When to Hire an in-House Accounting/Finance Team: the Cost Benefit Break Down
Table of contents
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!
Categories:
Human Resources
Also read
Recent questions
Top viewed questions
- What happens if the IRS audits me and I do not have the receipt for an expense (assuming it was a legitimate expense)?
- How should convertible note financing be handled on the balance sheet?
- How do startups account for equity and fundraising on the Balance Sheet?
- For startups incorporating in Delaware, what firms are good registered agents to use?
- 2025 Founder Salaries by Stage