How to structure your SaaS finance team

We’ve built a handful of finance teams, and while no two teams look the same, here are some frameworks and rules of thumb on how to organize them.

Finances are one aspect of operations that every startup needs to dial in as quickly as possible. For a fast-growing early-stage SaaS startup, getting organized on this front is critical to saving both time and money, as well as having a handle on the performance and direction of your business to make it to the next round of funding. 

Each company will have specific needs for finance depending on its business model, particularly related to the level of complexity and automation in its invoicing and billing process. B2B enterprise companies may need support earlier to manage invoicing volume. B2B self-serve and B2C companies with automated checkout flows may be able to wait longer before growing a finance organization.

This guide will cover the two key sub-teams that every finance operation should have, as well as how best to integrate your finance team with other functions in the company. It also touches on how best to prepare the team for audits and tips on how to choose technology that grows with you.

How to set up your finance team

Start with hiring a strong leader for your finance department. If you’re considering your first in-house hire on this front, make it a head of finance or VP of finance. Ensure that your chosen candidate brings experience with both driving strategy and managing a team within a finance organization.

Once you start to grow your team, you’ll want to group your finance team into the two key sub-teams that every finance operation should have: 

Accounting 

This team—the larger of the two—executes the operations of the company’s finances, reports on historical results, and handles tax and treasury. Start with a junior accountant who can help process accounts payable, accounts receivable, and payroll. Next, add in leadership, such as an accounting manager who can help ensure the junior accountant(s) are operating effectively and select initial back-office systems. Hire a controller once your team is around 75–100 strong, and you’re on track to be hiring aggressively in the next 12 months.

Financial planning and analysis (FP&A) / Strategic finance 

This smaller team executes on forward-looking planning around forecasts and business strategy. Bring on one or two team members initially to support the leader of the finance team with key initiatives such as annual budgeting and forecasting, preparing Board materials, strategizing pricing and packaging issues, and supporting future financing needs.

Integrating your finance team with others

The best-managed finance teams are those that are integrated deeply with the other functions in the company so that relevant data and insights can be shared both with and from the finance team.

Finance teams should coordinate closely with sales, marketing, and operational functions, allowing them to feed the finance model with relevant info that finance can use. This allows finance to stay responsible for the system while relinquishing some control over data inputs, which facilitates transparency, insight, and oversight. 

Prepare for the eventual audit

It’s typical for companies to hold off on doing an audit until it’s required, but that doesn’t mean you can’t do some preparation for an audit any time. 

As you establish your early finance organization, ensure they routinely prepare financial statements for your business that the management team can scrutinize for accuracy and understanding of the business. In addition, be sure to retain copies of contracts, invoices, and other documentation. Ensure they are regularly recorded to your financial statements. 

If you don’t do this as you go, you’ll spend a significant amount of time during your company's initial audit simply organizing and documenting all of your business’s files and financial information.

Grow your technology with you

As a company grows, the need for more advanced technology to maintain an organized finance operation grows too. Early on, a company may choose to simply operate with a bank account, not maintaining any additional financial information on their activities. 

The next step is adoption of an accounting system such as QuickBooks. These systems are excellent at what they do, but fast-growing companies, especially those headed for enterprise scale, will soon graduate from them. 

Companies make different choices about how to grow their financial software stack and into something else. Some transition directly into a Cloud-based ERP system like Intacct or a NetSuite.

In addition to systems to create financial statements many businesses select billing systems that are built to support their invoicing model, such as Stripe, Chargebee, or Ordway.

These systems can be a big challenge for business as they typically are a key touch point with end customers. The finance department needs to have clear controls regarding the process and data within the system to ensure the integrity and execution of the billing process. ⊞