How scaling and PE-backed businesses can build a finance function that supports growth, strengthens decision-making and supports the firms trajectory.
Growth is exciting. Revenue is increasing, headcount is growing, new markets are opening up and, particularly in PE-backed businesses, expectations around performance and reporting are rising.
But there is one area that can quickly become a bottleneck if it doesn’t evolve at the same pace as the rest of the business: finance.
At Sowena, we work closely with growing businesses, founders, MDs and PE houses so we know what a good finance team should look like. One thing we see repeatedly is that finance functions rarely become a problem overnight. More often, the warning signs are there for months, sometimes years, before the business has the right structure, systems or leadership in place to support its next stage of growth.
The mistake isn’t necessarily hiring the wrong person.
More often than not we only see firms taking action to build their finance function once their current one is stretched too thin or even at capacity.
Here are five of the most common mistakes we see and what businesses can do differently.
Hiring for today’s finance function instead of tomorrow’s growth
One of the most common mistakes growing businesses make is hiring based on the problems they have today rather than the complexity they expect to face in 12–24 months.
A business may need someone to improve month-end reporting, manage cash flow or take pressure off the founder. So the obvious solution is to hire someone who can solve those immediate problems.
But what happens when the business doubles in size?
The finance function suddenly needs to provide more sophisticated forecasting, commercial analysis, board reporting, investor information and strategic insight. The person hired 18 months earlier may be excellent at their current role but simply doesn’t have the experience required for the next stage.
This is particularly important in PE-backed businesses, where the pace of growth and expectations around reporting can increase significantly following investment.
The question shouldn’t simply be: “Who can solve our finance problems today?”
It should be:
“What will our finance function need to look like when we reach our next growth milestone — and who do we need to build towards that?”
Good finance recruitment is therefore about more than filling a vacancy. It’s about understanding the trajectory of the business and building capability ahead of demand.
Waiting too long to hire a Finance Director or CFO
When should a growing business hire a CFO or Finance Director?
There is no single revenue figure or headcount number that tells a business it is time to hire a CFO or Finance Director.
The trigger is usually complexity.
As a business grows, the finance leader’s role changes. Initially, finance may be primarily focused on accurate accounts, cash flow and compliance. Over time, the leadership team needs much more.
They need someone who can answer questions such as:
- Where are our biggest opportunities for profitable growth?
- What does our cash position look like six or twelve months from now?
- Which areas of the business are performing and which aren’t?
- Can our current infrastructure support further growth?
- What does the business need to do to prepare for an acquisition, refinancing or exit?
- Are we getting the right return on our investment?
That’s when finance leadership becomes a strategic role rather than simply a reporting function.
We often see founders hold onto financial responsibility for longer than they should, because the business has managed perfectly well up to that point.
But the question isn’t whether the existing finance structure works.
It’s whether it is good enough for where the business is going next.
Bringing in senior finance leadership before the business reaches its next level of complexity can give the wider leadership team significantly greater visibility and control.
Underestimating the importance of finance systems and processes during growth
How to scale finance systems and processes for business growth
Technology rarely feels urgent when a business is small.
Spreadsheets work. Manual processes are manageable. A finance team can pull together information from different systems when necessary.
Then the business grows.
Suddenly there are more customers, more employees, more transactions, multiple entities, increased reporting requirements and significantly more data to manage.
What worked at £10m turnover may become a serious constraint at £30m.
We regularly see growing finance teams spending too much time producing numbers rather than
interpreting them because processes and systems haven’t evolved with the business.
The result is slower reporting, inconsistent data, greater risk and less time for commercial decision-making.
Scaling a finance function therefore isn’t just about adding people. It’s also about asking whether the infrastructure those people are working within is fit for purpose.
The strongest finance leaders don’t simply inherit inefficient processes and work harder. They identify where automation, better systems and clearer processes can give the team more capacity to focus on higher-value activity.
Getting the finance team structure wrong as the business scales
How to structure a finance team for a growing business
There isn’t one perfect finance team structure for every growing business.
But there is a common mistake: adding people without considering how the overall function should evolve.
A finance team might start with a Finance Manager and several transactional roles. As the business grows, it may need dedicated expertise across financial control, FP&A, commercial finance and finance leadership.
If those responsibilities aren’t clearly defined, senior finance professionals can end up spending their time on tasks that could be delegated, while strategic priorities are left untouched.
A scalable finance function should be designed around the needs of the business.
That might mean strengthening:
- Financial control and reporting
- FP&A and forecasting
- Commercial finance
- Management information
- Cash and working capital
- Finance systems and transformation
- Senior finance leadership
The right structure also needs to reflect the business’s growth plans.
A company preparing for acquisition, international expansion or an exit will have very different finance requirements from a business focused purely on organic growth.
The objective isn’t to build the biggest finance team. It’s to build the right finance team.
Hiring finance professionals based purely on technical skills
What to look for when hiring senior finance leaders
Technical capability is essential.
But at senior level, it isn’t enough.
We’ve seen businesses place too much emphasis on whether someone has the right qualification, sector experience or technical accounting background, without considering how that individual will operate within the wider leadership team.
A senior finance leader in a growing or PE-backed business needs to be able to do much more than produce accurate numbers.
They need to be able to:
- Challenge the leadership team constructively
- Communicate complex financial information clearly
- Work comfortably with investors and boards
- Translate financial data into commercial decisions
- Operate effectively through periods of change
- Build and develop a high-performing finance team
- Balance strategic thinking with operational detail
This is where recruitment becomes particularly important.
The best candidate on paper isn’t necessarily the best candidate for the business.
Context matters.
Someone who has thrived in a highly structured FTSE environment may not necessarily thrive in a fast-growing, entrepreneurial business where they need to build processes from scratch.
Likewise, someone who has successfully led finance in a £20m business may not have the experience required to navigate a £100m PE-backed growth journey.
Understanding that difference is a critical part of getting senior finance recruitment right.
Building a finance function that can scale with your business
What does a scalable finance function look like?
A scalable finance function should do more than keep the books accurate.
It should give the leadership team confidence in the numbers, visibility over performance and the insight needed to make better decisions.
It should also be capable of evolving.
As the business grows, the finance function should move from being primarily transactional, towards becoming increasingly analytical, commercial and strategic.
That doesn’t happen by accident.
It requires deliberate decisions about people, structure, technology and leadership, ideally before growth exposes the weaknesses in the existing model.
From our experience supporting growing and PE-backed businesses, the strongest finance functions are rarely the ones that simply react fastest.
They’re the ones that anticipate what the business will need next.
The cost of getting finance recruitment wrong
A finance hire is never just a finance hire.
The wrong appointment can mean months of lost time, disruption to the existing team, delayed projects and, ultimately, a finance function that still isn’t equipped for the next stage of growth.
Conversely, getting the right person in at the right time can transform the way a business operates.
They can build the infrastructure the business needs, develop the team around them, improve visibility and give the wider leadership team the confidence to make decisions based on better information.
That’s why we believe finance recruitment should start with the business strategy, not the job description.
Before deciding who to hire, businesses should be asking:
Where are we now? Where are we going? And what does our finance function need to look like when we get there?
For growing and PE-backed businesses, answering those questions early can make the difference between a finance function that simply keeps up and one that actively enables growth.
At Sowena, we work with growing businesses and PE-backed organisations to identify and attract the finance leadership and talent they need for their next stage of growth.