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