A founder said something interesting to me during a review meeting last week.
His business has just crossed ₹50 cr in turnover this year.
Half-century is a mental milestone for most people. It was for him too.
“Vijay, it might be time to hire a CFO.”
He beamed with happiness, expecting me to congratulate him for his choice.
But playing the devil’s advocate-cum- party killer (as I often have to be), I asked him a simple question.
“Before hiring one, were you already making CFO decisions?”
He paused. Then smiled.
That smile told me he understood what I was trying to say.
Because the reality is, most growing businesses already are.
Every week, founders take decisions like:
Should we reinvest profits or take dividends
Are certain products quietly eroding margins
Do we have enough working capital for the next six months
Can we afford to open another branch right now
These are not accounting decisions.
They are capital allocation decisions.
They are CFO decisions.
And they directly shape the financial trajectory of the business.
The Invisible Gap in Growing Businesses
In most SMEs, financial responsibilities evolve without clear structure.
The accounts team handles bookkeeping and compliance.
The CA ensures tax and audit requirements are met.
The founder drives strategy.
But between compliance and strategy, a critical layer is often missing.
Structured financial oversight.
This gap does not show up immediately.
Revenue grows. Orders increase. Everything looks fine on the surface.
But over time, the cracks start appearing:
Delayed visibility into profitability
Poor capital allocation
Cash flow stress despite rising sales
I once worked with a distribution business doing around ₹35 crore in revenue.
The founder believed his highest-selling product was his most successful.
When we broke down the numbers properly, the truth was the opposite.
After factoring in credit cycles, logistics costs and discount structures, that product had the lowest margin in the entire portfolio.
For two years, the company had been scaling the segment that was weakening its profitability.
This is exactly what happens when CFO thinking is missing.
Finance Is Not Compliance
Many founders still see finance as compliance.
GST filings. Audits. Tax returns.
But real finance is a decision-making system.
It answers questions like:
Which products actually create value
Which clients are locking up your working capital
How much growth your business can realistically fund
Without these answers, businesses often grow faster than their financial discipline.
And that is where problems begin.
A Practical Approach for Growing Companies
Hiring a full-time CFO is not always the right move.
It is expensive.
And in many cases, the role is not yet fully utilized.
What growing businesses actually need is not a designation.
They need financial clarity.
This is where a Virtual CFO approach becomes effective.
In the initial phase, the focus is simple and practical:
Reliable financial reporting
Clear visibility on unit economics
Structured cash flow tracking
Stronger internal controls
Decision frameworks for the founder
Once these are in place, something changes.
Founders stop guessing.
They start deciding with clarity.
Not just based on instinct, but on numbers that actually reflect reality.
The Real Lesson
Hiring a CFO is not the milestone.
Building CFO thinking into the business is.
Because growth is not just about increasing revenue.
It is about allocating capital wisely, managing risk intelligently, and understanding the financial impact of every major decision.
And sometimes, a few sharp financial insights can completely change the direction of a business.
I will leave you with one final thought as a (professional) party-killer-
If your numbers do not guide your business decisions, you do not have a finance function… its just a glorified compliance team… :)
As always,
To all those with a mission in life,
VijayBhava!
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