The usual version of this question is about size. At what turnover, how many staff, which funding round. It is the wrong question, and it produces answers that are either too early or badly too late. The better question is whether the decisions the business now makes have outgrown the information available to make them.
Why turnover thresholds do not work
Businesses of the same size can have completely different finance needs. A consultancy with a handful of large clients, predictable costs and no stock can run comfortably on modest financial infrastructure for a long time. A manufacturer of the same turnover, with inventory, capital equipment, variable input prices and a hundred customers, is a substantially harder financial problem.
What actually creates the need is complexity and consequence: how many moving parts there are, and how expensive it is to get a decision wrong. A rule of thumb based on revenue misses both.
The signs that usually matter
In practice the need announces itself in fairly recognisable ways.
The numbers arrive too late to act on. Management information for one month lands halfway through the next, or later. It is accurate, and by the time it appears the period it describes is closed and the decisions it might have informed have already been taken.
Cash keeps surprising you. The pattern persists beyond a genuinely unusual month. The business is trading well and the balance still moves in ways nobody predicted. The bank account is being watched, but nobody owns the forward view.
Decisions are being made on recollection. Pricing, hiring and investment get decided on a strong sense of how things are going. That instinct is usually well founded; an owner who has run the business for years knows it intimately. As the business becomes more complicated, however, the detail can start to tell a different story.
The forecast carries little weight. There is a forecast, and nobody quite trusts it, including the person who built it. Reality moves away from it without prompting a revision. It exists because the bank asked for one.
Something material is coming. A funding conversation, a lease commitment, an acquisition, a large contract, taking on premises. These decisions need more than a rough answer, especially when someone outside the business will examine the numbers.
Nobody owns the forward view. This is the most common and the least visible. The bookkeeping is done. The accountant files everything on time. The reporting is produced. And there is no one whose job is to look at what all of it means for the next twelve months and say so plainly.
You are doing it yourself. The founder is the de facto finance director: building the models at the weekend, chasing the debtors and deciding what the numbers mean. It works, up to a point. Past that point it consumes the attention that ought to be going into the things only the owner can do.
One of these on its own is normal. Several at once, persistently, is the signal.
A six-company group had bookkeepers and accountants in every business, each doing their own work properly. The detail across the group had no owner. Operating measures differed from company to company, and received opinion went untested against the facts. Once profitability and cash were analysed on the same basis everywhere, the acquisition opportunities in front of the group could be assessed on evidence. Several that might otherwise have proceeded were dropped, because the analysis did not support them. Complexity and consequence were the signal here.
Why "hire a CFO" is usually the wrong first move
Having recognised the need, the instinctive response is to fill the role. For most businesses at this stage that is premature, and occasionally it is actively harmful.
A senior finance appointment brings a substantial fixed commitment: the salary, the organisational weight of a permanent senior role, the recruitment process, and the difficulty of unwinding it if the shape of the need turns out to be different from what you assumed. It also assumes you already know what you need, which is precisely the thing that tends to be unclear at the point the question first arises.
Worse, it can solve the wrong problem. If reporting takes five weeks to produce, a CFO will be left waiting for it. The reporting needs fixing first. Hiring seniority on top of a weak foundation produces an expensive person with the same poor information.
The range of sensible answers
There is a good deal of ground between the current arrangement and an employed CFO, and most businesses find their answer somewhere in the middle.
Your existing arrangement may be sufficient. If the business is stable, the reporting is timely and the decisions in front of you are ones you have made before, a competent accountant and a good bookkeeper may be exactly right. Adding senior finance capability to a business that does not need it is cost without return.
A one-off review may be enough to settle the question. Where several things feel wrong at once and it is genuinely unclear which matters most, a bounded piece of work that establishes what is actually broken is usually a better first step than a hiring decision. Sometimes it produces two or three specific fixes and no ongoing requirement, which is a legitimate and useful outcome.
Fractional CFO support fits the common case. Where the business needs CFO-level judgement at decision points but could not justify a permanent appointment, senior input on a defined and flexible basis covers the need without the cost and commitment of employing someone in-house. Its scope can follow the decisions the business is facing.
A full-time CFO becomes right eventually. The argument for employing someone becomes straightforward once the finance function needs day-to-day leadership, financial decisions arise continuously and the economics comfortably support the role. Reaching that point is a good sign. Arriving at it before the business is ready is not.
A practical test
Think about the decisions coming in the next six months. Which one would you be unwilling to make with the information you currently have?
If nothing comes to mind, you probably do not need to change anything yet. If something does and you cannot say confidently what the numbers would tell you about it, that is the gap. It is worth being specific about its shape before deciding how to fill it, because the shape determines whether the answer is better reporting, a piece of focused work, ongoing senior input, or in time an appointment.
If you are trying to work out which of those is right, CFO support explains what ongoing senior input covers, and The Pelican Finance Health Check is the usual way to establish what is actually wrong first. Back to Insights.