What Are Signs My Company Needs a CFO?

Most contractors don't wake up one morning and think "I need a CFO." What happens instead is a slow accumulation of financial stress, missed opportunities, and gut-feel decisions that gradually erodes confidence. By the time you're actively searching for help, you usually needed it 18 months ago.

Here are the signs I've seen across hundreds of contractors. If three or more of these resonate, you have a financial leadership gap.

Sign 1: You're Profitable But Cash-Strapped

This is the single most common symptom. Your P&L says you made money. Your CPA confirms it. But your bank account tells a different story — you're drawing on your line of credit to make payroll, stretching AP to manage cash, and feeling a constant low-grade anxiety about money despite "good" financial results.

Why this happens: Profit and cash are fundamentally different things in construction. Overbilling creates cash today but steals it from tomorrow. Underbilling means you've earned revenue you haven't collected. Retention ties up 5-10% of every dollar you've earned. Growth consumes cash faster than profits generate it.

What a CFO does about it: Builds a 13-week rolling cash forecast that connects your WIP position, billing schedule, AR aging, and AP commitments into a single view. You stop being surprised and start managing proactively.

Sign 2: Gut-Feel Decisions on Major Financial Questions

Should you buy that $400K excavator or lease it? Can you afford to add two project managers before you have the backlog to support them? Should you bid that $12M hospital project when your largest completed job is $6M? Is this the year to open a second office?

If you're answering these questions based on "I think we can handle it" or "it feels like the right time," you're gambling with the business. These decisions need financial modeling — cash impact analysis, capacity modeling, scenario planning — not instinct.

The cost of getting it wrong: I worked with a $22M GC who bought $1.2M in equipment based on a handshake backlog that didn't materialize. The debt service consumed their cash reserves, they couldn't bond new work because their balance sheet was leveraged, and they spent two years digging out of a hole that never should have existed. A two-hour financial analysis would have flagged the risk.

Sign 3: Bonding Capacity Is Limiting Growth

You're turning down bid opportunities — not because you can't do the work, but because your surety won't support the additional bonding. Or your single-job and aggregate limits haven't grown in proportion to the opportunities you're seeing.

Why this is a CFO problem: Bonding capacity is a financial engineering challenge. It's driven by working capital, net worth, cash flow quality, WIP position, and the financial story you tell your surety. A CFO optimizes each of these levers — managing overbilling/underbilling positions, structuring debt appropriately, building equity, and presenting your financial narrative strategically.

What most contractors do instead: They ask their CPA to "make the numbers look good" for the surety. This is backwards. You don't dress up the numbers — you manage the underlying financial performance that the numbers reflect. That's CFO work.

Sign 4: Your Banker Is Asking Harder Questions

Five years ago, renewing your line of credit was a formality. Now your banker wants rolling cash projections, detailed backlog analysis, explanations for balance sheet changes, and quarterly reviews. They might even be asking about specific jobs.

This isn't your banker being difficult. It's your banker recognizing that your business has grown past the complexity level where simple financial statements tell the whole story. They want to see sophisticated financial management — and they should.

The risk: If you can't provide what your banker needs, you get higher rates, lower credit limits, or — worst case — a non-renewal that forces you to find a new banking relationship under pressure. Having a CFO who maintains a proactive relationship with your bank prevents this entirely.

Sign 5: Nobody Interprets Your WIP Report

You produce a WIP schedule — maybe your controller does it, maybe your CPA does it at year-end. But nobody is reading it strategically. Nobody is spotting margin fade in real time. Nobody is connecting the WIP position to cash flow implications. Nobody is using it to evaluate which jobs need immediate attention.

The WIP schedule is the most important financial tool in construction. If it's sitting in a file folder until your surety asks for it, you're wasting the single best source of forward-looking financial intelligence your business produces.

Sign 6: The Owner Is the De Facto CFO

You're spending 10, 15, even 20 hours a week on financial work — reviewing job costs, managing cash, talking to the bank, analyzing bids, trying to figure out if you can afford that new hire. You're doing it because nobody else can, but you're also not doing it well because it's on top of everything else.

The hidden cost: Every hour you spend on financial management is an hour you're not spending on business development, client relationships, project oversight, or strategic planning. The owner's time is the most expensive resource in the company. If you're spending it on work a CFO could do better, you're overpaying for CFO services at the worst possible rate.

Sign 7: Financial Surprises Have Become Normal

Job profits come in lower than estimated — regularly. Cash crunches appear without warning. Year-end results are materially different from what you expected. Your CPA finds adjustments that change your numbers significantly.

Financial surprises in construction are preventable. They happen when nobody is watching the leading indicators — WIP trends, billing positions, cost-to-complete updates, cash forecasts. A CFO builds systems that make surprises almost impossible, because you see problems developing weeks or months before they hit.

Sign 8: You're Growing Fast and It Feels Chaotic

Revenue is up 30% this year. You've added crews, bought equipment, hired PMs. Everyone's busy, everyone's optimistic. But underneath the growth, cash is tighter than ever, your accounting can't keep up, and you have a nagging feeling that you don't actually know if you're making money on all this new work.

Growth without financial infrastructure is the most common way contractors get into serious trouble. I've seen more companies fail from growing too fast without financial controls than from slow markets. A CFO builds the financial infrastructure that makes growth sustainable — cash forecasting, capacity planning, margin monitoring, and debt management.

How Many Signs Is Enough?

• 1-2 signs: You might not need a CFO yet, but you should be building better financial systems and processes.
• 3-4 signs: You have a financial leadership gap. A fractional CFO or sophisticated financial tools would add significant value.
• 5+ signs: You need CFO-level support now, not next quarter. The cost of waiting is accumulating daily.

The Bottom Line

These signs don't usually appear one at a time. They cluster. Profitable-but-cash-strapped leads to gut-feel decisions, which leads to bonding constraints, which leads to missed growth opportunities. It's a cascading problem, and it accelerates.

The good news: you don't need a $300K executive to solve this. A fractional CFO at $3K-$8K per month, the right financial tools, or both can close the gap. The key is recognizing the signs and acting before the accumulated cost of not having financial leadership becomes a crisis.

If you read this list and felt a knot in your stomach on three or more items, that's your answer.