Running a startup is a big responsibility, but let’s face it—financial management can feel like a daunting chore. Yet, it’s one of the most critical pillars of your business’s success. Without a solid financial workflow for your startup, even the most innovative ideas can crumble under the weight of disorganization, missed opportunities, and costly errors.
What is one of the essential functions in your business?
Finance!
(“Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labour.” – Robert J. Shiller)
Why?
Because clear and timely financial statements provide insight into your company’s performance, while expense metrics can reveal areas of high spending and budgeting insights allow you to plan ahead. Additionally, regular financial strategy meetings enable data-driven decisions that can have a real impact.
Each of these outcomes is a rust of well-established financial workflows. A strong workflow isn’t just about staying organised; it’s a powerful time-saver and for startups, time is your most valuable asset.
Yet, despite recognizing the importance of solid financial processes, many startups struggle to establish them. It’s common to see month-end closing delayed by two, three, or even more months - by which time, the data is outdated and less useful. This delay usually comes down to a lack of a consistent financial workflow and an approach of handling finances only during “free time,” which, for a busy founder, rarely exists.
Without these workflows, finances often become an unwelcome task, eventually passed off or outsourced with a trail of backlog and errors.
Does this sound familiar?
Here are 5 steps for you on how to avoid creating a financial chaos and build foundation for healthy financial structure:
1. Start Bookkeeping from Day One—First Step to Automation
Many people think finances are complicated or even scary. They’re not, especially with today’s technology! Invest in bookkeeping software like QuickBooks (trust me, it’s one of the simplest out there). Monthly costs are low for starter options, and most platforms link to your bank to pull transactions automatically. Attach a receipt, assign it to the right account, and you’re done.
If you set up this process from day one and follow it weekly, it’ll take no more than 15 minutes a week to keep your finances in check. No excuses - just do it.
As Dave Ramsey said “You must gain control over your money or the lack of it will forever control you.”
2. Delegate as Soon as Possible
This goes for every part of your business. When the chance to delegate bookkeeping comes up, take it. The payoff is worth it. Businesses end up spending thousands of dollars on catch-up bookkeeping services because it’s twice as hard to figure out what happened months ago than to do it on time.
Outsourcing costs between $150 - $300 per month for an early-stage startup, which is pennies compared to playing financial catch-up later. Delegate and stay focused on the bigger picture.
3. Get an Expense Management System—Second Step to Automation
Technology is here to make your life easier, so use it. Virtual cards, virtual wallets - set up an expense management system as soon as you hire your first employee. With platforms like Float (yes, I’m biassed, but it’s a lifesaver!), the cost is often zero. When everyone is responsible for their own expenses, you’re building a better financial workflow for your startup and a culture of accountability from the start.
Bookkeepers shouldn’t be chasing down receipts, and businesses shouldn’t be paying for disorganisation. Take a step toward efficiency and sanity.
4. Learn to Read Financial Statements
It’s on you, as a founder, to know how to read financial statements - no one can establish a better financial workflow for your startups or understand your business’s financial health better than you. Tons of books, podcasts, and videos are out there, so pick a medium and get started. If you’re tight on time, bring in a financial consultant to give you the essentials.
Set up a monthly routine to review your financials - find the time. This isn’t optional.
5. Cash Flow Projections and Budgeting
Setting up a budget and projecting cash flow aren’t quick or easy, but they’re invaluable.
Hire a professional if needed. It’s money well spent, and an accurate budget and cash flow statement can mean the difference between thriving and barely surviving.
With cash flow projections, you’ll make more informed hiring, product development, and marketing decisions, not to mention they’re crucial if you’re seeking investors or loans.
Final Thoughts
These steps are simple, affordable, and - most importantly - they work. When implemented early, they won’t eat up your time, and your future finance team will thank you for it. More importantly, you’ll stay in control and keep chaos at bay.
“The secret of getting ahead is getting started.” - Mark Twain
