What $5M, $15M, and $30M Companies Should Spend on Finance
"Am I spending enough on finance? Am I spending too much?" These are common questions without easy answers. Here are benchmarks and frameworks to help you understand what appropriate finance investment looks like at each stage of growth.
Key Takeaways
- •Finance spend typically runs 1-3% of revenue, declining as a percentage as companies grow
- •The mix shifts from accounting to strategic as companies mature
- •Underspending creates risk; overspending doesn't automatically add value
- •Right-sizing depends on complexity, industry, and strategic needs—not just revenue
Finance function spending is one of those business decisions where "it depends" is the honest answer. A $15M manufacturing company with complex inventory and dozens of vendors needs more finance support than a $15M professional services firm with simple operations. Industry, complexity, and growth rate all matter.
That said, benchmarks help. If you're dramatically above or below typical ranges, it's worth understanding why—and whether that's intentional.
The General Framework
Finance spending typically includes:
- Internal headcount: CFO, controllers, accounting staff, FP&A
- External services: Outsourced bookkeeping, fractional CFO, tax preparation
- Software: Accounting systems, FP&A tools, expense management
- Professional fees: Audit, tax advisory, specialized consulting
| Revenue Range | Typical Spend | % of Revenue |
|---|---|---|
| $3-5M | $60-150K | 1.5-3.0% |
| $5-10M | $100-200K | 1.5-2.5% |
| $10-20M | $150-350K | 1.2-2.0% |
| $20-50M | $300-600K | 1.0-1.5% |
| $50M+ | $500K-1M+ | 0.8-1.5% |
The Economies of Scale
Finance cost as a percentage of revenue typically declines as companies grow. A $5M company might spend 2% on finance; a $50M company might spend 1%. The absolute dollars increase, but the ratio decreases due to scale efficiency.
What Finance Looks Like at Each Stage
$3-5M Revenue
Typical structure:
- Outsourced or part-time bookkeeping
- Owner-managed financial decisions
- Basic accounting software (QuickBooks)
- External CPA for tax and occasional advice
Common gap: Strategic finance. The books get done, but there's no one thinking proactively about cash flow, pricing, or growth planning.
$5-10M Revenue
Typical structure:
- Full-time bookkeeper or staff accountant
- Fractional CFO or controller for strategic work
- Upgraded accounting software, possibly ERP
- External CPA plus some advisory relationships
Common gap: FP&A capability. The books are accurate, but forecasting and analysis are weak or nonexistent.
$10-20M Revenue
Typical structure:
- Accounting team (2-3 people) led by controller
- CFO (full-time or high-commitment fractional)
- ERP system with more sophisticated reporting
- Deeper advisory relationships (banking, legal, accounting)
Common gap: Systems and automation. Processes are often still manual, creating bottlenecks and errors.
$20-50M Revenue
Typical structure:
- Full accounting team (4-8 people)
- Full-time CFO with FP&A capability
- Robust ERP and reporting infrastructure
- Possibly dedicated treasury or tax functions
Common gap: Audit readiness and institutional controls. Many companies at this stage have weak internal controls despite their size.
Factors That Increase Finance Needs
- High transaction volume: More invoices, more payments, more complexity
- Inventory: Inventory accounting adds significant complexity
- Multi-entity: Multiple legal entities require consolidation and intercompany accounting
- Regulatory requirements: Some industries require more robust financial controls
- M&A activity: Acquisitions require significant finance integration work
- PE or investor backing: Investors require better reporting and more finance capability
- Complex revenue recognition: Project-based, subscription, or milestone billing
- International operations: Currency, transfer pricing, and multi-jurisdiction compliance
A $10M manufacturing company with inventory, international suppliers, and complex cost accounting might need finance support equivalent to a $25M professional services firm.
Build vs. Buy: Internal vs. Outsourced
At each stage, companies face decisions about what to do internally versus outsource:
| Function | Typically Internal When... | Consider Outsourcing When... |
|---|---|---|
| Bookkeeping | High volume, need real-time access | Lower volume, cost-sensitive |
| Controller | $15M+ revenue, complex operations | Smaller companies, less complexity |
| CFO | $30M+ or PE-backed with daily needs | Strategic needs without daily requirements |
| Tax | Rarely—almost always outsourced | Almost always |
| FP&A | Ongoing, detailed analysis needs | Periodic strategic planning |
The Hybrid Approach
Many companies use hybrid models: internal staff for high-volume transactional work, outsourced specialists for strategic work or technical areas. This often provides the best cost/capability balance.
Signs of Under or Over Investment
Signs You're Under-Investing
- Financial statements consistently late or unreliable
- Cash surprises—you don't know your cash position day-to-day
- No ability to forecast or scenario plan
- Tax surprises and compliance issues
- Unable to answer banker, investor, or buyer questions quickly
- Key decisions made without financial analysis
Signs You're Over-Investing
- Finance team produces reports no one uses
- Analysis paralysis—decisions delayed for unnecessary precision
- Finance headcount growing faster than business complexity
- Sophisticated systems with no clear value delivered
- CFO compensation out of line with company stage
Need Help Right-Sizing Your Finance Function?
Eagle Rock CFO helps businesses build finance capabilities matched to their stage and needs. Whether you need to upgrade from owner-managed finances or optimize an existing team, we can help.
Assess Your Finance Needs