Outside firm, Head of Finance, then two tracks
Use a firm for bookkeeping. Hire a Head of Finance to own the numbers and the plan. Around $8–12M ARR, they take the track they’re stronger in and you hire for the other. A VP of Finance leads both.
- 01Outside accounting firmAre the books right every month?Bookkeeping, monthly close and tax.~$0–8M ARR
- 02Head of FinanceWho owns the numbers and the plan?Runs the firm, the model and the board pack.~$3–8M ARR
- The Head of Finance keeps one track; you hire for the other03AControllerCan we trust the numbers without checking?Books track.03BFP&A leadAre we using the numbers to decide?Plan track.~$8–12M ARR
- 04VP of FinanceWho runs finance so the CEO doesn’t?Leads both tracks. Often the Head of Finance, promoted.~$15–20M ARR
- 05CFOWho owns capital strategy?Leads the VP and owns the capital plan.~$30M+ or a capital event
Before the ladder: founder-run finance. You keep the books and see a CPA at tax time. That stops working once you have payroll, investors or more accounts than you can reconcile.
ARR ranges are rough. Payments, usage billing, a raise or an exit pull rungs forward. AI companies often hit these ARR levels with much smaller teams.
Hire to the pain. If the numbers are wrong, hire a controller. If the numbers are right but nobody uses them, hire FP&A.
Signals for each hire
If any “not yet” is true, fix it before you hire.
| Rung | Hire when | Not yet | Hire for |
|---|---|---|---|
| 01 Outside accounting firm | You have paying customers and payroll, or an investor wants monthly financials. By $1–3M ARR, move to accrual books, ASC 606 revenue recognition and a monthly close. | You’re pre-revenue with a handful of transactions a month. A CPA at tax time is enough. | A firm that knows SaaS revenue and closes within 15 days. If you run payments or usage billing, one that has reconciled them before. |
| 02 Head of Finance | The firm closes clean books, but the CEO still builds the budget, board deck and cash forecast, spends 5+ hours a week on finance, and can’t quickly answer CAC by channel or margin by product. | The books are messy. Fix the close with the firm first. A Head of Finance can’t clean up the past and build the plan at the same time. | An accounting background, often a CPA who moved into SaaS FP&A. Has run a close and built a model, and wants to be in the numbers every day. |
| 03A Controller (books) | The close takes over 15 business days, ARR and recognized revenue don’t tie, payments or usage billing need daily reconciliation, or an audit or QoE is coming. | The firm closes accurately in under 15 days and revenue ties to billing. | Your Head of Finance, if the books are their strength. If not, a CPA who has run a close, built controls and passed an audit. Keep the firm or add an in-house bookkeeper for volume. |
| 03B FP&A lead (plan) | The books are clean, but the budget lives in the CEO’s spreadsheet, departments plan headcount without a model, and the board wants margin by segment. | The close isn’t accurate. You can’t forecast from numbers you don’t trust. | Your Head of Finance, if planning is their strength. If not, someone who builds driver-based models from CRM, billing and usage data, and reviews budget vs. actual with each department monthly. |
| 04 VP of Finance | Both tracks have an owner, and the CEO still runs the board deck, the bank and the budget. | Only one track is staffed, and your Head of Finance still covers the plan. | Ideally your Head of Finance, promoted. If not, someone who has run accounting and planning together and still builds the model. |
| 05 CFO | A large raise, debt facility, acquisition or exit is 12–18 months out, and buyers or lenders need one person who owns the numbers. | The next 18 months are about operating. A VP of Finance can carry the board. | Someone who has led a raise, M&A or exit at your stage, and owns investor relations and the capital plan. |
One hire who does both, then picks a track
About the same cost, and they do the work
A fractional CFO costs about $5–15K a month for a few hours of advice a week. A Head of Finance works in the numbers daily, and the model and the context stay in the company.
The CEO and the Head of Finance decide together, 12–18 months in
Look at which half of the job they’ve done best, the close or the plan, and which one the company needs most next. They keep that track, and the CEO hires someone for the other.
Bring in a CFO for a capital event
A large raise, debt facility or sale within 12 months needs CFO experience. Hire one for that project, with an end date.
Interview with a two-part work sample. Ask them to walk through how they’d run your month-end close, then to rebuild your hiring plan in a model. Whichever part they do better points to their track.
Which track to staff first depends on your business model
Use this when you hire the Head of Finance and again at the fork, to decide which strength to hire for first.
Books track
Controller and accounting team
Owns the close, revenue recognition, reconciliation, controls and the audit.
Plan track
FP&A and strategic finance
Owns the budget, forecast, unit economics, pricing and the board model.
| Business model | Staff first | Why |
|---|---|---|
| Vertical SaaS with embedded payments | Books | Payments can be most of your revenue, and every dollar of money movement has to reconcile. Blended gross margin runs 45–60%, so plan in gross profit dollars rather than margin percent. |
| AI with usage or outcome pricing | Books, with plan close behind | Revenue follows consumption, and inference is a cost that grows with every customer. You need billing that ties to the GL, then a model of margin by customer and feature. Expect 45–55% gross margin, versus 75%+ for classic SaaS. |
| Seat-based SaaS with a strong outside firm | Plan | If the close is already clean, what’s missing is a plan for headcount, pricing and the next raise. Keep the firm on the books until $15–25M ARR. |
Four expensive mistakes
Paying a fractional CFO on retainer
Outside a capital event, the work is daily: the model, the board pack and managing the firm. That needs an employee.
Hiring a full-time CFO first
Without a clean close, a CFO spends the first year doing a controller’s work.
Forecasting on bad books
If the close isn’t accurate, the forecast built on it won’t be either.
Running the books yourself for too long
Every month of founder-kept books is a month someone has to rebuild before a raise, audit or sale. The cleanup is rough, and the risk isn’t worth the savings.
Before your next finance hire
- Name the rung you’re on today.
- Measure your close: days to close, and corrections after.
- Name the problem: wrong numbers or no plan. That tells you which track to hire for.
- List the capital events in the next 18 months: raise, debt, M&A, exit. If one is within 12 months, scope a CFO project.
- Write the scorecard, then start the search. Use the Who Method.
- Run the two-part work sample: your close, then your hiring plan.