How to Build Financial Controls in a 20-Person Company Without Hiring a Finance Department

When small companies stop being small

There is a moment every growing business hits. It is not when you move into a new office or hire your first manager, it is subtler than that. One day you realise you cannot keep every number in your head anymore.

Invoices go missing. Two people approve the same expense. A supplier gets paid twice. Someone forgets to cancel a subscription that has been quietly renewing for months. The business has not become reckless, it has simply outgrown the founder’s mental spreadsheet.

That is the moment you realise financial control systems and processes are essential. Not a finance department, not an audit committee, just the right structure to stop money leaking through the cracks.

In this article, we will explore what financial controls really are, why they matter long before you think they do, how technology, and yes, a bit of AI, can make them almost effortless, and how your outsourced finance team can install them without you adding a single headcount.

What “financial control” really means

The phrase sounds heavier than it is. Controls are not about bureaucracy or mistrust, they are about clarity. They make sure the money flowing through your business is recorded, approved and visible to the people who need to see it.

Think of them as traffic lights for cash. Green means go ahead, amber means check this first, and red means stop, something is not right.

At the smallest scale, financial control might mean one person reviews invoices before payment. As the company grows, it expands to include authorisation limits, reconciliation checks, approval workflows and regular reporting.

The goal is not to slow you down. It is to keep momentum safe, to make sure the company is growing faster than its risks.

Why controls matter more than you think

In a 20 person business, the lines between roles blur. The marketing manager orders software, the founder approves it and the bookkeeper pays it, all fine until someone misses a step.

Without clear processes, simple errors compound. You discover that half your expenses are on personal credit cards, that a supplier has not been invoicing correctly for months, or that a client’s payment terms were never recorded properly. None of these are catastrophic on their own, but each one erodes profit and confidence.

Then there is the human factor. When everyone is busy, trust becomes shorthand for process. “I am sure John checked that.” “Sarah probably paid it.” Most of the time, they did. Occasionally, they did not. And that is how fraud, overspending and unbudgeted commitments slip through.

Controls do not imply mistrust, they demonstrate respect for the business. They create transparency that protects everyone involved. And they free leadership from micromanagement, because accountability becomes embedded within the system rather than dependent on memory.

The myth of “too small to need structure”

One of the most common refrains from founders is, “We are not big enough for that yet.” But size is not the deciding factor, complexity is.

A two person consultancy with multiple clients, variable invoices and subcontractors can need more control than a fifty person retailer with predictable transactions. The earlier you embed structure, the easier it scales. Waiting until you are “big enough” means you will be implementing controls during a crisis, after a missed payment, a tax oversight or a painful cashflow squeeze.

Controls are like insurance you hope you will never need, except cheaper and much more useful. They are the quiet scaffolding that lets growth happen safely.

What happens without them

Financial drift rarely arrives with a fanfare. It creeps in quietly. In practice, it looks like this:

A customer fails to pay, but their service stays active because there is no alert system connecting billing and delivery. Subscription renewals slip through unnoticed, so you miss the chance to upsell or renegotiate. Expenses get reimbursed twice because there is no approval trail. Directors rely on last month’s bank balance rather than a forward looking cashflow forecast. Supplier payments go out late, damaging relationships and straining goodwill.

None of these would topple a business on their own. Together, they create drag, a thousand small inefficiencies that quietly shorten runway and weaken decision making.

Building practical controls without adding headcount

You do not need a finance department to build good habits. Start with five simple foundations.

1. Segregation of duties

No single person should control an entire financial transaction. One person raises a purchase order, another approves it and someone else makes the payment. Even in small teams, this is possible. It is not about suspicion, it is about visibility.

2. Authorisation limits

Set clear thresholds for spending. For example, team leaders can approve up to £1,000, department heads up to £5,000, and anything above that goes to the founder or outsourced FD. Everyone knows the rules, and decisions happen faster because no one needs to guess who can say yes.

3. Reconciliation routines

Bank reconciliations, credit card statements and payroll checks should be monthly at minimum. Automate what you can, but make sure someone reviews the results. A thirty minute review can catch errors that would otherwise snowball into much larger problems.

4. Documentation and workflow

Use cloud tools that keep records visible and searchable. An expense app that attaches receipts automatically is worth its subscription ten times over. The paper trail should exist even when the people who created it do not. When documents live in inboxes or personal folders, control evaporates the moment someone is off sick or leaves the company.

5. Regular reporting rhythm

A simple monthly report showing revenue, costs and cashflow is transformative. You do not need forty pages of charts, you need a snapshot that everyone trusts. The act of reviewing it together, on the same date every month, becomes a control in itself.

Where technology earns its keep

A decade ago, controls required spreadsheets, signatures and filing cabinets. Today, technology does most of the heavy lifting.

Cloud based systems like Xero, QuickBooks and Sage connect directly to your bank. Tools like Dext, ApprovalMax and Pleo automate expense capture and approval. They tag transactions, capture receipts and route payments for sign off without anyone printing a thing.

For a 20 person business, this combination of software acts like a part time finance department. It enforces process quietly in the background.

You can even add a lightweight layer of AI. Modern accounting platforms now flag anomalies automatically, a duplicate payment, an unexpected spike in expenses or a missing invoice. The same machine learning that predicts your streaming choices can now predict which supplier payments need double checking.

But AI also amplifies the need for human oversight. It is fast, but not infallible. Algorithms can misinterpret context or flag noise as risk. The best system pairs automation with human judgement, an experienced outsourced accountant or FD who knows which alerts matter and which do not.

Technology is not there to replace judgement, it is there to free judgement from admin.

The human side of financial control

Controls are not only about numbers, they are about behaviour. They define how a business handles money, which in turn shapes culture.

When staff understand that every purchase has a process, every expense needs a receipt and every payment requires approval, financial discipline becomes a shared value rather than a burden. It fosters ownership rather than bureaucracy.

And because modern systems make compliance easy, for example scanning a receipt on your phone, people actually use them. The secret is not enforcement, it is convenience. If controls fit naturally into how people work, they stop feeling like rules and start feeling like rhythm.

How outsourced finance teams fit in

For growing businesses, outsourced finance support provides the missing middle layer between chaos and structure. You get the experience of a finance director and the efficiency of a digital system without hiring either full time.

Outsourced professionals typically audit your current process and identify risks, set up or refine your accounting software and approval workflows, implement cashflow forecasting and monthly reporting, train your team so that compliance happens naturally, and keep an eye on trends, spotting irregularities, late payments or creeping costs before they bite.

Think of them as your finance co pilot, part detective, part engineer, part translator. They make the data tell a story that management can act on.

AI, your quiet financial assistant

Modern smart technology and artificial intelligence has quietly entered the world of small business finance. It can read receipts, predict payment delays and even draft management reports. Used properly, it is an incredible ally.

An AI enabled accounting system can scan thousands of transactions to find anomalies in seconds, something that used to take hours. It can forecast cashflow scenarios instantly and highlight when future tax liabilities might collide with payroll.

But there is a catch, AI only knows what you feed it. If your data is messy, it will multiply that mess faster than any human ever could. That is why human validation matters. An outsourced FD ensures that the insights AI provides are based on reality, not illusion.

The sweet spot is partnership. Let AI handle repetition and detection, and let people handle interpretation, judgement and decision making. Together, they form a level of control no spreadsheet can match.

Practical steps to start tomorrow

You do not need to overhaul everything at once. Start small and build momentum.

Map the money flow. Write down who authorises, records and pays each type of transaction. Any point controlled by one person is a risk. Pick one automation tool and start with expenses or approvals. Small wins build confidence.

Set a closing routine. Close the books on the same day every month. Predictability is a control in itself. Schedule a quarterly review. Even if it is just an hour with an outsourced FD, use it to check the system still fits the business.

Make it visible. Share simple dashboards with your leadership team. Controls work best when everyone can see them.

Within a few months, you will feel the change, fewer surprises, faster reporting, more confidence. Growth feels steadier when you are not holding your breath over every payment.

The bigger picture, control as freedom

It might sound contradictory, but the more structure you have around money, the freer you become. When approvals, reconciliations and reporting run on autopilot, leadership can focus on strategy. Teams can act without second guessing.

Controls give you something underrated in business, mental bandwidth. You stop firefighting and start steering.

Outsourced finance teams exist for exactly this purpose, to make small companies operate with big company confidence. With the right systems, even a 20 person firm can achieve financial visibility and discipline once reserved for corporates.