2Apr

Financial management for startups: A CEO’s guide to effective financial planning and analysis

Whether your company is five years old or just five months old, it's important to have a plan and know how to control your company’s finances. Here are the things you should do to ensure that your company stays profitable.

Most people who run startups are passionate about building things and watching them grow, not dealing with the nitty-gritty of company finances. And spreadsheets and financial management don't typically inspire that kind of passion.

But as CEO, you have to make hundreds - if not thousands - of decisions every week. So you have to prioritize the big stuff (like growth milestones) while still making sure that the little stuff gets done (like accounting and paying company expenses).

Whether your company is five years old or just five months old, it's important to have a plan and know how to control your company’s finances. Here are the things you should do to ensure that your company stays profitable.

 

Financial management: The fundamentals

 

Build your dedicated finance team

The moment your business has the means, it’s worth investing in people who understand finance. This won’t just make your life easier, it’ll also help you safeguard your cash flow and avoid problems down the road.

You probably won’t be fortunate enough to have your own in-house finance team at this point - at least not in the early stages. However, it’s critical that you still get the help of finance experts who can help you avoid problems later on.

One way to do this is outsourcing. Outsourcing your finance function is a smart way of accessing top talent while avoiding the admin and overheads that comes with hiring an internal finance team. It also allows you to scale as your business grows, choosing to receive more resources during periods of growth and withdrawing when required.

Outsourcing your finance function can allow you to access an entire team of experts including tax specialists, accounting professionals and CFO services, meaning you can be left with more time to focus on the core business.

Go digital

As a tech-savvy startup founder, you’re no stranger to the wide range of software tools out there. But even financial analysis and management can be fun with the right software in place.

Having the right accounting software that is flexible and works with your other tools will provide you the basics and ensure that your financial tasks are as automated as possible. But you’ll need some financial analysis and reporting software to support this, to enable better financial decision making.

You’ll probably have dashboards and analytics in place for your marketing, sales, and customer success. But a dashboard like Qokoon for your financial planning and analysis (FP&A) is vital to the success of your business. 

Get these fundamentals right, and you’ll spend less time worrying about the details, and more time doing what you love: growing your business.

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