Outsource the transactional layer first: accounts payable, reconciliations and payroll. The structure that works for Australian startups of roughly ten to fifty people pairs an in-house financial controller with an outsourced bookkeeper. Around $20m ARR a full-time CFO becomes effectively mandatory.
Outsource the bottom of the stack first
The structure that works in most Australian startups pairs a financial controller handling the higher-end work with an outsourced bookkeeper covering accounts payable, reconciliations and payroll.[1] That model fits businesses of roughly ten to fifty people .
The logic is where judgement is needed. The controller handles strategic work and oversight while the outsourced bookkeeper manages transactional processing, which keeps the expensive person off low-value work and stops you hiring several full-time finance people too early. The same split holds as teams grow. One client I work with runs a CFO, an FC, a management accountant and a junior accountant onshore, with an offshore team in the Philippines handling management accounting, accounts payable and accounts receivable, plus a payroll team of approximately nine.[4] The offshore and outsourced layer carries the volume; the onshore layer carries the judgement. For a simple software business that arrangement can hold for a long time.[5]
| Layer | Outsource it, or own it | |
|---|---|---|
| Transactional | AP, AR, reconciliations, payroll | Outsource it. Handled well and cheaply by a bookkeeper or accounting firm, and it keeps your senior hire off low-value work. |
| Close and reporting | Month-end, compliance, clean numbers | In-house once past roughly ten people. This is where a controller earns their salary. |
| Judgement | Model, capital, board | Fractional works as a bridge for 18 to 24 months, then becomes a full-time hire as you approach $20m ARR. |
What good outsourcing looks like earlier still
At seed stage you can often go further. If you are financially savvy and comfortable with AI, you can rely less on a fractional CFO by engaging a fractional bookkeeper plus tooling for runway tracking, actual versus forecast and lightweight commercial analysis.[2] That defers the senior spend without leaving you blind.
I set out the seed-stage options side by side, including what each one actually buys you.
Where outsourcing stops working
An outsourced provider is not in the room when decisions are made, not close enough to notice a problem forming, and not accountable the way an employee is. For reporting and compliance that trade is fine. For decisions being made as you grow it gets expensive.
There is a scale ceiling too. For businesses reaching $20m ARR a full-time CFO becomes effectively mandatory, because fractional and outsourced arrangements typically break down at that point.[3]
I go deeper on the outsourced CFO model, including what it costs and how to choose between a solo operator and a firm.
Common questions
What should a startup outsource in finance?
The transactional layer first: accounts payable, reconciliations and payroll. The structure that works for businesses of roughly ten to fifty people pairs an in-house financial controller handling higher-end work with an outsourced bookkeeper covering the processing. That keeps the expensive person on the expensive work and avoids hiring several full-time finance people too early.
Can a seed-stage startup outsource everything?
Close to it, if the founder is financially literate and comfortable with AI tooling. A fractional bookkeeper plus tooling can cover runway tracking, actual versus forecast and lightweight commercial analysis, which defers the fractional CFO spend without leaving you blind. That works until the decisions get harder than the reporting.
When does outsourcing finance stop working?
When decisions need someone in the room. An outsourced provider is not present when choices are made, not close enough to notice a problem forming, and not accountable the way an employee is. There is also a scale ceiling: around $20m ARR a full-time CFO becomes effectively mandatory because fractional and outsourced arrangements break down at that point.
References
- Where I would not rush the permanent hire, talking on Celia's Corner: if it is a SaaS business with one jurisdiction, one location and one product, it probably does not need a proper CFO until Series B, because a Financial Controller internally plus an external fractional layer can carry it.
- Our guidance at Story Recruitment: the classic startup model pairs a Financial Controller handling higher-end work with an outsourced bookkeeper for accounts payable, reconciliations and payroll.
- If you are financially savvy and comfortable with AI, in my experience you can often rely less on a fractional CFO at seed stage by engaging a fractional bookkeeper plus tooling.
- Our guidance at Story Recruitment: for businesses reaching $20m+ ARR a full-time CFO becomes effectively mandatory, as fractional arrangements typically break down at this stage.
- From my client calls: one client's finance team comprises a CFO, FC, a newly created management accountant role and a junior accountant onshore, an offshore team in the Philippines handling management accounting, AP and AR, and a payroll team of approximately nine people.