How to Build a Finance Team from Scratch

Building a finance function from scratch is one of the most consequential operational decisions a founder or CEO makes. The sequence of finance hires, the salaries you set and the boundaries you draw between roles shape the quality of your financial management for years. Get the sequencing right and each hire builds on the last. Get it wrong and you end up with a mismatched team, unclear accountability and financial problems that compound in the background while the business grows.

This guide is for founders, CEOs and operational leaders building a finance team for the first time, or professionalising an informal one. It covers the sequence of hires and their triggers, the move from outsourced to in-house, systems, recruiting each role and the common mistakes. To test the shape of an existing team, see our guide on how to structure a finance team; for budgets, see finance team costs in the UK.

Why the Sequence Matters

Most businesses build their finance function in roughly the same order, because each role depends on the layer beneath it working reliably. A Financial Controller cannot produce clean management accounts from unreliable transaction data. A Finance Director cannot provide commercial insight while the FC is still firefighting month-end problems. A Finance Business Partner cannot partner with the business on late or inaccurate information.

So the order of hires matters as much as the hires. The common, expensive mistake is skipping a layer — an FD before a functioning FC, or an FC before reliable bookkeeping. Either way a senior person spends their time on the layer below’s work, and the business pays for seniority it is not getting.

Starting From Scratch: Three Decisions Before the First Hire

1. Put the systems in first

Set up the accounting platform, bank feeds, a sensible chart of accounts and a basic purchase and expense approval process before you recruit. A new hire walking into a clean system is productive from week one; one walking into spreadsheets spends months rebuilding records. The Companies Act requires adequate accounting records from the start. Where records are already poor, an interim or fractional Financial Controller usually fixes them faster than a permanent hire who would otherwise inherit the clean-up.

2. Decide what stays outsourced

Statutory accounts, Corporation Tax and payroll bureau services usually stay with external providers for some time; bookkeeping and management information are the first things worth bringing in-house. Our comparisons of a Financial Controller versus outsourced finance and a fractional FC versus outsourced accounting show where the line usually falls.

3. Choose the right first hire

The first hire is usually a bookkeeper or Accounts Assistant (the problem is transaction volume), a fractional Financial Controller (numbers are late or unreliable but senior work is one or two days a week), or a Finance Manager (you need someone in-house owning the close, cash and reporting daily). The stages below set out the triggers.

Stage One: The Foundation — Bookkeeper or Accounts Assistant (£3m and below)

Every finance function starts with someone processing transactions: sales and purchase invoices, bank reconciliations, expense claims, payroll data entry. This needs attention to detail, consistency and familiarity with your accounting software — not a professional accounting qualification.

Early on, this work is often done by the founder, an administrator or an external bookkeeper. That works until volume, complexity or management’s need for reliable information outgrows it. The typical trigger for the first in-house hire is information from the external bookkeeper that is consistently late or inaccurate, a founder spending more than a few hours a week on finance administration, or the approach of first VAT registration or PAYE obligations.

The hire is a part-time or full-time bookkeeper, or an Accounts Assistant handling transactional finance under limited supervision. AAT is appropriate at this level; a fully qualified accountant is over-qualified and will leave quickly. London salaries typically run from the mid £20ks to the low £30ks, with experienced bookkeepers running the ledgers alone sometimes commanding more; outside London, the low to mid £20ks is typical. See our bookkeeper job description.

Keep the external accountant for year-end statutory accounts, Corporation Tax and complex technical matters: the bookkeeper feeds them the data, they produce the statutory output. That division of labour suits a business below roughly £3m–£5m revenue. Towards the top of the band, many businesses add a fractional Financial Controller one day a week — typically £29,000–£39,000 a year in London — to review the ledgers and produce reliable monthly management accounts. Our guide on when to upgrade from a bookkeeper to a Financial Controller covers the warning signs.

Stage Two: In-House Finance Leadership — Finance Manager (£5m–£15m)

A Finance Manager is triggered when the external accountant can no longer be the primary source of management information. This usually happens between £3m and £8m revenue, depending on the business: complex intercompany transactions, multiple revenue streams or significant accruals bring the need forward; a simple product business with straightforward revenue recognition and no stock can manage externally for longer.

The Finance Manager is the first qualified finance professional in most growing businesses. Their main addition is management information: prompt monthly management accounts, a cash flow forecast, variance analysis and the context management needs to decide. They usually take over bookkeeping oversight and manage any junior staff. A typical London base is £56,000–£78,000; our guide to your first Finance Manager at around £5m revenue covers the profile.

The qualification needed depends on scope. If the external accountant keeps statutory accounts and tax, a part-qualified or QBE (qualified by experience) candidate can work. If the Finance Manager is to own statutory accounts and the audit in-house, full ACA, ACCA or CIMA qualification is required. The Finance Manager recruitment page covers the profile in more detail.

One mistake to avoid: a salary that does not reflect scope. A Finance Manager who is the sole in-house finance professional — management accounts, payroll oversight, VAT, cash, the bank relationship — is working beyond what the title implies and should be paid for it; underpaying creates early churn. Where the scope includes statutory accounts, audit and controls, it is Financial Controller scope, and from around £8m revenue an FC is often the better first qualified hire.

Stage Three: Senior Finance Leadership — Financial Controller (£10m–£50m)

The Financial Controller is the pivot point in most finance functions, bringing the technical depth, team leadership and authority to turn a reporting and compliance operation into a properly controlled function that can scale.

Typical triggers: revenue above £10m–£15m and a function that has outgrown what a Finance Manager can credibly lead; a more demanding audit that needs a qualified ACA, ACCA or CIMA professional to own the statutory accounts; a team of three or more needing a genuine leader; and added complexity — multiple entities, intercompany transactions, overseas subsidiaries — that needs controller-level expertise.

In many businesses the FC is the most senior finance professional, reporting to the CEO or COO and carrying elements of planning and investor reporting that would sit with an FD in a fuller team. See the Financial Controller recruitment page and our guide to what a Financial Controller does. In London, an owner-managed business of £5m–£15m typically pays an FC £65,000–£82,000, rising to £78,000–£98,000 at £15m–£40m and £88,000–£115,000 when PE-backed; the Financial Controller salary guide has regional figures.

Where a Finance Manager is already in place, the FC manages them, sets standards, owns statutory accounts and audit, and takes overall accountability; the FM runs operational finance. This typically works up to around £30m–£50m revenue without significant external investors. As close volume grows, the next addition is often a Management Accountant — see when to hire your first Management Accountant and building a finance team around a Financial Controller.

Stage Four: Commercial Finance — Adding Specialist Capability (£20m+)

With a solid operational foundation — reliable management accounts, strong controls, a qualified FC leading the team — the business can add specialist commercial finance, most often a Finance Business Partner and an FP&A Manager or Analyst.

Finance Business Partner — embeds financial thinking in operational decisions alongside sales, marketing, operations and other leaders. The FBP uses the output of the close, rather than owning it, to provide commercial analysis and challenge. Justified once operational leaders make regular investment, pricing or strategic decisions that would benefit from dedicated financial input. See Finance Business Partner recruitment.

FP&A Manager or Analyst — owns the forward look: the three-year model, the long-range plan, scenario analysis and the modelling behind capital allocation. Most valuable with complex revenue models, significant capital needs, or PE or venture investors who expect sophisticated planning. The FP&A recruitment page covers profile and salary benchmarks.

Not every business needs both. Simple operations with complex strategic choices point to FP&A; straightforward strategy with complex operational economics points to an FBP. Decide by where financial insight would most improve decisions, not by what looks impressive on an organisation chart.

Stage Five: Strategic Finance Leadership — Finance Director or CFO (£20m+)

The Finance Director or CFO sits at the top of the function and commits the business to senior finance leadership at board or executive level. The triggers are external relationships and strategic complexity: a fundraise, PE investment, an acquisition programme, a refinancing, or growth beyond the point where the CEO can manage financial strategy personally. Revenue alone is rarely the trigger; a competent FC can often cover the role in an owner-managed business below about £50m.

The FD is an addition above the Financial Controller, not a replacement. A business expecting its FD to run the month-end close is either not ready for an FD or lacks a functioning FC. Each layer should own its responsibilities: the FC operational finance; the FD the strategic, board and investor dimension; FBP and FP&A the commercial and forward-looking support. Our guide to Finance Director versus CFO covers which title fits.

Where FD-level input is needed before revenue justifies a full-time appointment, a fractional Finance Director one or two days a week alongside a permanent FC is a cost-effective transitional structure used by many £10m–£30m businesses. Full-time FD and CFO searches typically run with our sister firm FD Capital.

The Finance Team Structure at Different Revenue Stages

Revenue Stage	Typical Finance Team	External Support Still Needed
Under £3m	Part-time bookkeeper or Accounts Assistant	External accountant for all statutory, tax and management accounts
£3m–£10m	Finance Manager (possibly with Accounts Assistant), often after a fractional FC; a Financial Controller from around £8m	External accountant for statutory accounts and tax (if FM not fully qualified)
£10m–£25m	Financial Controller + Finance Manager or Management Accountant + Accounts Assistant(s)	External tax advisers for complex matters; external audit
£25m–£50m	FC + FM or MA + FBP or FP&A + junior team; FD or fractional FD on a trigger	External audit; specialist tax counsel for transactions
£50m+	CFO/FD + FC or Group FC + FBP + FP&A + group reporting + specialist roles	External audit; M&A advisers for transactions

PE-backed businesses typically add an FD or CFO earlier, because investor reporting and covenant monitoring arrive with the investment. As a cost guide, a £10m business with an FC and one or two Accounts Assistants typically spends around £120,000–£195,000 a year all-in in London.

Moving From Outsourced to In-House Finance

Most teams move work in-house in stages: bookkeeping first, then monthly management accounts, then cash forecasting and the bank relationship, then year-end and audit preparation, and finally statutory accounts and tax — which many owner-managed businesses keep external well into the £10m–£25m band. Fractional and interim roles let you buy senior capability by the day while the permanent team is built.

Option	Typical London cost	Best used when
Fractional FC, one day a week	£29,000–£39,000 a year	Numbers are late or unreliable but senior work is light
Fractional FC, two days a week	£52,000–£68,000 a year	Bridging to a permanent FM or FC
Interim Financial Controller	£400–£650 a day	Records clean-up, systems change or cover during a search
Permanent FC for comparison	Roughly £85,000–£105,000 a year all-in	Four or more days a week of FC-level work

A practical pattern at around £5m–£10m is to engage a fractional Financial Controller to set up the close, controls and reporting, then hire a permanent Finance Manager or FC into a function that already works. Where records need significant repair first, an interim Financial Controller on a defined engagement is usually faster.

Key Systems Decisions as the Team Grows

Team structure and systems are deeply connected. A team too large for its systems spends its time on manual workarounds and reconciliation rather than analysis; a team too small for an ERP is underserved by software that needs more administration than it has capacity for.

At the bookkeeper and early Finance Manager stage, cloud accounting software — Xero, QuickBooks or FreeAgent — is appropriate and cost-effective, handling bookkeeping, VAT returns, bank feeds and straightforward reporting well. It typically becomes limiting with multiple entities, consolidated group reporting, complex revenue recognition or inventory at scale.

At the Financial Controller stage in a £15m–£50m business, a mid-market ERP — Sage 200, Microsoft Dynamics 365 Business Central, NetSuite — is often right, with proper multi-entity consolidation, more granular reporting and better audit trails. The FC hire and the implementation often run in parallel or in sequence, and an FC with experience of your chosen system can accelerate the project significantly. See our guide to migrating finance systems.

The ICAEW’s technology guidance for finance professionals gives a useful overview of assessing system requirements at different stages of scale.

Recruiting Each Role: What to Test For

Brief each search on the scope you need, not the title — see how to brief a senior finance search.

• Bookkeeper or Accounts Assistant: accuracy, your accounting platform and reliability on deadlines; a short practical test on reconciliations beats an interview.
• Finance Manager: a full set of management accounts unsupervised, a credible cash forecast, and clear explanations for non-finance managers.
• Financial Controller: audit ownership, controls design, team leadership and experience of building rather than maintaining a function. See hiring your first Financial Controller.
• FBP or FP&A: modelling skill, commercial curiosity and influence with budget holders, tested through a modelling exercise or case study.
• Finance Director or CFO: board presence, investor and lender relationships, and a record in the trigger behind the hire.

For permanent roles a shortlist typically arrives within one to two weeks of a clear brief; interim and fractional shortlists within days.

Common Mistakes When Building a Finance Function

Hiring seniority before you have data quality. An FC hired over unreliable bookkeeping spends their first six months cleaning up the books rather than building the function. Fix the data first — with better bookkeeping resource or an interim clean-up — before hiring the senior professional who builds on it.

Under-paying relative to scope. A Finance Manager carrying FC-level scope — statutory accounts, audit, full team leadership — on Finance Manager pay will often leave for a better-titled, better-paid role within twelve to eighteen months. Pay for the scope, not the title.

Not defining the reporting line clearly. An FC who reports to the COO but takes instructions from the CEO, a fractional CFO and two department heads will be ineffective however capable. Define the reporting line before the hire starts.

Hiring for the current state of the business rather than where it is going. An FC or FD hire typically stays three to five years, by which time the business will look very different. Hire the finance leader you will need at £50m, not the one you need at £20m, or you will rebuild the function in three years.

Letting the team become finance-only. The best finance functions are embedded in the operating rhythm — Finance Managers in operational reviews, FCs in commercial negotiations, FBPs alongside sales and marketing. A team producing reports nobody engages with is not delivering what the business paid for. From the first hire, expect finance to engage actively rather than wait to be asked.

Hiring an FD to fix late management accounts. If accounts are late because no one is doing the month-end journals properly, a Finance Director will not fix it; a Financial Controller or Finance Manager who owns the process will, at much lower cost. The right next hire is usually a layer lower than the CEO first expects.

Building a Finance Team: FAQs

What should my first finance hire be?

A bookkeeper or Accounts Assistant for transaction volume; a fractional FC for late or unreliable numbers with light senior work; a Finance Manager — or an FC where audit and statutory work are in scope — for daily in-house ownership.

When should I bring finance in-house?

Usually between £3m and £5m revenue, when management accounts are regularly late, the bank asks for information you cannot produce reliably, or the founder is spending significant time on finance.

Do I need a Finance Director or a Financial Controller?

Most owner-managed businesses need an FC first. An FD follows a trigger — PE investment, an acquisition, a refinancing or a board change — rather than revenue alone.

What does a small finance team cost?

Around £120,000–£195,000 a year all-in in London for a £10m business with an FC and one or two Accounts Assistants. See the true cost of a finance team hire.

Further Reading

• ICAEW: Business and Management — guidance on building and leading finance functions.
• AICPA & CIMA — research on how finance functions evolve as businesses scale.
• Companies Act 2006: Duty to Keep Accounting Records — the statutory minimum standard.
• FRC: UK Accounting Standards — the FRS 102 and FRS 105 reporting framework.
• ICAEW: Technology — guidance on finance systems as the function scales.