A finance function that served a £2m business well will almost certainly not serve a £15m business well. The problem is that this rarely becomes apparent until a moment of crisis — a late audit, a cashflow shock, an investor who has lost confidence in the numbers, or a CFO who burns out trying to compensate for a system that was never designed for the current scale.
The following six warning signs can each be observed before that crisis point. They are the equivalent of the orange warning light on your car dashboard — addressable now, if you know what to look for.
Warning Sign 1: Management Accounts Take Longer Than Ten Days to Close
In a well-run finance function of any size, monthly management accounts should close within eight to ten working days of month end. Ten days is not an aggressive target — it is the standard that allows management to make decisions based on last month’s data rather than data from two months ago.
If your accounts are taking three weeks or longer, the likely causes are one or more of the following: the chart of accounts is poorly designed (requiring manual reclassification each month); accruals are being built from scratch rather than rolled forward; the ERP does not match the management reporting structure (requiring a manual Excel bridge); or the finance team does not have the capacity or the process discipline to run month-end efficiently.
Each of these is solvable, but none of them resolve themselves. T+4 is achievable for most SMEs with the right process design — it requires investment in systems and process, not more headcount.
Warning Sign 2: The Board Pack Is a PDF of Excel Spreadsheets
A board pack that is a printout of Excel models — with no consistent format, no prior-period comparatives, no commentary on variances, and no forward-looking view — is a symptom of a finance function that is producing data rather than insight.
A board needs three things from its finance function each month: what happened (actuals vs. budget), why it happened (variance analysis and commentary), and what is expected to happen (updated forecast). If the board pack does not contain all three in a clear, consistent format, the finance function is not serving the board.
The fix is to design a board pack template — with agreed sections, agreed metrics, agreed level of detail — and then build the finance processes to feed it. This is not a technology project. It is a design and discipline project.
The investor test: Could a PE investor who has never seen your business before pick up your board pack and, within 30 minutes, have a clear view of ARR, cash, EBITDA vs. budget, key variances and the three-month outlook? If not, the pack needs redesigning.
Warning Sign 3: The Finance Team Cannot Answer Basic Questions Without a Day’s Notice
If your CEO asks “what is our gross margin this month?” or “how much cash do we have after payroll runs on Friday?” and the answer is “I’ll come back to you tomorrow” — the finance function is not operating at the standard the business requires.
This is almost always an ERP and process problem rather than a people problem. When financial data is distributed across multiple systems, maintained inconsistently, or requires manual manipulation before it can be used, even simple questions become time-consuming to answer. The solution is a single source of truth for financial data — an ERP that is correctly configured, consistently used, and updated in near-real-time.
Warning Sign 4: The Finance Function Has No Forward-Looking View
If finance is entirely focused on reporting what happened last month and has no maintained view of what is expected to happen next month, next quarter, and next year — the finance function is providing history, not management information.
A business of any meaningful size needs a maintained rolling forecast. This does not mean a static budget that was set in October and never updated. It means a living model that is updated each month with the latest actuals, revised assumptions and updated forward estimates — giving management a constantly current view of how the year is expected to close and what the following year looks like.
Building and maintaining this forecast is one of the primary responsibilities of a CFO. If it does not exist, the finance function is missing one of its core functions.
Warning Sign 5: Nobody Trusts the Numbers
This is the most serious warning sign of all, and it is common in businesses that have grown quickly or integrated acquisitions without adequate finance infrastructure investment. The tell-tale signs are:
- The CEO uses their own spreadsheet to track performance because they do not trust the management accounts
- Board discussions spend significant time on whether the numbers are right rather than what to do about them
- There are regular restatements or “corrected” figures circulated after month-end has closed
- Different parts of the business quote different revenue or margin figures for the same period
When the numbers are not trusted, decision-making quality degrades across the entire business. And when an investor, auditor or lender discovers a material error — as they inevitably will — the damage to confidence is severe and hard to recover from.
Restoring trust in the numbers requires a structured review: starting with the chart of accounts, reconciling all balance sheet control accounts, reviewing the revenue recognition methodology, and rebuilding management reporting from a clean base. This is unglamorous work. It is also some of the highest-value work a CFO can do.
Warning Sign 6: The Finance Function Has No Capacity to Support the Business
If the finance team spends 80% of its time on compliance work — month-end close, VAT returns, audit preparation, payroll — and has no capacity to support pricing decisions, new market entry analysis, customer profitability assessment or scenario planning, the function has become a cost centre that happens to be housed in a growth business.
A finance function at the right scale for the business should spend roughly half its time on compliance and reporting, and half on analysis and business support. Getting there often requires a combination of process efficiency improvements (to reduce the time spent on compliance work) and capacity investment (to create headroom for analytical work).
The goal is not a bigger finance team. The goal is a finance team that the business actually uses.
What to Do About It
If two or more of these warning signs apply to your business, the right next step is a structured finance function review — typically a two to four week assessment that identifies the root causes, prioritises the interventions, and produces a clear plan with timelines and costs.
The interventions themselves range from ERP configuration work (weeks) to board pack redesign (weeks) to team restructuring (months). None of them require the business to pause while they are addressed — the best implementations are phased to run alongside the existing operation.
The cost of not addressing them, on the other hand, compounds over time — in management time wasted, in decisions made on poor information, and in the credibility damage that occurs when investors or auditors find problems that a well-functioning finance team would have caught months earlier.
Graeme Weeden is a CA(SA)-qualified CFO and founder of Croftlands Consulting Limited. He specialises in finance function transformation for PE-backed and founder-led businesses in SaaS, events and high-growth services.