Jack Perkins is the founder of CFO Hub, which provides on-demand CFO, controller, accounting, and HR services.

Most founders prioritize growth. However, they often start by hiring more salespeople and expanding marketing instead of focusing on finance. That can be problematic. Without a scaled financial department, it’s easier to overspend on growth, forecast revenue improperly, and miss investor expectations. That’s why more companies should start their scaling process with finance. But what does that look like? And whom do you hire first? Keep reading to learn more. Three reasons to scale finance first Let’s start by reviewing why finance is worth scaling first. There are three key reasons why it’s worth your attention earlier.

1. Finance finds the blueprint for smart growth. First, you’ll need an effective financial department to scale growth safely. It can help you answer questions like: How much can we afford to invest in this growth strategy?

What will our ROI be? How soon can we break even?

How will investing in scaling impact the rest of the company’s financials? These kinds of projections leverage financial insights to help companies make smarter decisions. If you underinvest in your finance team, you may not get all of the information you need to make informed strategic decisions. For example, you might need to choose between several competing go-to-market strategies. A scaled financial team could help you forecast the outcome of each tactic and choose the option that puts your business in the best position to succeed.

2. Fundraising starts with financials. Many growing companies seek contributions from outside investors. These are easier to get when you have a scaled financial team helping you pitch. They can support your efforts by backing up what you say with verifiable financial data. A financial team can also help you explain the why behind numbers, providing valuable additional context that could lead to more investment funds. Sometimes, raising capital is more about metrics than the product behind them. A scaled finance department can help your company shine in these meetings with more robust data and forecasts. 3. Compliance and risk become complex quickly. Finally, scaling often brings new risks to a business and increases its compliance obligations. Scaling finance early will help your company build the controls it needs to manage this. Your team can help you:

Avoid common traps like late tax filings, international payroll challenges, and misclassified contractors

Overcome compliance issues that can slow down due diligence and hurt valuations

Manage your audit risk while you grow rapidly

Keep the company’s books ready for investors while you focus on scaling What does financial scaling look like? If you’re convinced that finance is worth scaling early in your growth journey, the next step is to do it. Here’s a three-step process you can follow to get started. 1. Begin with a strong financial foundation. First, make sure that your financial department is functioning well today. Scaling works best from a position of strength. So, take a hard look at your existing systems, processes, and pain points before investing in solutions. For example, you’ll want to ensure you have timely, accurate books and basic financial reporting covered. It’ll also be important to update your cap table and think proactively about financial planning instead of responding to problems reactively.

There are a variety of upgrades you may want to make at this point, including: Replacing a manual spreadsheet process with accounting software

Setting up a monthly close cadence

Tying your financial model to your most important KPIs

Mapping out your tax and compliance calendar for the rest of the year 2. Embrace automation and tooling. Once you have the basics covered, you can begin the scaling process with tools. These are more affordable than hiring new employees and can free up your existing team to focus more on strategic thinking. You can find powerful tools to help with payroll, expense management, accounting, cap table management, forecasting, and more. Look for platforms that will automate your most repetitive, low-value tasks and invest in these first.

3. Scale your financial team in the right order. Finally, you’re ready to start adding new employees to your financial department. It’s important to do this in the right sequence to optimize your spending. You’ll typically start by hiring a bookkeeper to take daily accounting tasks off your plate. You may need to expand with additional accountants and specialists as you grow. Once your accounting department has grown, look into hiring a controller. They’ll act as your interim financial leader and will oversee high-level financial tasks like: Regulatory and financial reporting

Treasury management

Budgeting and forecasting The last step in scaling your financial department is hiring a CFO. This long-term financial leader will assume ongoing responsibility for your company’s finances.

A recent study found that businesses typically don’t hire CFOs until they reach 100 employees and revenue exceeding $25 million. If you’re not quite that large, you could benefit from a part-time CFO, who can offer high-level expertise at a reduced cost. Look into fractional CFO services if you’re interested in learning more. The hidden costs of failing to scale finance early It’s worth scaling your financial department early for the benefits it can bring to your business. But you can also avoid significant hidden costs by scaling early, including: Spending more than budgeted because of poor forecasts

Missing valuable tax credits

Overreaching on hiring or go-to-market strategies

Founder burnout from manually managing too many financial tasks

Struggling to answer investor questions and missing fundraising opportunities So, scaling finance early isn’t just about unlocking new benefits. It’s also about avoiding downside risks that might otherwise derail your business from its growth trajectory.

Scaling finance prepares your business for growth Scaling finance first may not feel natural. But it could be the most effective way to prepare your business for growth. It’ll help you create more useful projections, pitch your business to investors, and meet key tax and regulatory obligations. The key will be designing a scaling process that works for your company. That depends on where you are today and how you hope to grow.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.