When should a founder hire a CFO?

Founders usually ask this as a revenue question. It is a complexity question. A business with one product, one channel and predictable collections can run past a scale that surprises people on a strong controller and a good outside accountant. A business with multiple entities, inventory, deferred revenue, project accounting or an imminent financing event needs a CFO well before that.

The three jobs people confuse

• Bookkeeping — the transactions are recorded correctly and on time.
• Controller — the close is clean, the reporting is reliable, and controls exist.
• CFO — capital structure, forecasting, pricing and unit economics, board and lender relationships, and the decisions the numbers imply.

Hiring a CFO when the real gap is a clean monthly close produces an expensive person doing a controller's job badly. Hiring a controller when the real gap is capital strategy produces immaculate reports about a course nobody chose.

Signals it is time

• You are making pricing, hiring or capital decisions on instinct because the forecast is not trusted.
• A financing, acquisition or major lender relationship is within twelve months.
• Cash and profit are diverging and nobody can explain the difference on demand.
• The founder is the finance function's bottleneck.

The interim answer

A fractional CFO for two or three days a month is often the correct move for a year or two: it buys the judgment without the salary, and it makes the eventual full-time hire far easier to specify. The failure mode is treating fractional as permanent long after the role has become full-time work.