At a glance
- The company: A specialty distribution company (~400 employees, 6 branch locations, PE-backed)
- The problem: Decentralized branch accounting managed on spreadsheets, order desk backlogs during seasonal peaks, single-point payroll dependency, and board scrutiny on SG&A overhead
- The team today: 11 specialists across accounts payable/receivable, order desk customer service, payroll, and operations
- The impact: $422,110 in annual SG&A savings (about 61%), ~$3.38M in added enterprise value at an 8x exit multiple, and a single standardized operating model across all six branches
- The timeline: 5-month phased rollout starting with AP/AR consolidation, scaling to order desk coverage, operations, and multi-site payroll
The situation
In private equity portfolio operations, expanding EBITDA margins ahead of exit requires aggressive SG&A discipline without sacrificing order volume or service levels. When multi-branch distributors manage core administrative tasks through disconnected spreadsheets and localized processes, back-office overhead swells, working capital stagnates in uncollected receivables, and reporting becomes difficult to defend during buyer diligence.
This specialty distributor operated with 400 employees across six locations, two years into a private equity hold period. The value creation plan demanded clear margin expansion, but overhead was trending in the wrong direction: each branch managed its own AP and AR on local spreadsheets, the order desk routinely fell behind during seasonal volume spikes, and payroll for all six facilities relied entirely on one internal person. With the board closely monitoring SG&A, hiring additional US back-office staff would directly compress margins.
How we started
The company began by attacking its most fragmented workflow: branch-level accounts payable and receivable. It started with two AP/AR Specialists working directly inside the central ERP to audit branch spreadsheets, standardize vendor invoicing workflows, and centralize collections follow-up for the two largest branches.
Once the centralized accounting model proved effective and cut down DSO, the company scaled quickly. Two additional AP/AR specialists onboarded to absorb the remaining four branches. With finance standardized, the company expanded the model to the order desk, procurement operations, and multi-facility payroll, turning six fragmented branch processes into a unified shared-services unit.
How the team grew
- Month 1: 2 AP/AR Specialists (centralization pilot for initial branch invoicing and collections)
- Month 2: 4 specialists (added 2 AP/AR Specialists to consolidate all 6 branches onto standardized ledger workflows)
- Month 3: 7 specialists (added 2 Customer Service Reps for order desk coverage and 1 Operations Assistant for PO matching)
- Month 4: 9 specialists (added 2 Customer Service Reps to manage seasonal peak volume and 1 Operations Assistant for order entry)
- Month 5: 11 specialists (added 1 Payroll Assistant to eliminate key-person dependency across all six sites)
The team expanded branch by branch and function by function, ensuring each operational workflow was documented and stable before onboarding the next cohort.
The team
- 4 AP/AR Specialists: Centralize invoice processing, collections follow-ups, and account reconciliations across all six locations.
- 4 Customer Service Reps: Staff the order desk to manage order status inquiries, deliver quotes, process returns, and resolve delivery questions.
- 1 Payroll Assistant: Collects timesheets and prepares multi-site payroll for every branch, packaging runs for controller review and approval.
- 2 Operations Assistants: Execute high-volume order entry, match purchase orders against receipts, and update vendor catalogs.
The controller retains full authority over every payroll run, disbursement, and credit decision. Specialists work directly inside the company’s enterprise systems under permissions granted, monitored, and controlled by company leadership.
The results
- $422,110 in annual SG&A savings: Reduced back-office administrative overhead by approximately 61% compared to domestic compensation benchmarks.
- ~$3.38M in enterprise value created: At an illustrative 8x exit multiple, the permanent annual EBITDA improvement generates substantial enterprise value for the hold.
- Single standardized operating model: Consolidated six localized, spreadsheet-driven branch processes into one uniform shared-services engine ready for exit diligence.
- Eliminated key-person payroll risk: Transferred manual timesheet and payroll prep to a dedicated specialist, removing operational vulnerability across 400 employees.
- Responsive order desk: Dedicated order coverage keeps pace with seasonal demand surges without pulling branch managers away from warehouse and yard operations.
The numbers
- US cost for the same eleven seats: $695,630 a year
- employmagic cost: $273,520 a year
- Estimated savings: $422,110 a year, about 61%
By role:
- AP/AR Specialist (4 seats): $263,484 in the US ($65,871/seat) against $108,160 with employmagic ($27,040/seat), saving $155,324 ($38,831 per seat)
- Customer Service Rep (4 seats): $232,804 in the US ($58,201/seat) against $79,040 with employmagic ($19,760/seat), saving $153,764 ($38,441 per seat)
- Payroll Assistant (1 seat): $75,738 in the US against $27,040 with employmagic, saving $48,698
- Operations Assistant (2 seats): $123,604 in the US ($61,802/seat) against $59,280 with employmagic ($29,640/seat), saving $64,324 ($32,162 per seat)
US costs use the US Bureau of Labor Statistics May 2025 median annual wage for the closest occupation (bookkeeping, accounting, and auditing clerks; customer service representatives; payroll and timekeeping clerks; procurement/order clerks), plus 30% for benefits, payroll taxes, and recruiting. For comparison, BLS puts the full cost of employee compensation at about 1.43 times wages for private industry overall (June 2026), so 30% is on the cautious side. employmagic costs use our starting rates for one full-time specialist at 40 hours a week, the same 2,080 hours a year the US salary covers. Faster hiring and lower turnover would add to the savings, but they are left out to keep the figures conservative. Your pricing depends on the roles and hours you need.
What made it work
- Direct EBITDA flow-through: Replacing domestic administrative hiring with dedicated remote specialists cuts SG&A without reducing branch operational capacity.
- Centralizing multi-branch silos: Eliminating branch-specific spreadsheets created a single source of truth for payables, receivables, and inventory POs.
- Staged functional deployment: Tackling accounting first established rigorous data protocols before expanding to order desk and payroll operations.
- Strong governance gates: Day-to-day transaction processing is handled offsite, while financial approvals, credit risk decisions, and payroll sign-offs stay strictly with the corporate controller.
Is this a fit for you?
This model works best for PE-backed distributors, logistics providers, and multi-location businesses looking to reduce SG&A, standardize branch operations, and expand EBITDA margins ahead of an exit. If your branches run disjointed back-office processes or seasonal order desk spikes are overwhelming internal staff, start with one or two specialists on your central billing queue, prove the workflow, and scale.