TL;DR
- Hire a finance partner when you hit £250k-£500k revenue and spreadsheets become a liability
- Warning signs: 4+ hours weekly on financial admin, can't answer client profitability in 5 minutes
- Investment: £500-£1,500/month for FD services or £200-£600/month for enhanced accounting
- Most agencies see ROI within 6 months through better cash collection and tax savings
💡Quick reference summary. Continue reading for comprehensive analysis and context.
Most agency founders start by managing their own finances. A spreadsheet here, a QuickBooks subscription there, and maybe an accountant who files your tax return once a year. But at some point, that stops working. The question is: when?
Quick Guide: When Do You Need Finance Help?
The DIY Phase (£0-£250k Revenue)
In the early days, doing your own bookkeeping makes sense. You're lean, you're learning, and you can't justify the cost of outsourcing. But even at this stage, you should:
DIY Finance Essentials
The Tipping Point (£250k-£500k Revenue)
This is where most agencies start to struggle. You're growing, but your financial systems haven't kept pace. Here are the signs it's time to bring in help:
| Warning Sign | What It Means | The Cost |
|---|---|---|
| Hours on bookkeeping | Time spent on admin, not clients | Lost billable hours worth £1000s |
| Unknown profitability | Can't tell which projects make money | Accepting loss-making work |
| Cash flow surprises | Caught off guard by tax or shortages | Stress, late fees, missed opportunities |
| Decisions without data | Hiring/investing based on gut feel | Bad hires, wasted investment |
| Reactive tax planning | Only think about tax at year-end | Paying more tax than necessary |
What a Finance Partner Actually Does
A good finance partner is a strategic advisor who helps you:
Monthly management accounts that actually make sense. Know your position at a glance.
Cash flow forecasts and budgets that guide decision-making. No more surprises.
Identify which services, clients, or projects are most profitable. Double down on winners.
Proactive planning to minimize your tax bill legally. Keep more of what you earn.
The Growth Phase (£500k+ Revenue)
Once you're past £500k in revenue, a finance partner isn't optional, it's essential. At this stage, you need:
£500k+ Finance Requirements
In-House vs. Outsourced
Should you hire a full-time finance person or outsource? Here's the reality:
| Factor | In-House Finance Manager | Outsourced Finance Partner |
|---|---|---|
| Best for | £1m+ revenue agencies | £250k-£1m agencies |
| Annual Cost | £40-60k+ (salary + NI + benefits) | £6-15k typical |
| Expertise Level | One person's experience | Senior team with multiple clients |
| Flexibility | Fixed commitment | Scale up/down as needed |
Is It Time? Quick Checklist
If you tick 3+ of these, it's time to bring in finance support:
The Bottom Line
If you're spending more than a few hours a month on finances, or if you're making big decisions without clear financial data, it's time to bring in a finance partner. The cost is an investment that pays for itself in better decisions, improved profitability, and peace of mind.
Once you've brought in finance support, you'll want to understand which financial metrics to track monthly and how to implement a simple forecasting framework that actually works. These tools help you avoid the most common cash flow mistake agencies make.
Found this helpful? Share it: