You Don't Need a CFO: Understanding the Controller's Role
There's a growing trend among small businesses to rush into hiring a CFO, either in-house or through a virtual service, believing it's the key to leveling up. However, most small businesses—especially those under $10 million in revenue—don't need a CFO yet. What they do need is solid controllership. Everything in finance begins with accurate accounting, strong processes, and solid internal controls. In many cases, skipping the controller step leads to confusion, inefficiency, and poor decision-making down the road.
This post will clarify when a business really needs a CFO, the crucial role of the controller, and how to avoid being misled by "CFO" titles that don't always match the expertise you expect.
1. Everything Starts with Good Accounting
CFOs rely on accurate, timely data to make smart financial decisions. Without it, even the best CFO is flying blind. This is where controllers shine. They ensure:
- Accurate bookkeeping and financial records
- Timely and reliable financial reporting (e.g., monthly close processes)
- Internal controls to safeguard the company's assets and reduce risks
- Cash flow tracking and forecasting tools to avoid surprises
If you don't have solid processes and clean data, hiring a CFO won't help. Good decisions depend on good data. The controller's role is to build the foundation that future CFOs can rely on to make strategic moves.
2. You Can't Skip the Controller: It's a Crucial Step
A common mistake small businesses make is trying to leap from DIY bookkeeping or an outsourced bookkeeper directly to a CFO. But that's like building the second floor of a house before finishing the first.
Controllership is the bridge between basic bookkeeping and strategic financial leadership. It brings structure, accountability, and systems into your business. Without these in place, even high-level financial advice from a CFO will be ineffective.
A good controller ensures:
- Processes are followed consistently across your organization
- Systems are scalable as your business grows
- Compliance with tax and regulatory standards
- Operational KPIs are tracked so you know what's working
Skipping this step could leave your business exposed to errors, fraud, or unreliable financial information, making strategic decisions more of a guessing game.
3. Be Careful: Not Every "Virtual CFO" Is What You Expect
Recently, there's been a rise in bookkeepers branding themselves as "virtual CFOs" or offering part-time CFO services. While some of these professionals add value, many fall short of delivering true CFO-level insight. A title alone doesn't guarantee expertise.
A true CFO has experience in areas like:
- Fundraising, mergers, and acquisitions
- Debt structuring and capital allocation
- Long-term strategic financial planning
Unfortunately, some virtual CFOs may be glorified bookkeepers with limited experience in strategic finance. While this isn't to disparage other firms, it's important to vet anyone you hire—whether internally or as an outsourced solution. Ensure the person has the right background for the role your business truly needs.
4. Most Small Businesses Don't Need a CFO (Yet)
If your business is doing under $10 million in revenue, you likely don't need a full-time CFO. What you need is good controllership that ensures your business runs smoothly, your books are accurate, and your financials are up-to-date. For companies at this stage, a controller provides:
- Operational efficiency through standardized processes
- Actionable insights from financial reports
- Budget oversight and cost control
- Confidence that the financial foundation is solid and ready to scale
When it's time to fundraise, acquire another business, or undergo rapid expansion, you can bring in a fractional CFO temporarily to provide strategic guidance. But until then, operational finance is what matters most—and that's the controller's domain.
Conclusion: Build Your Financial Foundation First
Before hiring a CFO, focus on getting your financial house in order with strong controllership. The right controller will give you the solid financial processes, internal controls, and reliable data your business needs to thrive. With these systems in place, you'll know when the time is right to bring in a CFO—and you'll have the foundation to support their strategic guidance.
Take Control of Your Finances—The Right Way
If your business needs controller-level services to streamline your operations and set you up for future growth, let's talk. We specialize in helping businesses like yours build a strong financial foundation, so when it's time to scale, you'll be ready.