In this episode of The Trusted Advisor, Rob Pyne sits down with seasoned finance leader Dan Heckendorf, who brings a wealth of experience from his time as CFO of AZ NGA, one of Australia’s most active acquirers in the financial advice sector. Now the founder of Astilla Advisory, Dan shares what it really means to build a true CFO function; one that drives strategy, not just compliance.
Together, Rob and Dan unpack the lessons learned from scaling AZ NGA through rapid growth, managing private equity expectations, and redefining how finance can serve as a strategic value driver rather than a back-office cost center. Whether you’re running a growing advice firm or leading a scale-up with big ambitions, this episode offers a roadmap for building strong financial foundations early before you hit the pain points of scale.
LISTEN
SHOW NOTES
Topics Discussed
- Preparing for scale early: Why early investment in systems, people, and processes pays off before growth hits.
- The myth of 50% EBITDA margins: Why high short-term profitability may not be sustainable long-term.
- Lessons from AZ NGA’s federated model: The challenges of balancing entrepreneurial freedom with the need for consistency and standardisation.
- The arrival of private equity: How Oaktree’s investment reshaped financial governance and the push for deeper performance insights.
- Finance as a strategic partner: Why the finance function should be a powerhouse of value, not just a reporting mechanism.
- Virtual CFO vs. True CFO: The critical differences between transactional finance services and strategic financial leadership.
- Warning signs your business has outgrown its finance setup: From delayed reporting to burnout and siloed teams.
- Designing a right-sized finance function: What an ideal structure looks like for firms in the $10M–$50M revenue range.
- The birth of Astilla Advisory: How Dan is helping growth-focused businesses build strategic finance capabilities that scale.
Episode Highlights
(Timestamps are approximate)
- [00:02] – Rob welcomes Dan; outlines AZ NGA CFO tenure and Astilla launch.
- [01:11] – Biggest AZ NGA lesson: prepare for scale early; 50% EBITDA often unsustainable long-term.
- [02:17] – Reinvest early profits in tech/process; $5M systems fail at $10M.
- [03:28] – Oversaw 36 firms / 100 entities / 100 Xero instances; credits supportive CEOs.
- [04:57] – Finance as strategic powerhouse if resourced; AZ NGA’s 8-person team handled $140M→$300M with zero automation.
- [06:47] – Oaktree PE entry: culture shock, driver-level scrutiny, storytelling via finance.
- [08:20] – Federated model preserves entrepreneurship but collapses at scale; Oaktree accelerated uniformity.
- [11:27] – True CFO: CEO’s revenue/cost/risk/exit advisor; virtual CFO: historical/transactional.
- [14:28] – Red flags: delayed reports, siloed team, burnout/turnover.
- [15:56] – $10–15M revenue: hire 15+ year financial controller as CFO stepping stone; $50M: full CFO.
- [17:45] – Astilla inspired by high-growth experience; tailors playbooks, mentors CFOs, eyes VC.
- [19:12] – Onboarding: deep listening, risk prioritization (cashflow > policies).
- [21:01] – CFO co-pilot eases CEO loneliness with objective counsel.
- [25:02] – Biggest scaling gain: 5-year quantified strategy (revenue/EBITDA, pricing, AI).
- [26:24] – Blind spot: no monthly P&L driver transparency.
- [27:32] – Three disciplines: 1. Revenue before staff; 2. Process/tech/offshoring; 3. Budget adherence.
- [29:50] – Advisor model: $500K revenue target + MI dashboards; ~120 clients industry avg.
- [34:05] – Capacity = clients + revenue/client; cull low-value books.
- [36:23] – 50% EBITDA elite; expand via 5-year initiatives (pricing, offshoring, segments).
- [39:12] – 40-20-40 useful starter benchmark; flex for stage/seasonality/M&A.
- [41:35] – 90% of AZ NGA owners embraced discipline post-trust.
- [43:01] – Final advice: invest in strategic finance early; linear growth-CFO value link.
Quotes
“People power alone is really the path to maintaining strong EBITDA margins to scale as you reach those steep growth curves.” – Dan Heckendorf
“Finance can be a powerhouse value driver to an organization.” – Dan Heckendorf
“A strategic CFO takes the time to understand the business intricately… they are the CEO’s most important advisor.” – Dan Heckendorf
“Being a founder, a CEO, a business leader can be a lonely place at times… a strong CFO should be that CEO’s trusted advisor.” – Dan Heckendorf
“Don’t let it linger. Act as soon as you feel the need… a strong CFO is not only gonna help you grow your business, but I hope you protect it too.” – Dan Heckendorf
“Don’t wait until you’ve scaled to fix your finance structure. Build for where you’re going, not where you are.” – Rob Pyne
Resources & Links
- HPH Solutions: https://hphsolutions.com.au/
- Astilla Advisory: https://www.astilla.com.au/
- Connect with Rob Pyne on LinkedIn
- Connect with Dan Heckendorf on LinkedIn
- Follow The Trusted Adviser Podcast
Key Takeaways
- Reinvest early high margins into tech and process. 50% EBITDA signals peak utilization, not scalability.
- Federated autonomy works small; scale demands uniform systems (pricing, tech, offshoring).
- Strategic CFO partners on vision, risk, exit. Virtual CFO delivers compliance only.
- $10–15M revenue needs a 15+ year financial controller building toward full CFO by $50M.
- Prioritize risks on entry (cashflow visibility trumps policy gaps).
- Five-year plan must quantify drivers: clients/advisor, revenue/client, AI leverage.
- Hire staff only after advisors hit capacity with high-value clients; use revenue targets and dashboards.
- Margin expansion requires deliberate initiatives, not just volume.
- 40-20-40 is a flexible starting benchmark; own your destiny with custom pathways.
- Invest in strategic finance early. Small formative outlays prevent massive remediation later.
Show notes and transcript
For the full show notes and transcript from this episode, head to the episode page on The Trusted Adviser Website here.