Startup CXO

Chapter 16Strategic Finance

In the early days of a startup, your role as CFO is mostly about establishing the systems I've outlined in Chapters 12–14, finding the right partner for bookkeeping, and making sure everyone is getting paid, and has some benefits. That's a tall order for anyone, but those are the basic things that you'll have to set up if you don't want to be a blocker in your company's growth. Once revenue starts, you'll have to add more services and functions, things like billing, collections, sales taxes, and other back office and foundational items. If you just do that—build the basics, hire for roles within that structure, and add functions as you need them, you'll create a capable finance organization. But you won't create a great finance organization, you won't be able to improve productivity or make a big impact in the company. To create a great company, you'll need to think strategically about how Finance can be a partner to the organization.

For example, here's something I wish we had done from the very beginning at Return Path: develop consistent naming for products. Sounds like a little thing. And as a startup, it is simple because you might only have a couple of products. But the number of products grows rapidly and if you don't set up your systems for automation and scalable data classification, and link those to your accounting system, you'll run into problems as you grow. Product and Sales team members love (for good reason) to create new packages ...