As businesses grow, financial management becomes more complex.
Systems and processes that support a smaller business do not always keep pace with growth. Reporting takes longer, cashflow becomes harder to manage and key decisions are often made without a complete picture of the numbers.
What worked when turnover was £500,000 may no longer be fit for purpose at £5 million.
Rosie Cooper, cloud accounting director at PM+M, explores the key warning signs that it could be time to rethink how your finance function supports your business…
1/ Your management reports are always late
If management accounts regularly arrive weeks after month-end, you may be making decisions based on outdated information. By the time issues are identified, opportunities may already have been missed.
Growing businesses need accurate, up-to-date financial information to make confident decisions.
2/ Too much knowledge sits with one person
Many businesses become heavily reliant on a single member of the finance team.
While this may not seem like an issue day-to-day, holidays, sickness or staff turnover can quickly expose gaps in knowledge and processes.
A robust finance function should not rely on one individual holding all the answers. Instead, businesses need systems, processes and support that provide continuity and resilience.
3/ You don’t have a clear picture of cashflow
Many successful businesses still encounter cashflow issues because they lack visibility over future commitments, customer payment patterns or working capital requirements.
If you’re regularly surprised by cash shortages or find yourself checking your bank balance to understand how the business is performing, it’s often a sign that stronger financial controls and forecasting are needed.
4/ Forecasting is either inaccurate or non-existent
Whether you’re planning to recruit, invest in equipment, expand into new markets or secure funding, reliable forecasting plays a critical role.
Without it, business planning becomes reactive rather than strategic. Good forecasting gives you greater confidence when making decisions about growth, investment and recruitment.
5/ Finance is focused on reporting the past rather than shaping the future
While compliance and reporting remain important, modern finance teams should contribute much more than historic financial reports.
Strong finance functions spot trends before they become problems, highlight risks early and give business owners the confidence to act. They act as a commercial partner to the business, not just a record-keeping function.
6/ You’re struggling to recruit finance talent
Experienced finance professionals are in short supply, and those with the right skills often command salaries beyond what many growing businesses have budgeted for. Recruitment is often followed by additional investment in training, technology and management support.
For many growing businesses, building a finance team in-house may not be practical or cost-effective, particularly when finance requirements are constantly changing.
7/ Leadership lacks meaningful financial insight
As businesses grow, business owners and directors need more than basic financial reporting.
They need clear answers to key questions, such as:
- Which areas of the business are most profitable?
- What impact will future investment have on cashflow?
- How are margins performing?
- What are the biggest financial risks facing the business?
If these questions are difficult to answer, it may be a sign that your finance function isn’t giving you the insight needed to make informed decisions.
What next?
Outgrowing your finance function isn’t necessarily a problem. In fact, it’s often a sign that your business is moving in the right direction.
The challenge is ensuring your financial support evolves alongside your growth ambitions.
PM+M’s Virtual Finance Office provides access to experienced finance professionals, management reporting, forecasting, strategic advice and day-to-day finance support through a flexible service that grows with your business.
If any of the challenges outlined above sound familiar, get in touch with Rosie Cooper to discuss how PM+M’s Virtual Finance Office could help support your next stage of growth.
