TSA Renegotiation
See the business clearly from the first month.
Fixed-fee proposal in 48 hours. Senior team on day one. The first conversation is always free.
TSA FP&A separation stands up the carved-out entity's own budgeting, forecasting, and management reporting before Day One. Inside the group, planning ran on the seller's consolidation system and central models; on its own, the entity needs its own forecast built on its own standalone numbers. This is core finance capability, which places it inside TSA financial operations. Without it the new owner cannot see whether the business is on plan.
The general ledger is mechanical to separate compared with FP&A. The ledger records transactions that already happened, so cutting it over is largely a matter of structure and data. Financial planning and analysis is different in kind: it interprets those actuals, projects them forward, and frames the business for the people running it. It lives on allocations, cost drivers, a reporting hierarchy, and a set of assumptions, all of which were designed for the seller's group rather than for the entity standing on its own.
That is why FP&A cannot simply be copied. The budget the entity carried inside the group included corporate allocations, shared service charges, and a cost base shaped by being part of something larger. On a standalone basis many of those numbers change. Some shared costs disappear, others have to be replaced by the entity's own standalone functions, and stranded costs left behind by the carve-out have to be understood and planned for. The new plan is a rebuild, not a transfer.
So the buyer treats FP&A separation as judgement work that needs to start early and involve people who understand the business. It is the function that tells the new owner whether the entity is performing, where the cost really sits, and what the next quarter looks like. Getting it stood up properly is what turns a set of opening accounts into a business the owner can actually steer.
The first task is an honest standalone cost base. The buyer strips the entity's historical numbers of the parent allocations and shared charges that will not follow it, then adds back the real cost of the functions it now has to run itself: its own finance team, its own systems, its own overhead. The difference between what the entity was charged inside the group and what those functions actually cost on the outside is one of the most important numbers in the whole separation, because it drives the standalone margin.
Stranded costs sit right next to this. Some costs the seller used to spread across the group do not disappear when the entity leaves; they land somewhere, and the buyer has to know whether they land on the carve-out or are left behind. A plan that quietly assumes the entity sheds every shared cost cleanly is optimistic, and the FP&A view is where that optimism gets tested against reality. Naming the stranded costs explicitly keeps them from surfacing as a surprise in the first quarter's results.
The reporting hierarchy gets rebuilt at the same time. The cost centres, the business lines, and the way results roll up all have to reflect how the standalone entity is actually managed, not how it sat inside the seller's structure. This management view is anchored on the chart of accounts the general ledger cutover delivers, so the planning hierarchy and the ledger structure are designed together rather than reconciled afterward.
FP&A runs on tools and data, and both have to be the entity's own. Inside the group the planning models, the consolidation system, and the reporting platform belonged to the seller, and the entity loses access to them at separation or during a limited TSA window. The buyer decides early what the standalone entity will plan and report on, whether a dedicated planning tool or a disciplined set of models, and stands it up with the entity's own actuals feeding it rather than leaving the choice until access runs out.
The data feed matters as much as the tool. The forecast is only as good as the actuals behind it, so the FP&A models have to draw cleanly from the standalone ledger, the payroll, and the operational systems the entity now runs. Where a TSA still provides some of those systems for a period, the buyer makes sure the data can be extracted in a usable form and is not trapped inside a seller report that ends when the service does. A planning model fed by a feed that is about to be switched off is a short term illusion.
The deliverable is a credible first forecast. Before Day One the buyer wants a standalone budget and forecast the new owner can stand behind, built on the real cost base, with the parent allocations gone and the standalone functions costed in. This is the number the value creation plan is measured against, so getting it honest at the start sets the baseline for every later conversation about whether the entity is ahead or behind.
A standalone entity needs management reporting it can produce itself from the first month. Inside the group, the monthly pack often came out of the seller's central reporting, and the entity received its numbers rather than generating them. On its own it has to build the pack: the profit and loss against budget, the cash position, the key operational metrics, and the variance commentary that tells the owner what moved and why. The first close is far smoother when that pack already exists in draft and has been dry run on prior period numbers.
The pack has to map to how the new owner thinks. A private equity owner and a corporate parent want different cuts, different cadences, and different levels of detail, and the FP&A function is built to serve the actual owner rather than to reproduce the seller's old format. Designing the reporting around the owner's value creation plan from the start means the first board pack speaks the owner's language instead of the seller's, which matters when the early months set the tone for the whole hold.
Reliability is the test. A reporting pack that looks right but takes a heroic manual effort each month, or that cannot be produced at all when a TSA system is withdrawn, is not really stood up. The buyer proves the close and reporting cycle can run on the standalone tools and data before Day One, so the first real month is a rehearsal of a working process. This is the kind of standalone capability the TSA Renegotiation service protects when it reshapes which finance services the entity keeps and for how long.
FP&A is more dependent on people than most separation workstreams. The models and tools are only as useful as the analysts who run them, understand the drivers, and can explain a variance to the owner. In a carve-out the planning know how often sat in the seller's central team, so the buyer has to confirm the standalone entity has the FP&A capability it needs, whether transferred with the business, hired into it, or supported for a defined period until the permanent team is in place.
A short TSA for planning support can bridge the gap, but the buyer treats it as a bridge with a firm end date, not a resting place. Relying on the seller to run the entity's forecast for an open period leaves the new owner dependent on the very party it separated from for its core management information, and the seller's incentive to keep that service sharp fades quickly. The standalone team is built in parallel so the bridge can be exited on schedule.
FP&A separation rewards the buyer that treats it as the function that makes the business legible. Rebuilding the cost base honestly, standing up the tools and data, producing a reporting pack the owner uses, and putting the right people behind it lets the new owner see the entity clearly from the first month. Treating planning as something to sort out after the close is how an owner reaches the end of the first quarter unable to say whether the business is winning or losing.
It is standing up the carved-out entity's own financial planning and analysis: its own budget, forecast, management reporting, and the data and tools behind them. Inside the group these ran on the seller's consolidation system and central models. On its own the entity needs its own planning capability built on its own numbers.
The ledger records what happened; FP&A interprets it and projects forward, and it depends on allocations, drivers, and a reporting hierarchy that were all defined for the parent group. Pulling the entity out means rebuilding the cost structure and the management view on a standalone basis, which is judgement work, not just a system copy.
Flying into the first month without a credible standalone forecast. If the budget still carries parent allocations and the reporting cannot be produced, the new owner cannot see whether the business is on track. The entity needs a forecast built on its real standalone cost base and a reporting pack it can generate from week one.
Yes. FP&A draws its actuals from the ledger, so the chart of accounts and the cost centre structure the ledger cutover delivers are the foundation the planning models sit on. The two are designed together so the management reporting maps cleanly to the standalone ledger from the first close.
The chart of accounts and structure FP&A reporting maps to.
Read the article →Standing up the collections that feed the standalone cash forecast.
Read the article →Standalone liquidity the forecast has to plan around.
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