Do You Really Need a CFO? Here’s What Founders Should Know

What Does a CFO Actually Do?

A CFO is not just a glorified accountant or bookkeeper. While accountants handle historical financial data, a CFO’s role is forward-looking and strategic—they’re your financial compass, steering the business toward sustainable growth.

Key Responsibilities of a CFO:

1. Developing Financial Strategy: Creating financial models, budgets, and forecasts aligned with your business goals.
2. Fundraising: Crafting investor-ready financial reports, preparing for meetings, and negotiating deal terms.
3. Cash Flow Management: Ensuring your startup always has the liquidity it needs.
4. Risk Mitigation: Identifying and managing financial risks that could impact your business.
5. Tax and Regulatory Compliance: Overseeing tax filings, audits, and adherence to financial laws.
6. Performance Analysis: Tracking KPIs and translating data into actionable insights for growth.

One of our clients, a SaaS company, needed to secure funding for rapid expansion. Their CFO didn’t just crunch numbers—they helped craft a financial model and pitch deck that landed a £2 million Series A investment.

When Should You Consider Hiring a CFO?

Not every startup needs a CFO from day one. However, there are certain milestones or pain points that signal it might be time to bring one on board.

Signs You Might Need a CFO:

1. You’re Scaling Rapidly: Growth is great, but it often brings financial complexity, like larger budgets, forecasting challenges, and increased operational costs.
2. Fundraising is on the Horizon: If you’re planning to raise a seed round, Series A, or beyond, having a CFO who understands investor expectations is invaluable.
3. Cash Flow Struggles: Difficulty managing inflows and outflows is a common issue for growing businesses—and one a CFO can solve.
4. Revenue Streams Are Complex: Subscription models, SaaS billing, or multiple revenue streams require advanced financial modeling.
5. You’re Stretched Too Thin: If you’re spending more time worrying about spreadsheets than strategy, it’s time to delegate.

A healthtech founder approached us when their revenue tripled in six months. Managing investor relations, operational costs, and cash flow became overwhelming. By hiring a virtual CFO from Accountancy Cloud, they stabilized operations and laid the groundwork for future growth.

Do You Need a Full-Time or Fractional CFO?

Hiring a full-time CFO isn’t always the most practical option for early-stage startups. The average CFO salary in the UK exceeds £120,000 annually—a cost many startups can’t justify. Instead, fractional or virtual CFOs offer an affordable and flexible solution.

Full-Time CFO:

• Best for larger businesses with significant revenue.
• Ideal for companies managing frequent funding rounds, mergers, or international operations.

Fractional/Virtual CFO:

• Perfect for startups needing strategic financial expertise on a part-time basis.
• Focuses on high-impact projects like fundraising, financial planning, or scaling operations.

Virtual CFO services, like those offered at Accountancy Cloud, provide on-demand expertise without the overhead of a full-time hire. This approach lets startups access top-tier financial insights tailored to their needs.

How a CFO Adds Value to Your Startup

Hiring a CFO isn’t just about managing numbers—it’s about unlocking growth and ensuring financial health. Here’s how a CFO makes a measurable impact:

1. Preparing for Fundraising

A CFO ensures your financial data and narrative align perfectly with investor expectations. They’ll optimize your pitch deck, answer tough financial questions, and guide you through due diligence.

A fintech startup we supported raised £2 million after their virtual CFO revamped their financial model and implemented clear metrics to showcase their growth potential.

2. Optimizing Cash Flow

Cash flow problems are one of the top reasons startups fail. A CFO can implement strategies to improve payment terms, cut unnecessary costs, and forecast future liquidity needs.

3. Data-Driven Decision-Making

With access to real-time financial data, a CFO enables founders to make smarter, faster decisions—whether it’s about launching a new product or entering a new market. An e-commerce founder we worked with expanded into three new markets, thanks to their CFO’s market-entry strategy, increasing revenue by 40% within a year.

4. Mitigating Risks

From preparing for tax audits to navigating economic downturns, a CFO anticipates risks and creates safeguards to protect your business.

Alternatives to Hiring a CFO

If a CFO feels out of reach, there are other options to ensure your finances remain in good hands.

1. Outsourced Accounting Services

These can handle bookkeeping, tax filings, and payroll but lack the strategic input of a CFO.

2. Accounting Software

Platforms like Xero and QuickBooks simplify day-to-day financial management. They’re great for tracking income and expenses but don’t provide the big-picture insights a CFO can offer.

3. Financial Advisors

These professionals can provide high-level guidance on an ad-hoc basis but typically don’t get involved in operational details.

Pro Tip: Many startups use a combination of these solutions until they’re ready to hire a fractional or full-time CFO.

Do You Really Need a CFO?

Deciding whether to hire a CFO depends on where your business is in its journey. If you’re scaling rapidly, planning a funding round, or feeling overwhelmed by financial complexities, a CFO—even a fractional one—can be transformative. Their expertise isn’t just an expense; it’s an investment in your startup’s future.

At Accountancy Cloud, we specialize in providing flexible, cost-effective virtual CFO services tailored to startups and scale-ups. Whether you need help with fundraising, financial modeling, or cash flow management, our team is here to help.

Ready to take control of your finances? Talk to a virtual CFO today and unlock your startup’s full potential.