SMB Finance Team Benchmarks by Revenue
When should companies hire bookkeepers, controllers, and CFOs? Benchmark data on finance function size and composition by stage.
Key Takeaways
- •Finance function typically costs 1-3% of revenue for SMBs (higher at smaller scale)
- •First dedicated finance hire usually comes at $500K-$1M revenue
- •Controller-level oversight typically needed by $3M-$5M revenue
- •CFO support (fractional) often makes sense at $3M+ when complexity or growth demands it
One of the most common questions from growing businesses: "When should we add finance staff, and who should we hire?" This research provides benchmark data to help you understand what's typical for companies at your stage.
About This Data
These benchmarks are compiled from industry research, SMB surveys, and patterns observed across hundreds of growing companies. Your specific needs may differ based on industry complexity, transaction volume, and growth trajectory.
Finance Team Evolution by Revenue Stage
As companies grow, their finance needs evolve. Here's a typical progression:
| Revenue Stage | Typical Finance Team | Finance Cost (% Revenue) |
|---|---|---|
| <$500K | Founder + outsourced bookkeeping | 2-4% |
| $500K-$1M | Part-time bookkeeper (10-15 hrs/wk) | 2-3% |
| $1M-$3M | Full-time bookkeeper or outsourced accounting | 1.5-2.5% |
| $3M-$5M | Bookkeeper + fractional controller | 1.5-2% |
| $5M-$10M | Bookkeeper + controller (F/T or fractional) + fractional CFO | 1.2-2% |
| $10M-$25M | 2-3 person accounting team + fractional/full-time controller + fractional CFO | 1-1.5% |
| $25M-$50M | 3-5 person accounting team + full-time controller + fractional CFO | 1-1.3% |
| $50M+ | Full finance department with full-time CFO | 0.8-1.2% |
Complexity Matters More Than Revenue
A simple $10M service business might need less finance support than a complex $5M manufacturing company with inventory, international sales, and multiple entities. Adjust these benchmarks based on your specific complexity drivers.
Finance Roles Explained
Understanding what each role does helps you hire the right person at the right time:
Bookkeeper
Records transactions, categorizes expenses, reconciles accounts, processes payables/receivables. Produces basic financial reports.
Typical cost: $25-$50/hr or $40K-$65K/year full-time
Controller
Manages accounting function, ensures timely close, implements controls, produces compliant financial statements. Oversees bookkeeper(s). May handle basic FP&A.
Typical cost: $80K-$150K/year full-time or $2K-$5K/month fractional
CFO
Strategic financial leadership. Forecasting, financial modeling, capital strategy, investor relations, major decision support, board reporting. Shapes future, not just records past.
Typical cost: $200K-$400K/year full-time or $5K-$15K/month fractional
When to Add Finance Roles: Decision Triggers
Rather than waiting for a specific revenue number, watch for these triggers that indicate you're ready for the next level of support:
Add Bookkeeper When...
- Founder spends 5+ hrs/week on bookkeeping
- Books are frequently behind or messy
- Revenue exceeds $500K
- Transaction volume makes DIY impractical
Add Controller When...
- Monthly close takes too long (>15 days)
- Financial statements have accuracy issues
- Revenue exceeds $3M-$5M
- You need audit-ready financials
Add CFO When...
- Preparing for fundraise or M&A
- Board/investors expect strategic finance
- Major strategic decisions need analysis
- Cash management is complex or stressful
Expand Team When...
- Current team consistently over capacity
- Month-end close requires overtime
- Transaction volume outpaces capacity
- Key person risk becomes concern
Full-Time vs. Fractional: When Each Makes Sense
Not every role needs to be full-time. Here's guidance on when fractional or outsourced arrangements work:
| Role | Fractional/Outsourced Until... | Full-Time Makes Sense At... |
|---|---|---|
| Bookkeeping | $1M-$3M revenue | $2M-$5M+ with high transaction volume |
| Controller | $5M-$15M revenue | $10M-$25M+ with complexity |
| CFO | $3M-$50M revenue | $30M-$75M+ (varies widely) |
The Hybrid Model
Many companies use a combination: full-time bookkeeper, fractional controller who checks in weekly, and fractional CFO for strategic guidance. This provides all levels of expertise at appropriate cost levels.
Industry-Specific Variations
Some industries require more finance support earlier due to inherent complexity:
Higher Finance Needs (Earlier)
- Manufacturing/Distribution: Inventory, COGS complexity, multiple locations
- Construction: Project accounting, job costing, WIP tracking
- Healthcare: Regulatory requirements, reimbursement complexity
- SaaS: Subscription metrics, revenue recognition, investor reporting
Lower Finance Needs (Simpler)
- Professional Services: Simple revenue model, minimal inventory
- Consulting: Time and materials, straightforward billing
- Single-location Retail: Basic inventory, point-of-sale systems
Maximizing Finance Function Efficiency
Use Technology
Modern accounting software, automation tools, and integrated systems reduce manual work and the staffing needed.
Right-Size Roles
Match skill level to task. Don't pay CFO rates for bookkeeping work. Hire the right level for each function.
Outsource Strategically
Outsourced accounting firms can provide bookkeeper-through-CFO services, scaling with your needs.
Invest in Systems
Better processes and systems reduce the labor required. Often pays for itself in efficiency gains.
Frequently Asked Questions
When should I hire my first finance person?
Most businesses hire their first dedicated finance person (typically a bookkeeper) around $500K-$1M in revenue, or when the founder is spending more than 5-10 hours per week on financial tasks. Before this, outsourced bookkeeping services are often sufficient and more cost-effective.
At what revenue should I have a controller?
Controller-level support typically becomes valuable around $3M-$5M in revenue, especially if you have complexity (inventory, multiple locations, investor reporting). A controller ensures proper financial controls, timely close, and accurate reporting—beyond what a bookkeeper provides.
When do I need a CFO?
CFO need is driven more by complexity and decisions than by revenue. Common triggers include: preparing for fundraising, significant M&A activity, board/investor reporting requirements, complex strategic decisions, or when your controller is overwhelmed with strategic work. Many $5M+ companies benefit from fractional CFO support.
Should finance people be full-time or fractional?
It depends on the workload. Bookkeeping can often be outsourced until $3M-$5M revenue. Controller can be fractional until you need 30+ hours/week of oversight. CFO is almost always fractional for companies under $50M revenue—the full-time cost is hard to justify below that level.
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