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.[2]
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.[3]
| 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.[4] 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 here.
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.[5]
I go deeper on the outsourced CFO model, including what it costs and how to choose between a solo operator and a firm here.
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
- Story Recruitment guidance: the classic startup model pairs a Financial Controller handling higher-end work with an outsourced bookkeeper for accounts payable, reconciliations and payroll.
- Story Recruitment guidance: the Financial Controller plus outsourced bookkeeper structure works best for companies of roughly 10 to 50 people.
- Story Recruitment guidance: the Controller handles strategic work and oversight while the outsourced bookkeeper manages transactional tasks, avoiding hiring several full-time finance people too early.
- Tom Hunter: if you are financially savvy and comfortable with AI, you can often rely less on a fractional CFO at seed stage by engaging a fractional bookkeeper plus tooling.
- Story Recruitment guidance: for businesses reaching $20m+ ARR a full-time CFO becomes effectively mandatory, as fractional arrangements typically break down at this stage.