pass through, and how buyers structure pricing to recover full cost.
Read the article →The committee structure, cadence, and escalation rules that keep reverse TSAs from drifting.
Read the article →The 90-day governance, IT, finance, HR and procurement separation plan we run on live carve-outs. Get the playbook plus the bi-weekly Day One Letter — short, signal-heavy, buyer-side.
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