When each seat fits.
| Seat | Typical practice size | What it solves |
|---|---|---|
| Bookkeeper | Under $2M | Transactions, basic reports, payroll, A/P. |
| Controller | $2M–$7M | Accurate close, controls, monthly reporting, budget variance, lender-grade statements. |
| Fractional CFO | $3M–$25M | Forecasting, payer strategy, profitability analysis, capital decisions — without the full-time cost. |
| Full-time CFO | $15M+ | Daily strategic decisions, transactions, board reporting, capital structure. |
Warning signs you’ve outgrown the seat.
- Financials arrive late, get restated, or you don’t fully trust them.
- You can’t answer “where will cash be in 90 days?”
- You can’t name which providers or services actually make money.
- Every financial decision routes through the owner.
- A capital event (sale, partner buy-in, lender) exposes diligence gaps.
The three levels of finance support.
Every practice has a finance function whether they realize it or not. The question is whether it’s adequate for the size and complexity of the business. There are three levels:
- Bookkeeper — transactional. Records what happened. Required for everyone.
- Controller — structural. Builds the chart of accounts, runs close, produces reliable monthly statements, manages cash, tax coordination. Most practices over $3M revenue need this.
- CFO — strategic. Forecasts, scenarios, capital planning, payer negotiation support, M&A readiness, board-level reporting. Practices over $8–10M benefit; multi-site groups effectively require it.
The mistake most owners make is hiring at one level and expecting work from the level above.
Build, buy, or borrow.
Three structural options:
- In-house — full-time hire. Best when the practice has enough work to fill the role and the complexity warrants it.
- Fractional — outsourced controller or CFO on a defined cadence. Good fit for practices in the $3–15M revenue range who don’t justify a full-time hire.
- Hybrid — in-house bookkeeper plus a fractional controller or CFO above. Common and underrated.
The right answer depends on revenue, complexity (single location vs multi-site), and where the owner is in the journey (growing, optimizing, preparing for sale).
What good finance work produces.
You know your finance function is working when:
- Monthly financials close by the 10th of the following month, reliably.
- The chart of accounts mirrors how you actually run the practice (by service line, location, provider).
- Owners get a 1-page summary they actually read — not a 12-tab spreadsheet.
- Tax planning happens quarterly, not in March.
- Cash decisions are made against a forecast, not against the bank balance.
Questions practice owners ask.
When do we need a CFO? When the decisions you’re making are too large to make without modeling, or when you’re preparing for sale, recap, or a major capital event.
Can our accountant do this? Usually not. Tax accountants do tax. The work above is operational finance, which is a different discipline. A good tax accountant is essential; they’re rarely the right person to run the practice’s finance function.
How much should we spend on finance? Most well-run practices spend 1.5–3% of revenue on the finance function (bookkeeping, controller, CFO, software, tax). Under-investing here costs more than it saves.
Finance Function Assessment.
A 15-minute review that matches your current finance seat to the size and complexity of the practice.
Request the assessmentRun your own numbers.
The Medical Practice Finance Diagnostic scores your figures against these benchmarks — revenue cycle, payer mix, provider productivity, margin, and cash. Free, and everything runs in your browser.