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 in which you make finance hires, the salary levels you set, and the boundaries you draw between roles will shape the quality of your financial management for years. Get the sequencing right and each hire builds on the last, creating a function that scales with the business. 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 written for founders, CEOs and operational leaders who are building a finance team for the first time, or who have inherited an informal finance function and need to professionalise it. It covers the logical sequence of finance hires, the triggers that prompt each one, the overlaps between roles, and the common mistakes that lead to an expensive rebuild.

Why the Sequence Matters

Most businesses build their finance function in roughly the same order, driven by the increasing complexity of what they need the function to do. The order is not arbitrary: each role in a well-structured finance function depends on the layer beneath it working reliably. A Financial Controller cannot produce clean management accounts if the underlying transaction data is unreliable. A Finance Director cannot provide useful commercial insight if the Financial Controller’s function is still firefighting basic month-end problems. An FBP cannot partner effectively with the business if the management information they are working with is late or inaccurate.

This is why the order of finance hires matters as much as the hires themselves. A common and expensive mistake is skipping a layer — hiring a Finance Director before the business has a functioning Financial Controller, or hiring a Financial Controller before it has reliable bookkeeping beneath them. The result in both cases is a senior person spending their time on work that should be handled by the layer below, which means the business is paying for seniority it is not getting.

Stage One: The Foundation — Bookkeeper or Accounts Assistant (£25m and below)

Every finance function starts with someone who processes transactions: sales invoices, purchase invoices, bank reconciliations, expense claims, payroll data entry. This is bookkeeping work and it requires attention to detail, consistency and familiarity with the accounting software the business uses — not a professional accounting qualification.

In the earliest stages, this work is often done by the founder, a general administrator, or an external bookkeeper working on a part-time or monthly basis. This arrangement works until the transaction volume, the complexity of the data, or the management’s need for reliable financial information grows beyond what it can handle. The typical trigger for the first in-house finance hire is when the external bookkeeper is producing information that is consistently late or inaccurate, when the founder is spending more than a few hours a week on finance administration, or when the business is approaching its first VAT registration or PAYE obligations.

The first hire at this stage is either a part-time or full-time bookkeeper, or an Accounts Assistant who handles transactional finance under limited supervision. AAT qualification is appropriate at this level; a fully qualified accountant is over-qualified and will leave quickly. Salary at this level in London is typically £25,000–£38,000; outside London, £22,000–£32,000.

The external accountant relationship should be maintained at this stage for year-end statutory accounts, Corporation Tax and any complex technical accounting matters. The in-house bookkeeper feeds the external accountant the data they need; the external accountant produces the statutory output and advises on technical matters. This is a cost-effective and appropriate division of labour for a business below approximately £3m–£5m revenue.

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

The trigger for a Finance Manager hire is typically when the business reaches a level of complexity or revenue where the external accountant is no longer adequate as the primary source of management information. This usually happens somewhere between £3m and £8m revenue, though it depends heavily on the nature of the business — a business with complex intercompany transactions, multiple revenue streams or significant accruals may need in-house management accounting capability earlier; a straightforward product business with simple revenue recognition and no stock may manage with external support for longer.

The Finance Manager is the first qualified finance professional in most growing businesses. Their primary addition to the function is management information: monthly management accounts produced promptly, a cash flow forecast, variance analysis and the financial context the management team needs to make decisions. They may also take over some or all of the bookkeeping oversight previously handled externally or by the founder, and will manage any junior finance staff beneath them.

The qualification requirement at Finance Manager level depends on the scope of the role. If the Finance Manager will continue to use the external accountant for statutory accounts and tax, a part-qualified or QBE (qualified by experience) candidate can be viable. If the business has grown to the point where it wants the Finance Manager to own the statutory accounts and audit process in-house, full ACA, ACCA or CIMA qualification is a requirement. The Finance Manager recruitment page covers the profile in more detail.

One mistake to avoid at this stage: hiring a Finance Manager at a salary that does not reflect the scope of the role. A Finance Manager who is effectively running the entire finance function as the sole in-house finance professional — management accounts, payroll oversight, VAT, cash management, bank relationship — is operating at a broader scope than the title typically implies and should be paid accordingly. Underpaying this hire relative to the actual scope creates early churn.

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

The Financial Controller is the pivot point in most finance functions. They bring the technical depth, the team leadership capability and the organisational authority to transform the finance function from a reporting and compliance operation into a properly controlled, scalable function that supports the business’s next phase of growth.

The triggers for a Financial Controller hire typically include: revenue exceeding £10m–£15m and the finance function growing beyond what a Finance Manager can credibly lead; the audit requirement becoming more demanding and the business needing a qualified ACA, ACCA or CIMA professional to own the statutory accounts and audit management process; the finance team growing to three or more people and needing a genuine team leader; and the business taking on additional complexity — multiple entities, intercompany transactions, overseas subsidiaries — that requires controller-level technical expertise.

In many businesses, the Financial Controller is the most senior finance professional, reporting directly to the CEO or COO. In this configuration the FC carries an expanded scope that includes elements of financial planning and investor reporting that would sit at FD level in a business with a more complete finance team. The Financial Controller recruitment page and the guide to what a Financial Controller does provide more detailed guidance on the scope of the role.

When the Financial Controller joins a business that already has a Finance Manager, the structure becomes clearer: the Finance Manager handles the operational finance work and the FC manages the Finance Manager, sets standards, owns the statutory and audit function, and takes overall accountability for the finance function. This structure typically works well up to approximately £30m–£50m revenue in a business without significant external investors.

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

Once the finance function has a solid operational foundation — reliable management accounts, strong controls, a qualified FC managing the team — the business is in a position to add specialist commercial finance capability. The two most common additions at this stage are a Finance Business Partner and an FP&A Manager or Analyst.

Finance Business Partner — embeds financial thinking in operational decision-making by working alongside sales, marketing, operations or other functional leaders. The FBP does not primarily own the month-end close; they use the output of the close to produce commercial analysis and challenge that helps the business make better decisions. Typically justified once the business has operational leaders making regular investment decisions, pricing decisions or strategic choices that would benefit from dedicated financial input. See the guide to Finance Business Partner recruitment for more on this hire.

FP&A Manager or Analyst — owns the forward-looking financial function: the three-year financial model, the long-range plan, detailed scenario analysis and the financial modelling that underpins capital allocation and strategic decisions. FP&A capability is most valuable in businesses with complex revenue models, significant capital requirements, or PE or venture investors who require sophisticated financial planning outputs. The FP&A recruitment page covers the profile and salary benchmarks for this hire.

Not every business needs both. A business with relatively simple operations but complex strategic choices might prioritise the FP&A capability. A business with straightforward strategy but complex operational economics might prioritise the Finance Business Partner. The decision should be driven by where the business most needs financial insight to improve its decision-making, not by what sounds most impressive on an organisation chart.

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

The Finance Director or CFO appointment sits at the top of the finance function hierarchy and represents the business’s commitment to senior finance leadership at the board or executive level. The triggers for this hire are typically related to external relationships and strategic complexity: a fundraising process, a PE investment, an acquisition programme, or a business that has grown beyond the point where the CEO can continue to manage the financial strategy personally.

The FD or CFO is not a replacement for the Financial Controller — they are an addition above it. A business that hires an FD and expects the FD to manage month-end close is either not ready for an FD or does not yet have a functioning FC beneath them. The finance function works best when each layer owns its own responsibilities clearly: the FC owns the operational finance function; the FD owns the strategic, board-facing and investor-facing dimension; and the FBP and FP&A functions provide commercial and forward-looking capability to support both.

For businesses that need FD-level strategic finance input before the revenue justifies a full-time appointment, a fractional Finance Director working one or two days per week alongside a permanent FC is a cost-effective transitional structure that many £10m–£30m businesses use successfully.

The Finance Team Structure at Different Revenue Stages

Key Systems Decisions as the Team Grows

Finance team structure and finance systems are deeply connected. A team that is too large for its systems will spend excessive time on manual workarounds and data reconciliation rather than analysis and decision support. A team that is too small for an ERP system will be underserved by overly complex software that requires more administration than the team has capacity for.

At the bookkeeper and early Finance Manager stage, cloud-based accounting software — Xero, QuickBooks or FreeAgent — is appropriate and cost-effective. These platforms handle basic bookkeeping, VAT returns, bank feeds and straightforward reporting well. They typically become limiting when the business has multiple entities, requires consolidated group reporting, has complex revenue recognition, or needs to manage 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 the right move. These systems provide proper multi-entity consolidation, more granular reporting and better audit trail management than cloud bookkeeping tools. The FC hire and the systems implementation often happen in parallel or in sequence, and looking for an FC with experience of the specific system you are implementing can accelerate the project significantly.

The ICAEW’s technology guidance for finance professionals provides a useful overview of how to assess finance system requirements at different stages of business scale.

Common Mistakes When Building a Finance Function

Hiring seniority before you have data quality. A Financial Controller hired into a business where the underlying bookkeeping is unreliable will spend their first six months cleaning up the books rather than building the function you need. Fix the data quality problem first — either by investing in the bookkeeping resource or by bringing in an interim to clean up the records — before hiring the senior professional who will build on top of it.

Under-paying relative to scope. A Finance Manager who is carrying FC-level scope — statutory accounts ownership, audit management, full team leadership — but paid at Finance Manager rates will leave for a better-titled and better-paid role within twelve to eighteen months. Pay for the scope of the role, not the title you want to give it.

Not defining the reporting line clearly. In a growing business where the finance function is being built alongside the operational team, the reporting line for finance hires is sometimes unclear. A Financial Controller who is technically reporting to the COO but is being given instructions by the CEO, the CFO on a fractional basis and two department heads simultaneously will be ineffective regardless of their capability. Define the reporting line before the hire starts, not after.

Hiring for the current state of the business rather than where it is going. A finance team hire at FC or FD level will typically be in place for three to five years. The business will look substantially different at the end of that period. Hire for the finance leader you will need at £50m, not the one you need at £20m, and you will not have to rebuild the function in three years because the person you hired cannot operate at the next level.

Letting the team become finance-only. The best finance functions in growing businesses are deeply embedded in the operational rhythm of the business — Finance Managers attending operational reviews, Financial Controllers sitting in on commercial negotiations, FBPs working alongside sales and marketing. A finance team that is isolated in a back office producing reports that no one engages with is not delivering the value the business has paid for. From the first hire onwards, build a culture where finance professionals are expected to engage actively with the rest of the business rather than waiting to be asked.

Further Reading

• ICAEW: Finance Function Leadership — guidance on building and leading effective finance functions at different stages of organisational growth.
• CIMA: Finance Transformation — research on how finance functions evolve as businesses scale and what drives effective transformation.
• Companies Act 2006: Duty to Keep Accounting Records — the statutory requirement that defines the minimum standard your finance function must meet.
• FRC: UK and Ireland Accounting Standards — the reporting framework (FRS 102, FRS 105) your finance function will operate within.
• ICAEW: Technology Guidance for Finance — authoritative guidance on finance systems selection as the function scales.