The Series A Finance Ops Timing Problem: When to Build vs. When to Outsource

# The Series A Finance Ops Timing Problem: When to Build vs. When to Outsource

You just closed Series A. Congratulations. You have capital, momentum, and a whole new set of problems.

One of them is sitting in your inbox right now: the finance operations decision that will either unlock scaling or create the bottleneck that kills your growth.

Should you hire a Controller internally? Should you work with a fractional CFO? Should you build custom systems? Should you buy enterprise software? Should you outsource accounting?

Every founder we work with faces this question, and almost every founder answers it wrong—not because they lack judgment, but because they're making the decision without understanding the **timing triggers** that actually matter.

This playbook is about the Series A finance ops decision framework that avoids both the common trap of premature overbuilding and the equally damaging trap of under-investing in operational capacity.

## The Series A Finance Ops Reality: You Have a 6-Month Window

Here's what we've learned in our work with Series A startups: there's a specific window—roughly 6 months post-close—where the decisions you make about financial operations will either set you up for Series B or create technical debt that haunts your company through growth.

Why 6 months?

That's approximately how long your Series A capital gives you to:
- Establish repeatable financial reporting
- Build visibility into unit economics and profitability
- Create the infrastructure investors will scrutinize at Series B
- Scale your finance team without chaos

Miss this window, and you're making Series B decisions without clean financials. You're hiring finance people to clean up years of spreadsheet sprawl. You're explaining away missing data and inconsistent metrics.

Worse, you're burning runway on reactive hiring instead of proactive infrastructure.

## The Build-vs-Outsource Decision: What Actually Matters

This isn't about philosophy. It's not about whether "real companies" have in-house finance teams. It's about **operational readiness** and **capital efficiency**.

We've seen both paths work. We've also seen both paths fail spectacularly. The difference isn't the choice itself—it's whether the choice is timed correctly and structured to your actual operational stage.

### The Case for Building In-House (And When It Actually Makes Sense)

Hiring a Controller or Finance Manager internally works when:

**1. Your financial operations are already systematized**

If you're bringing someone in to build systems from scratch, you've already lost. The best in-house hires inherit working processes. They optimize and scale them. They don't invent them.

We worked with a Series A SaaS company that hired a Controller before establishing a monthly close process. That Controller spent 4 months building spreadsheets instead of managing people. By month 5, they'd burned $80K in salary and still didn't have clean financial statements. The company eventually hired a fractional CFO to establish the processes the Controller then managed—$120K of unnecessary spend.

**2. You have consistent, repeatable transactions**

If your business model creates predictable financial flows (recurring SaaS revenue, consistent unit economics, stable payroll), internal finance staff can manage and optimize them effectively.

But if you're still experimenting with revenue models, customer acquisition channels, or pricing—if your business fundamentals are volatile—an internal hire will spend most of their time explaining variance instead of creating strategy.

**3. Your revenue justifies the cost**

A full-time Controller or Finance Manager costs $80K-$150K all-in (salary + benefits + software + tools). You need revenue that can absorb this overhead and still fund growth.

Our rule: If your ARR is under $2-3M, that's 3-5% of revenue going to one person. That's not always wrong, but it needs intentional justification.

**4. You have specific compliance or audit requirements**

Some industries—fintech, healthcare, highly regulated verticals—benefit from having dedicated internal resources who live in your compliance ecosystem. But this is the exception, not the rule.

### The Case for Outsourcing (And When It Becomes Necessary)

Working with a fractional CFO or outsourced accounting partner works when:

**1. You need to establish systems before hiring**

This is the most common scenario we see at Series A. You need someone to:
- Design your chart of accounts
- Establish your close process
- Build your financial reporting framework
- Create your metrics and KPI structure

Then—and this is critical—you document what they built, and you hire someone to run it.

A fractional engagement for 6-12 months costs $3K-$8K/month. A full-time Controller from day one costs $7K-$12K/month (salary + burden). If you're using that fractional period to establish systems before hiring internally, you're actually saving money *and* reducing risk.

**2. You need specialized expertise you don't have**

Fractional CFOs exist because not every Series A company needs a full-time CFO. But every Series A company needs:
- Someone who understands SaaS unit economics
- Someone who can build a financial model that passes investor scrutiny
- Someone who understands Series B financing dynamics
- Someone who can manage multiple simultaneous financial processes

Your first hire might not have all these skills. A fractional partner can fill the gaps.

**3. Your financial complexity is increasing faster than headcount**

You're taking on customers with different contract structures. You're running multiple product lines. You're expanding into new geographies with different tax implications. You're managing investor relations and cap table complexity.

One internal finance person gets underwater fast. A fractional partner scales up their involvement to match your complexity.

**4. You're not ready to commit to a full-time salary**

This is honest and practical. If your Series A was tight, if you raised $1.5M instead of $3M, if your runway is measured in months not years—outsourcing lets you access expertise without fixed overhead.

## The Hybrid Model: The Approach We See Work Best

Here's the reality: the best Series A companies don't choose "build" or "outsource." They choose **both**, sequenced correctly.

The pattern we see work:

**Months 1-3 (Post-Series A): Fractional CFO establishes infrastructure**

- Design financial systems and processes
- Establish monthly close, reporting, and metrics
- Build the financial model and investor narrative
- Set up accounting software and integrations
- Create board reporting and cash flow visibility

**Months 3-6: Hire a Controller or Finance Manager**

- Bring someone in to run the processes that were designed
- Their job is execution and optimization, not invention
- The fractional CFO transitions to advisory and strategic work

**Months 6+: Determine ongoing structure**

- If you have $3M+ ARR and stable unit economics: the Controller can run it, fractional CFO steps back to quarterly advisory
- If you have $1-2M ARR or volatile unit economics: Controller handles transactions, fractional CFO stays involved in strategy and planning
- If you're in hypergrowth: both exist, fractional CFO focuses on strategy and financing, Controller manages operations

This model costs more upfront but avoids the two most expensive mistakes we see:

1. **Hiring an internal finance person too early**, before systems exist, wasting their skills on firefighting
2. **Trying to do everything with just a fractional partner**, creating a knowledge gap when you're ready to scale

## The Hidden Costs That Break the Budget

When evaluating build vs. outsource, founders usually compare salary to fractional cost. That's incomplete.

**If you build in-house, budget for:**

- Salary + benefits: $80K-$150K
- Accounting software (Wave, Quickbooks, Netsuite): $100-$500/month
- Financial modeling and analytics tools: $100-$300/month
- Tax and advisory (CPAs, lawyers): $5K-$15K annually
- Recruiting and training: $10K-$20K
- **Your time as CEO training them and catching mistakes**: Massive hidden cost

**If you outsource, budget for:**

- Fractional CFO or outsourced accounting: $3K-$15K/month depending on scope
- You might reduce some accounting software costs (partner handles it)
- You're buying someone else's expertise and covering their bench time

The gap isn't always as large as it seems. And the outsourced model gives you optionality: you can scale up and down as needed.

## The Finance Ops Readiness Checklist for Series A

Before deciding on build vs. outsource, honestly assess whether your finance operations are ready for either:

**Operational Readiness (Prerequisite for Any Hire):**

- [ ] Monthly financial close completes within 15 days
- [ ] Chart of accounts is documented and logical
- [ ] All customer contracts are in a single source of truth
- [ ] Payroll is on a consistent, documented process
- [ ] Your accounting software is configured (not just defaulted)
- [ ] You have 12+ months of clean historical financials

**If any of these are unchecked, hire fractional support first.**

## Avoiding the Transition Trap

One of the most common mistakes we see: hiring an internal finance person without transferring knowledge from whoever was handling it before (usually the founder).

The new hire spends 3 months figuring out what the founder *thought* was happening but isn't documented. Decisions get re-made. Systems get rebuilt. By month 6, they're either effective but burned out, or ineffective and you're frustrated.

If you're transitioning from fractional to in-house, document everything: processes, decisions, metrics, assumptions, problem areas.

If you're transitioning from founder-led to any dedicated resource, same rule applies.

The transfer isn't a onboarding problem. It's an operational documentation problem.

## The Series A Financial Operations Decision Framework

Use this framework to decide:

**Start with fractional support if:**
- You don't have clean historical financials
- You haven't established a monthly close process
- Your financial systems are undocumented
- You're unsure what metrics matter for your business model
- Your Series A runway is tight

**Go straight to internal hire if:**
- Your financial operations are already systematized
- You have consistent monthly revenue and clear unit economics
- Your ARR exceeds $3M
- You have regulatory requirements that need dedicated internal resources

**Use a hybrid model if:**
- You want to build systems before hiring (most Series A companies)
- You want strategic financial leadership alongside operational execution
- Your business model is complex or changing

## What Investors Actually Care About

When Series B investors evaluate your Series A, they don't care whether your Controller is internal or fractional.

They care about:

- **Clean financials**: Monthly statements that reconcile, with consistent accounting
- **Clear metrics**: Unit economics, CAC, LTV, payback period—whatever matters for your model
- **Accurate forecasts**: Your 12-month projection should be close to reality (within 10-15%)
- **Transparent assumptions**: Investors want to understand how you calculated everything
- **Documented processes**: They want evidence that numbers aren't dependent on one person

You achieve these through good systems, not through hiring decisions. The person running those systems—internal or fractional—matters less than the systems themselves.

## The Action Plan for the Next 30 Days

If you're reading this as a freshly Series A founder:

**Week 1: Audit your current state**

Honestly answer: Can your current finance person (whether that's you, a bookkeeper, or a part-time CFO) deliver clean monthly financials within 15 days? If no, you have a systems problem that precedes any hiring decision.

**Week 2: Define what "good" looks like**

Work with your board or a trusted advisor to define:
- What financial reporting do you need by month 3?
- What metrics must you own cold by month 6?
- What's required before Series B?

**Week 3: Map the gap**

Between current state and your Series B target, what's missing? Systems? Expertise? Headcount? Time?

**Week 4: Decide on your first 90 days**

Don't make a 24-month hiring plan. Make a 90-day operations plan. What must be true by day 90? Then decide who builds it.

## Final Thought: The Decision Isn't Binary

The build-vs-outsource question feels like a binary choice, but it's not. It's a **sequencing question**.

Most of our most successful Series A clients do both, in the right order: fractional expertise to build systems, then internal execution to run them.

The mistake isn't choosing one or the other. It's choosing without understanding the timing, the readiness, and the actual operational stage of your company.

You have a 6-month window post-Series A to get this right. Use it wisely.

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**If you're unsure whether your Series A financial operations are set up for scaling, [Inflection CFO offers a free financial operations audit](/blog/the-series-a-finance-ops-debt-problem-why-youre-inheriting-tomorrows-crisis/) specifically for founders navigating this decision. We'll assess your current systems, identify gaps, and outline the right path for your stage. [Schedule a call with one of our advisors](https://inflectioncfo.com/contact) to discuss your situation.**