4 Tips to Scaling Finance in a Quickly Growing Company

Your company is growing—fast! New customers, more sales, increased business complexity and if you work in finance or accounting, an exponential amount of work that needs to be accomplished on a daily basis. If this sounds familiar, we wanted to share some of our tips and provide suggestions from two people who have definitely been there.

In this article, we outline four practical ways you can scale finance operations for your startup. Jesse Lucas (Former Head of Finance at Uber) and Bryan Kim (Former Finance Executive at Snap and CFO at Bungalow) share some of their strategies with us.

We have a lot of great insights to share so let's dive right into tip #1.

1. Build a Well-Organized Team

We cannot overemphasize the importance of your team.  

Jesse Lucas advises “Knowing how to build the right team starts with deeply understanding the needs of your business.” 

Different business scenarios require different sets of skills.  For example, if you've been operating without the benefit of a true financial planning process and there's a need to change that, you will want to focus on someone with more of an FP&A background.  Alternatively, if it's time to implement a new accounting system, you likely want an accounting professional who has done this before.

In addition to having the specific skills and experiences on your team, Bryan Kim emphasizes that it’s "Really important to have both the strategic finance (or FP&A) and controllership organization working well with each other at all levels. When the house of finance runs as a team, great results can be achieved and everyone on the team is better off for it."

What does this look like in a real-world scenario?

  • Proper Hiring: Lucas says, “Take the time to understand the company's priorities, and determine where your team needs to grow in order to meet them. Make sure you and the CEO are aligned on your vision for the team, and then get to work: For each role, spend time to get clear on the profile you are seeking, then write a compelling job description that outlines what you're looking for, and gets the right set of candidates excited about your company and team. Develop a hiring process to evaluate candidates on the qualities you value most for each role. It’s not easy, but when building a team, plan to spend at least 30% of your time each week on hiring activities.”  If possible during the hiring process, also pay attention to the enthusiasm of potential employees. Are they passionate about your company? Will their personalities fit into your company culture? Are they excited about the growth and potential ambiguity as the company evolves?

  • Clear Duties:Create a plan to onboard your new hires quickly and effectively, and give them a clear set of priorities for their first few months” shares Lucas. “It’s also a good idea to have ready a list of the key people outside your team that your new hires should spend time with.” For teams to contribute effectively, they should not only know what their priorities are, but also the priorities for neighboring teams. Ideally, each employee's duties should match his or her abilities to help optimize the output of the group. You wouldn’t expect an engineering manager to close a ton of sales deals. Similarly, do your best within your team to put your employees in a position to succeed.

  • Shared Goals: Finally, it's imperative that both your finance department and your company as a whole are aligned on the most important goals. We’re devoting the next section to discuss why this is important and how to achieve it.

A well-organized team is the foundation of effective finance departments. Build yours strategically and scaling finance operations will be much easier!

2. Agree on Company Objectives

It’s the responsibility of an executive team to agree on the company objectives you'll collectively work to achieve. With these common goals, scaling your finance team will be made slightly easier and the company budgeting process also becomes more manageable. 

Kim says, "For budgeting, the first headcount planning can be the most difficult. Every team has a need they can clearly foresee and feel is well justified. Share the overarching corporate level POV and show commitment to adhere to the standards that executives and/or finance teams have put in place. For example, would you rather have one more front end engineer or one more internal audit team member? Ruthless prioritization is crucial." This prioritization is only possible if you have clear company objectives.

In order to implement this tip, you can start by gathering the executive team and any other key decision-makers in your company and hashing out organizational objectives. The finance team can help quantify these objectives and make sure their own work aligns with these goals.

3. Work More Efficiently

If scaling finance is a major priority for you, then you'll need to invest in software. The right tools will allow you and your team to streamline workflows and processes, helping you focus on high value responsibilities that the machines can't do (yet).

This tip is especially important for startups. Oftentimes, the finance "department" at new companies consists of just a couple of people. As your company scales, it's easy for these folks to become overwhelmed with tedious tasks like inputting invoice data. 

While it is certainly important to hire, you can multiply the output of the right hires with proper software. Here are a few software categories you should think about investing in:

  • Cloud Accounting: If your accounting software is still operating on the desktop version, invest in transitioning your accounting file to one of the cloud-based ERP systems. In addition, it’s important to choose one that is a better fit for your company’s industry and growth trajectory. Making the proper investment in this category empowers not only the accounting team but also the rest of the finance team that relies on this data.

  • AR/AP: Automate as much of your payment rails as possible with different tools to help collect revenue and pay expenses. In addition to automating the money transfer, look for tools that can help with reminders and other related responsibilities. This will help your team minimize headcount in this category and manual errors that will likely happen.

  • Spend management: While much of this is still done in spreadsheets, there are tools such as Sudozi to help your team keep track of financial information and build approval flows that are agnostic of payment type or vendor. With better automated controls, you can be much more efficient in your budgeting process and increase certainty that your company spending is aligned with company objectives.

These are just a few of the tool categories that will allow you to streamline your workflows via insights and automation. The key is to pick tools that are best for your company and actually use them.

4. Commit to the Iterative Process

Forecasting and budgeting are essential functions of every company's finance department—or, at least, they should be! But not every department within your organization will have experience implementing these concepts. This is why Kim says:

"When you first start the forecasting, and budgeting process, understand that there will be a lot of hand-holding that must happen with other department leaders and team members."

Because of this, it's important for finance professionals to build relationships and commit to the iterative process so that your workflows can be adjusted as needed. Kim goes on to say:

"[Forecasting and budgeting] is going to be an iterative process moving forward and it's important to start with a shared understanding of goals."

Wrapping Up

No one said scaling finance in a quickly growing company was going to be easy. But it has been done, and it's definitely possible! Follow the four tips outlined in this article and you'll be well on your way to an efficient and effective finance department that helps your organization achieve success.

 

 

 

Sudozi is a spend optimization software that will help you visualize financial commitments, streamline spend requests, and collaborate with budget owners in one place. For a limited time, give Sudozi a try for free today by filling out this form.

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