your first finance hire

CEO, CFO, COO… SOS!

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So the time has come for you to make your first finance hire. (If you’re still not sure, be sure to read our other blog article to determine if you’re ready for an in-house team.)

In the initial stages of a start-up, it’s common for founders to wear many hats including handling the finance side of things. 🎩 However, as the company grows, this can become increasingly complex and unmanageable.

Businesses often don't prioritise a finance hire at the beginning of their journey when cash is put into more pressing matters (understandably) like engineers and legal advice. However, an uninformed approach to finance hiring could lead to flawed business planning or improperly managed finances, ultimately putting your business in danger.

For start-ups, who to choose may not be as obvious as it first appears. For an ecommerce brand, taking over bookkeeping might be the priority, whereas a FinTech company might need a CFO even at the seed stage. We’ve broken down 3 roles of varying seniority and weighed up their pros and cons for a company in its start-up stage.

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CFO first 🦈

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A CFO is the most senior role you can hire for and their focus is strategy, strategy, strategy. Bringing in a CFO early on could mean your strategy in the coming months further facilitates growth, such as through capital allocation, optimisation or fundraising functions. 

That being said, with this ‘bigger picture’ view, they’ll likely put less time towards detailed process planning, which could lead to operational problems further down the line, be that slow reporting cycles, errors in the reporting or frequent outsourced bookkeeping changes. Furthermore, start-ups may be too young to fully take advantage of such a range of specialised skills and qualifications.

⚡Round up: a CFO might be a bit of an overkill, plus we’d only recommend them if they’re as competent in building automated processes as they are raising funding.

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Finance manager first 🦉

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These mid-seniority roles are hard to generalise as they can cover a number of titles and functions. We’d say that their main focus is defining and implementing processes. Focusing more on the details than their CFO counterparts, they are pros in streamlining cost efficiencies. They’ll be able to paint a picture of your financial situation to better inform decision-making. As such, an integral element needed will be knowledge of your company’s industry.

⚡Round up: these roles are often the best choice as first finance hires for start-ups. They’ll tap into the ongoing processes of the business as automation moves from being functional to analytical.

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Bookkeeper first 🐝

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Last on the food chain, we have bookkeepers and finance assistants. These worker bees carry out the processes built by the operation finance specialists, be they payment runs or payroll. Unsurprisingly, a lot of founders go for these roles straight off the bat as it’s often these tasks that they’ll have been carrying out themselves. Plus, it’s the cheapest choice and therefore less of a risk.

However, from experience, we’ve noticed that this can actually lead to more trouble. You’ll likely find that they work remotely, have minimal contact with the team and have little commercial understanding of the business. Without established processes, they’ll implement whatever seems convenient to them. 

⚡Round up: a bookkeeper is great if you can integrate them into the team and if they’re as confident designing processes as they are following them.

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