When to Hire an in-House Accounting/Finance Team: the Cost Benefit Break Down

Congrats! You raised your Series B :) You scraped to find Product/Market fit in your Seed Stage, then came market penetration in your Series A.

Now you’re thinking about scaling up and hiring a ton of people. Great! Just make sure that you hire the right people: those that are core to your product. 90% of the time you really don’t need to hire in-house accountants, but I have seen exceptions. The most common pitfall that we see is hiring a “VP of Finance”, “Controller” or “CFO” way too early.

The ideal accounting/finance team should have 3 levels:

• Staff Accountant ($60K pp salary)

  • Bookkeeping

  • Payroll

  • Benefits

• Controller ($120-150K pp salary)

  • VC/Board Financials

  • Tax Compliance

  • System Infrastructure

• CFO/CPA ($200K pp salary)

  • Advisory & Expertise

  • Valuation

  • Financial Modeling

You have two options:

1. HIRE AN ENTIRE ACCOUNTING/FINANCE TEAM

Pros:

• Achieves Breadth & Depth of service

• Accountability: Multiple levels of review

Cons:

• It’s expensive!!!: $400K per year

• Poor utilization: people will be sitting idle.

2. HIRE JUST A CONTROLLER OR STAFF ACCOUNTANT… maybe a CFO later?

You’re next thought might be to hire just one of those levels :)

Pros:

• Uh, none.

Cons:

• You wont get the breadth and depth of service that you need.

• Poor quality work / that person will be overworked.

• Its deceptively cheap: you’ll still need to outsource for tax or CFO advisory.

In sum, don’t bring accounting/finance in-house until your Outsourced Accounting/Finance team bills you more that $33K per month ($400K/12 months).

We have a number of outsourced CFOs who help our clients with recurring finance tasks, and our accounting team is comprised of leaders in the finance as a service industry. Talk to us about helping you scale your business!