Published: April 2026
There is a gap in the advice available to Australian business owners. Plenty of content explains what a startup needs (a bookkeeper and a tax agent). Plenty explains what a $20 million business needs (a finance team with a CFO). But almost nothing explains what the finance function should look like at $5 million, which is precisely where most growing SMEs sit when they realise their current setup is not working.
At $5 million, you have outgrown a standalone bookkeeper. You probably have 15 to 30 employees, multiple revenue streams, and enough complexity that decisions cannot be made on gut feel alone. But you almost certainly cannot afford (and do not need) a full-time CFO at $200,000 to $300,000 per year.
This article maps out exactly what the finance function should look like at this stage: the roles, the tools, the reporting cadence, the deliverables, and the realistic cost. No theory. Just the practical blueprint.
At $5 million in revenue, your finance function needs three distinct layers operating simultaneously. Most businesses at this stage have one layer (compliance) working adequately and the other two either missing entirely or being done poorly by people whose primary job is something else.
Layer 1: Daily operations. This is your bookkeeping, bank reconciliation, accounts payable, accounts receivable, invoicing, and payroll. It needs to happen reliably, every week, without the business owner thinking about it. At $5 million with 20 employees, you are processing roughly 300 to 500 bank transactions per month, running fortnightly payroll for 20 staff, managing 30 to 80 supplier invoices, and sending 40 to 100 customer invoices. This volume demands a dedicated resource spending 15 to 25 hours per week on operational finance.
Layer 2: Monthly reporting and visibility. This is your profit and loss report, cash flow summary, balance sheet review, aged receivables and payables, and variance analysis against budget. These deliverables need to land within 10 business days of month-end, every month, without exception. At $5 million, the monthly reporting should also include basic departmental or service-line breakdowns so you can see which parts of the business are making money and which are not. This layer requires someone who understands management accounting, not just data entry.
Layer 3: Periodic analysis and planning. This includes quarterly cash flow forecasting, annual budget preparation, pricing reviews, customer or job profitability analysis, and scenario modelling for major decisions (hiring, leasing, capital expenditure). This is where senior-level thinking adds value, but it does not require a full-time person. At $5 million, 4 to 8 hours per month of senior analytical work is sufficient.
For more on how these layers evolve as you grow, see what changes between $1M, $3M, and $10M revenue.
There are three realistic models for staffing the finance function at $5 million. Each has trade-offs.
Model 1: In-house bookkeeper plus external accountant. This is the most common setup and usually the weakest. The bookkeeper handles Layer 1 (daily operations). The external accountant reviews the books annually for tax compliance. Nobody handles Layers 2 or 3. Monthly reporting either does not happen, happens inconsistently, or is produced by the business owner using Xero's default reports (which are not management accounts).
Cost: $65,000 to $85,000 salary plus $20,000 to $30,000 in on-costs for the bookkeeper, plus $5,000 to $15,000 for the annual accountant. Total: $90,000 to $130,000 per year. And you are still missing reporting and analysis.
Model 2: In-house financial controller. A financial controller can handle all three layers. They manage the bookkeeper (or do the books themselves), produce monthly reporting, and provide analysis. The problem at $5 million is that a competent financial controller in Australia commands $120,000 to $160,000 in salary. Add 12 per cent super, leave entitlements, and recruitment costs, and the all-in cost is $155,000 to $210,000 per year. That is 3 to 4 per cent of revenue spent on one person in the finance function. See our cost to hire a finance manager in Australia guide for the full breakdown.
The other risk is single-person dependency. When your financial controller is on leave, sick, or resigns, your entire finance function stops.
Model 3: Embedded finance team. An outsourced team handles all three layers. A dedicated analyst manages daily operations (Layer 1). A second analyst provides coverage and supports month-end close. A senior professional (CA or CPA) reviews the work, produces management accounts (Layer 2), and provides the analytical and advisory layer (Layer 3).
Cost: $3,000 to $6,000 per month ($36,000 to $72,000 per year) depending on transaction volume, employee count, and reporting complexity. That is 40 to 55 per cent cheaper than a financial controller and comes with built-in redundancy. This is the model Scale Suite operates.
At $5 million, your finance technology stack should include five core components. If you are missing any of these, you have a gap.
Accounting platform: Xero. The standard for Australian SMEs. At this revenue, you need the Business plan ($78/month) which includes multi-currency, project tracking, and unlimited users. Do not run a $5 million business on the Starter or Growing plan. The limitations will cost you more than the $30 per month difference.
Payroll: Xero Payroll or Employment Hero. For 20 employees on standard modern awards, Xero Payroll (included in the Business plan) is usually sufficient. If you have complex award interpretation, shift workers, or you want HR functionality (leave management, onboarding, performance reviews), Employment Hero at $8 to $14 per employee per month is worth the investment.
Reporting: Fathom, Spotlight, or Futrli. Xero's built-in reports are adequate for compliance but insufficient for management reporting. A dedicated reporting tool costs $50 to $300 per month and produces professional monthly packs with visual dashboards, trend analysis, and KPI tracking. This is one of the highest-value, lowest-cost investments a $5 million business can make.
Accounts payable automation: ApprovalMax or Dext. At 30 to 80 supplier invoices per month, manual invoice processing wastes 10 to 15 hours per month and introduces errors. An AP automation tool ($50 to $200/month) captures invoices digitally, routes approvals, and feeds data into Xero. Read our guide to AP automation for more.
Cash flow forecasting: Float or Futrli. A rolling 8 to 13 week cash flow forecast should be updated weekly. Manual spreadsheet forecasts are fragile and time-consuming. A dedicated tool ($50 to $100/month) pulls live data from Xero and produces forecasts that actually get updated. Use our cash flow forecast calculator for a quick starting point.
Total finance tech cost at $5 million: approximately $4,000 to $8,000 per year for the software stack alone. That is 0.08 to 0.16 per cent of revenue. The return in time savings and decision quality dwarfs the investment.
Here is what a well-functioning finance function at $5 million should deliver, and the cadence.
Weekly: Bank reconciliation completed. Cash position summary (current balance, expected inflows this week, expected outflows this week). Aged receivables update with overdue follow-up actions taken. Supplier payment run processed.
Fortnightly: Payroll processed, STP reported, payslips distributed. Super calculated (paid quarterly but tracked each pay run).
Monthly (delivered by the 10th business day): Profit and loss report with comparison to budget and prior year. Cash flow summary. Balance sheet with commentary on significant movements. Aged receivables and aged payables report. Key metrics dashboard (gross margin, revenue per employee, debtor days, creditor days).
Quarterly: BAS prepared, reviewed, and lodged. Cash flow forecast updated for the next quarter. Budget vs actual review with variance commentary. Super payments processed.
Annually: Budget preparation for the next financial year. Financial year-end close and handover to tax accountant. EOFY compliance (payment summaries, STP finalisation, workers compensation declarations). Annual leave liability review.
If your current finance function is not delivering all of the monthly items by the 10th business day each month, you have a capability gap that is costing you decision-making quality. Our financial benchmarks by revenue stage guide shows what good looks like at each level.
Here is an honest comparison of total annual cost for the finance function at $5 million.
Model 1 (bookkeeper plus accountant, no reporting): $90,000 to $130,000 per year. Covers Layer 1 only. No monthly reporting, no analysis. You are flying blind on margins, cash flow, and profitability.
Model 2 (financial controller): $155,000 to $210,000 per year. Covers all three layers but with single-person dependency. When they leave, everything stops. Recruitment to replace costs $15,000 to $25,000 and takes 6 to 12 weeks.
Model 3 (embedded finance team): $36,000 to $72,000 per year. Covers all three layers with team redundancy. No recruitment risk, no leave liability, no gap periods. Scales with the business without renegotiation.
For most businesses at $5 million, Model 3 delivers the best combination of coverage, cost, and resilience. The break-even point against Model 2 is clear: even the upper end of embedded team pricing ($72,000/year) is less than half the cost of a financial controller ($155,000 to $210,000/year).
Use our hire vs outsource calculator to model your own scenario.
If you are at or approaching $5 million and experiencing any of these, your finance function is not fit for purpose.
You cannot produce a monthly P&L within two weeks of month-end. You do not know your gross margin by service line or job. You find out about cash shortfalls days before payroll, not weeks. Your BAS has been amended or lodged late in the last 12 months. You are personally spending more than 5 hours per week on finance tasks. Your tax accountant spends more than 15 hours cleaning up your year-end file. You cannot answer the question "which of my customers is the most profitable?" with data.
If three or more apply, the finance function is holding your business back. And the solution is usually not "hire a better bookkeeper." It is to build a proper three-layer finance function appropriate to your stage.
How many finance staff does a $5M business need?
Typically the equivalent of 1.0 to 1.5 full-time employees across all finance tasks. This can be structured as one full-time bookkeeper plus part-time senior oversight, or as an embedded team that provides the equivalent coverage with built-in redundancy.
When should a $5M business hire a CFO?
Most $5 million businesses do not need a dedicated CFO. They need CFO-level thinking applied periodically (4 to 8 hours per month) by a senior professional. A full-time or even fractional CFO at significant hours is typically not justified until $8 million to $10 million, or earlier if a capital event is imminent.
What reports should a $5M business produce monthly?
At minimum: profit and loss (with budget comparison), cash flow summary, balance sheet, aged receivables, and aged payables. Ideally also: gross margin by service line and a key metrics dashboard.
How much should a $5M business spend on its finance function?
Between 1 and 3 per cent of revenue ($50,000 to $150,000 per year) including people, software, and accounting fees. Most of this budget should go to operational delivery (Layers 1 and 2) rather than strategic advice (Layer 3).
What accounting software should a $5M business use?
Xero Business plan is the standard for Australian SMEs at this revenue. Supplement with a reporting tool (Fathom or Spotlight), an AP automation tool (ApprovalMax or Dext), and a cash flow forecasting tool (Float or Futrli).
How do I transition from a bookkeeper-only model to a full finance function?
Start by ensuring Layer 1 (compliance) is running reliably. Then implement monthly reporting (Layer 2). Only add analytical capability (Layer 3) once the first two layers are consistently delivering. This transition typically takes 2 to 4 months.
Is it cheaper to outsource or hire in-house at $5M?
For most businesses at $5M, outsourcing is 40 to 55 per cent cheaper than an equivalent in-house hire when you account for salary, super, leave, recruitment, and the cost of gaps. The quality comparison depends on the provider, but a good embedded team delivers broader coverage than a single in-house hire.
What are the biggest finance mistakes businesses make at $5M?
Overpaying for strategic advice while the underlying data is unreliable. Not producing monthly reports. Treating the bookkeeper as the entire finance function. Waiting until a cash crisis to implement forecasting. And tolerating single-person dependency in the finance function.
If you are at or near $5 million, answer one question: do you receive a monthly P&L with budget comparison within 10 business days of month-end? If the answer is no, that is the single most valuable thing you can fix in your finance function. Not a CFO. Not a strategy session. Just a reliable monthly P&L. Everything else builds from there.
Scale Suite is a Sydney-based provider of outsourced finance teams and fractional CFO services for Australian SMEs. We deliver weekly bookkeeping, payroll, BAS/IAS lodgement, cashflow reporting, management accounts, and strategic fractional CFO oversight as a fully embedded team that works inside your business.
CA-qualified, Xero Certified, and registered BAS Agents, we replace fragmented bookkeepers and once-a-year accountants with one responsive finance function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
Learn more about our embedded finance model at scalesuite.com.au/services/finance
Disclaimer: This article provides general information only and does not constitute financial, legal, or professional advice. Scale Suite Pty Ltd (ABN 16 684 424 771) recommends seeking advice tailored to your specific circumstances. Liability limited by a scheme approved under professional standards legislation.
Sources
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
Employment Hero Gold Partner, CA-qualified, and Xero Certified, we replace fragmented finance and HR processes with one responsive, senior-level function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
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