Most construction businesses start with the owner doing all of it. You quote the work, run the jobs, manage the team, chase the money, and do the books at night. That works while the business is small enough to hold in your head. As it grows, the number of things that have to be done properly grows with it, and finance is usually one of the first functions where the owner’s time and expertise run out. Doing your own books can only take a business so far.
Finance tends to be first because the cost of getting it wrong compounds. A missed piece of job costing does not stay a small problem. It becomes the reason you cannot tell, twelve months later, which jobs actually made money. So the real question is not whether you bring in finance help. It is when you bring it in, and how.
The finance function grows in a fairly predictable sequence, and each role solves a problem the one before it cannot.
Knowing which role you need next is the first half of the decision. The harder half is how you fill it.
Every one of these roles can be built inside the business or brought in from outside, and the trade-off is broadly the same at each level.
Insourcing means hiring an employee. The advantage is that an employee is yours to develop. You can shape the role around the business over time and build someone who knows your jobs, your systems, and your people. The cost sits on two sides. You have to find someone good who genuinely understands construction, and you have to pay an executive-level salary for the senior roles. An experienced CFO commands around $300,000. For a construction business turning between $5M and $20M, carrying that salary full-time is rarely justifiable.
Outsourcing changes what the same capability costs you. With a specialist firm you get the expertise without carrying a full-time wage for it. A firm that works only with construction businesses also brings something a single hire cannot: it sees across a whole set of businesses, so it can show you where the market actually sits on things like margins, and what good looks like in a function you may not have run before. That last point matters more than it first appears. Outsourcing part of the finance function is often the cleanest way to put good processes in place and see what good looks like before you decide to build it in-house.
The logic plays out role by role. Bookkeeping is a sensible place to start. Once the business has grown past the owner doing the books, a specialist construction bookkeeper understands how job costing works and how to connect the software so data flows correctly from one system to the next. At a certain scale you may decide to bring bookkeeping in-house, and by then you will know exactly what the role needs to do, because you have seen it done well. The same reasoning applies further up. A fractional financial controller or CFO gives a $5M to $20M business genuine commercial input without a $300,000 salary. Past around $50M the case for an in-house CFO becomes much stronger, and by that point the fractional arrangement has usually established the standard the internal hire steps into.
The one decision you cannot avoid is an honest read of where the business sits in this journey. Look at the finance function you have now, name the gaps in knowledge and capability deliberately rather than waiting for a bad quarter to expose them, and put a plan in place. The plan should support not just where the business is today, but where its growth will take it over the next twelve to twenty-four months. The finance function that suits a business at $8M is not the one it will need at $20M, and the businesses that manage that transition well are the ones that planned for it.
This is the kind of decision Xact works through with construction business owners regularly, from the first bookkeeper to a full finance team. If you want to work out where your finance function sits now and what to build next, we can do that with you.
