When Does a Contractor Need a CFO?

By Martin · Updated 2026-02-02

Contractors typically need CFO-level insight when revenue crosses $10M, when bonding capacity becomes a growth constraint, when cash flow becomes unpredictable despite profitability, or when facing major decisions like acquisitions, succession, or significant expansion. You don't always need a full-time CFO — fractional CFOs or sophisticated tools can provide the same strategic perspective.

After two decades advising construction companies, I can usually tell within five minutes whether a contractor needs CFO-level support. It's not always about revenue size — I've worked with $15M companies that didn't need a CFO and $8M companies that desperately did. The need is driven by complexity, growth trajectory, and risk profile.

Why This Matters

The gap between "we need CFO-level thinking" and "we got CFO-level thinking" is expensive. I've watched contractors turn down $12M jobs they could have successfully completed because they didn't know how to optimize their bonding capacity. I've seen profitable companies fail because they didn't understand their cash conversion cycle. The difference between thriving and struggling often comes down to financial sophistication at exactly the right moment.

Revenue Thresholds (The Rough Guide)

Under $5M: You probably don't need dedicated CFO support. A good bookkeeper and a competent CPA during tax season can handle most of what you need. Focus on clean job costing and basic cash management.

$5M-$10M: This is the inflection point. You're too large for simple bookkeeping but might not have the budget for a full-time CFO. This is fractional CFO territory — you need strategic financial thinking a few days per month, not daily execution.

$10M-$50M: You absolutely need CFO-level insight, either from a fractional CFO, a strong controller with strategic skills, or sophisticated financial tools. Your bonding relationships, cash forecasting, and project risk management are too complex for part-time attention.

Over $50M: You probably need a full-time CFO on staff, especially if you're bidding public work, managing multiple project managers, or considering geographic expansion.

But revenue is just a proxy. The real question is whether you're experiencing the symptoms.

The Warning Signs You Need a CFO

Your 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. A CFO optimizes your balance sheet to maximize bonding capacity — managing WIP positions, structuring debt appropriately, and presenting your financial story in the best possible light.

Cash flow surprises despite profitability. Your P&L says you made $800K last year, but your bank account doesn't reflect it. You're profitable on paper but struggling to make payroll some months. This is a classic sign you need someone managing working capital, understanding the cash conversion cycle, and building actual cash forecasts (not just looking at the P&L).

The owner is doing everything. You're estimating jobs, managing projects, dealing with the bank, reviewing WIP reports, and trying to make strategic decisions about growth. You don't have time to do any of it well. A CFO takes the financial strategy off your plate so you can focus on operations and business development.

Your banker is asking harder questions. Five years ago, your line of credit renewal was a rubber stamp. Now your banker wants detailed projections, aged AR analysis, and explanations for balance sheet changes. That's a signal you've crossed into a complexity tier where banks expect CFO-level financial management.

Missed opportunities because you can't see capacity. You're turning down work (or taking on too much) because you don't have a clear view of labor capacity, equipment availability, or cash requirements. A CFO builds systems that let you make these decisions with confidence.

You're making gut-feel decisions on six-figure questions. Should you buy or lease that $350K excavator? Can you afford to add a project manager before you have the work to support their salary? Should you bid that project given your current backlog? These questions need data-driven answers, not guesses.

Major Business Transitions

Even if you're not at the revenue threshold, certain situations absolutely require CFO-level thinking:

Acquisitions — Whether you're buying or selling, you need someone who can structure the deal, perform financial due diligence, and integrate financial systems.
Succession planning — Transitioning ownership requires years of preparation. A CFO structures the business to maximize value and minimize tax implications.
Geographic expansion — Opening new markets means new bonding requirements, different cash patterns, and more complex cost allocation.
Major debt financing — Taking on significant debt (equipment purchases, facilities, acquisition financing) requires sophisticated cash flow modeling and covenant management.

You Don't Always Need Full-Time

Here's the good news: most contractors under $50M don't need a full-time CFO. They need CFO-level thinking, which can come from:

Fractional CFO — An experienced CFO who works 2-4 days per month, typically $3K-$8K monthly. This is the sweet spot for most contractors in the $5M-$30M range.
Strong controller with strategic training — Some controllers can grow into CFO-level thinking with the right tools and training. Not all can, but if yours is capable, investing in their development is often the most cost-effective approach.
Sophisticated financial tools — Modern software can provide cash forecasting, WIP analysis, and capacity planning that used to require a full-time CFO. Tools don't replace judgment, but they dramatically reduce the hours needed.

The Bottom Line

You need a CFO when the cost of not having one exceeds the cost of having one. If you're turning down profitable work, making expensive mistakes on bonding or banking relationships, or spending 10+ hours per week on financial strategy yourself, you've crossed that threshold.

The most common mistake I see is waiting too long. Contractors who add CFO-level support at $8M-$12M in revenue grow more smoothly and profitably than those who wait until $20M and are already dealing with cash crises, bonding constraints, and strategic confusion.

Start with fractional support or better tools. You don't need to hire a $200K executive tomorrow. But if you're experiencing any of the warning signs above, you need CFO-level thinking today, not next year.