Every fund operations team relies on workarounds from time to time, often for good reason. A reporting request may fall outside the standard process, a new vehicle may introduce an unexpected requirement or an existing system may not be able to accommodate what is needed. In those situations, the team finds a practical solution that keeps the work moving.
What is easier to overlook is what happens after the immediate problem has been solved. A temporary spreadsheet can gradually become part of the quarterly close. An additional reconciliation may continue long after the issue that prompted it has changed. Information may routinely move between the fund administrator and internal finance team through a manual process that was never intended to become permanent.
For private equity and venture capital CFOs, these workarounds can tell an important story about how the operating model is functioning. When the same manual intervention is required quarter after quarter, the question is not simply how to make that task more efficient. It is why the extra work is necessary in the first place.
When Workarounds Become the Process
A workaround can be difficult to spot once it becomes familiar. If the team has always maintained a separate spreadsheet for a particular calculation or reconciled an administrator’s output before using it internally, that step may simply be viewed as part of the process. The operational cost goes beyond the time spent completing the task. Someone has to maintain the spreadsheet, understand the reconciliation or remember why a particular investor receives different treatment. Over time, those responsibilities can become dependent on individual knowledge, with controllers and CFOs remaining involved because they understand the history behind the process.
Growth tends to expose that dependence. A customized approach that worked well for Fund I can become harder to manage across Fund IV, several SPVs and a larger investor base. More activity passes through the same workflows, more people become involved and there is less room to rely on what a handful of employees know. At that point, adding another person or system may help with volume, but it does not necessarily address what is creating the additional work.
Follow the Workaround Back to Its Source
Before automating or eliminating a manual process, it helps to understand why it exists. In fund operations, the point where the team feels the friction is not always where the problem begins.
Consider a finance team that reconciles the fund administrator’s numbers against an internal spreadsheet every quarter before reviewing the financial statements. Making that reconciliation faster would save time, but it leaves a more important question unanswered. Why does the team feel it needs a second calculation? There may be a legitimate control reason, but the process could also point to differences in data, methodology or expectations between the manager and administrator.
The same thinking applies to other recurring work. If investor reports need to be reformatted before distribution, determine what is missing from the standard output. If capital activity involves repeated manual handoffs, look at how information moves between the manager, administrator and underlying systems. If the CFO regularly steps into a calculation or review, consider whether their judgment is actually required or whether the process has simply come to depend on their knowledge. Removing the visible task without addressing its source often means the workaround reappears somewhere else.
Look at Who Owns the Work
Some workarounds also reveal that responsibilities have become blurred over time. As firms grow, the division of work between the internal finance team and fund administrator does not always evolve at the same pace. An internal team may gradually take on reconciliations, reporting adjustments or data maintenance because doing so was faster than changing the existing process. The administrator may be completing its agreed responsibilities correctly, yet the manager is still performing substantial work before or after that output can be used.
That is worth examining. The question is not simply whether a task is being completed, but whether it is being completed in the right place. A CFO’s team should not automatically absorb recurring operational work simply because it has historically done so. Likewise, moving a task to an administrator will not solve the problem if the workflow between the two organizations remains unclear. A useful operating model makes ownership visible. The manager and administrator should understand where information originates, who is responsible for each stage of the process and what constitutes a completed output.
Standardize the Core and Isolate the Exceptions
Removing workarounds does not mean eliminating customization. Private funds are complex, and different structures, strategies and investor requirements will always create legitimate exceptions. For example, if the majority of investor reporting follows one established workflow, a small number of investor-specific requirements can be handled as documented exceptions. The same principle can apply to capital activity, management fee calculations and other recurring fund administration processes. The core workflow remains consistent, while genuine exceptions are visible and easier to manage.
Not every manual process needs to disappear. A quarterly task that takes 15 minutes and genuinely applies to one investor may be perfectly reasonable. A similar task repeated across multiple funds, requiring several people and an additional review, deserves a different level of attention.
Fix Problems Earlier in the Workflow
Another area to examine is review. When teams are not confident in an output, adding another checkpoint can feel like the safest solution. But if the same issue is being caught repeatedly during review, the review itself is not solving the problem. A recurring adjustment during the quarterly close, for example, may originate with source data, an earlier calculation or the handoff between the manager and administrator. Addressing it at that point can remove work from every step that follows.
This is particularly important when senior finance professionals become permanent checkpoints. CFO and controller involvement is valuable when a decision requires experience and judgment. It is less valuable when they are repeatedly correcting the same operational issue or confirming something that a well-designed process should already address.
Give Workarounds an Expiration Date
Perhaps the simplest discipline is to stop treating a workaround as permanent by default. When a new one is introduced, document why it was necessary and decide when it will be revisited. That could be after the next quarterly close, once a new fund has completed its first reporting cycle or after a system implementation has settled.
The review does not need to be complicated. The team can look at which manual processes have appeared since the last review, which require the most intervention and where work routinely moves back and forth between the manager and administrator. Some workarounds will remain because they are still the most practical solution. Others may reveal an opportunity to simplify a workflow, clarify responsibilities, change how technology is being used or have a different conversation with the fund administrator.
That is ultimately the value of paying attention to one-off workarounds. They are not just extra tasks to eliminate. They can show CFOs where the operating model has stopped keeping pace with the firm and where relatively small changes could make fund operations easier to manage as the organization continues to grow.