Which financial workflows should you focus on? Where should you start? Which can you delegate? On the question of how to simplify your finances as a founder, the answer lies at the center of it all: the bank account.
In this chapter of The Entrepreneur’s Handbook, we look at the three core financial functions for founders, and how to simplify them all from the start.👇
🧮 Foundational finance functions: These include basic bookkeeping, payroll, and payments. For starters, timely and accurate payroll is a reflection of your company’s respect for its workforce. Similarly, ensuring vendors are paid on time builds strong relationships and prevents supply chain disruptions. These can often be handled in-house in the early days or outsources as your needs grow. Basic bookkeeping with give you a working knowledge of your day-to-day cash flow and insights into the health of the business. Hiring a bookkeeper sooner than later, however, can ensure you stay on track.
📑 Financial records & obligations: Think taxes and cap table management. You may not be focused on taxes in the early days (especially if you aren’t profitable yet) but meeting tax obligations and taking advantage of any tax benefit is important from the get-go. You may want to outsource this to a tax firm or CPA with experience in your industry. You might also consider retaining legal counsel or exploring specialized tools for cap table management to maintain accurate records of equity ownership across friends and family rounds, angel investors, and VCs.
📊 Financial data & performance: This can encompass growth and product data, P&L reporting, and managing cash and runway. You’re best positioned to understand your startup’s financial performance in the context of your business. Tracking this will help you understand revenue trends over time and the levers that drive it, and to better forecast your cash position at any given time, which can help make smart calls for the future of your company.
Read the full article at the link in our comments to learn more. 👇
