Scaling Your Finance Function: From Seed to Series B
A practical guide to building finance capabilities that grow with your startup: when to hire, what to outsource, and how to build processes that scale.
At the seed stage, you might manage finances in a spreadsheet and check your bank balance on your phone. By Series B, you'll need proper accounting systems, financial planning processes, a finance team, and controls that satisfy investors and auditors. The journey between these points is where many startups struggle.
Building your finance function isn't just about adding headcount. It's about creating the right combination of people, processes, and systems at each stage of growth. Move too slowly and you'll create chaos. Move too fast and you'll waste precious runway on infrastructure you don't need yet.
This guide walks through how to scale your finance function from the earliest days through Series B, helping you make smart decisions about when to hire, what to outsource, and how to build processes that will grow with your company.
What You'll Learn
We'll cover finance needs at each stage, the build vs. buy decision, critical processes that need to scale, systems evolution, common mistakes, and key transition points to watch for.
Finance Needs by Stage
Your finance needs evolve dramatically as you grow. What works at the seed stage becomes a liability post-Series A, and what you need post-Series B would be overkill earlier. Understanding these stages helps you plan ahead without over-investing.
Pre-Seed / Bootstrapping
Stage Characteristics
Team of 1-5, minimal revenue, focus on product
Finance Needs
- Basic bookkeeping (often founder-managed or simple software)
- Bank account reconciliation
- Simple expense tracking
- Basic runway tracking in a spreadsheet
Typical Setup
QuickBooks Self-Employed or Wave, founder managing finances, maybe a part-time bookkeeper
Seed Stage ($1M-$3M raised)
Stage Characteristics
Team of 5-15, early revenue, product-market fit exploration
Finance Needs
- Professional bookkeeping (outsourced or part-time)
- Monthly financial statements
- Basic cash flow forecasting
- Board reporting and investor updates
- Simple budget and burn tracking
- Payroll system
Typical Setup
QuickBooks Online, outsourced bookkeeper, possibly a fractional CFO for strategic guidance
Series A ($5M-$15M raised)
Stage Characteristics
Team of 15-50, meaningful revenue, scaling operations
Finance Needs
- Dedicated bookkeeper or accounting service
- FP&A capabilities (budgeting, forecasting, variance analysis)
- Proper revenue recognition (especially for SaaS)
- Metrics tracking and dashboards
- More sophisticated board reporting
- Headcount planning
- Vendor management and contracts
Typical Setup
QuickBooks Online or Xero, dedicated bookkeeper, fractional or full-time CFO, expense management tool, possibly first finance hire
Series B ($20M-$50M raised)
Stage Characteristics
Team of 50-150+, significant revenue, professionalized operations
Finance Needs
- Full-time CFO (if not already)
- Finance team (controller, accountants, FP&A)
- Audit-ready financial statements
- Sophisticated financial planning
- Internal controls and policies
- Multi-entity / international considerations
- Strategic finance capabilities
Typical Setup
NetSuite or similar ERP, full-time CFO, 3-8 person finance team, integrated tech stack, potentially preparing for audit
When to Make Your First Finance Hire
Deciding when to bring on your first dedicated finance person is one of the trickier decisions for growing startups. Too early wastes runway; too late creates chaos. For a deep dive, see our guide on Your First Finance Hire: What Role to Fill First.
Signals It's Time
Time Signals
- CEO spending 10+ hours/week on finance
- Month-end close takes more than a week
- Financial questions slow down decisions
- Board prep consumes significant time
Quality Signals
- Books are consistently behind
- Cash surprises (in either direction)
- Can't answer investor questions quickly
- Financial reporting is inconsistent
What Role First?
The first finance hire varies based on your needs:
| If You Need... | Consider... | Typical Cost |
|---|---|---|
| Clean, timely books | Bookkeeper (outsourced or part-time) | $1-3K/month |
| Strategic guidance + operations | Fractional CFO | $3-10K/month |
| Day-to-day finance management | Controller (full-time) | $120-180K/year |
| Executive-level leadership | VP Finance or CFO | $200-350K+/year |
Most Common Path
For most seed to Series A startups, the optimal sequence is: outsourced bookkeeper (seed) → add fractional CFO (late seed/Series A) → hire controller (post-Series A) → hire full-time CFO (late Series A/Series B). See our article on Finance Team Structure: Seed to Series B.
Building vs. Outsourcing
Not every finance function needs to be in-house. Smart startups use a mix of internal and external resources, shifting the balance as they grow. The key is knowing what to keep close and what can be effectively outsourced.
Good Candidates for Outsourcing
Bookkeeping
Transactional work that's well-defined and can be done by specialists. Most startups outsource until Series A or beyond.
Payroll
Complexity with regulations, tax withholdings, and compliance. Services like Gusto and Rippling handle this efficiently.
Tax Preparation
Requires specialized expertise that's only needed periodically. Use a CPA firm with startup experience.
Audit
External requirement by definition. Choose an auditor familiar with your stage and industry.
Better to Build In-House
Financial Planning & Analysis
FP&A requires deep understanding of your business. While you can use a fractional CFO early on, this capability should move in-house as you scale.
Strategic Finance
Fundraising support, M&A work, and strategic decisions benefit from someone who knows your business intimately.
Business Partnership
Finance partners who work with department heads on budgets and decisions need to be embedded in the organization.
Internal Controls
Designing and enforcing policies, approvals, and controls requires someone with authority and context.
The Fractional Model
A fractional CFO represents a middle ground: you get senior expertise and strategic thinking without the cost of a full-time executive. This model works well from seed through Series A, and sometimes beyond. Learn more about when to transition to a full-time CFO.
Fractional CFO Advantages
Processes That Need to Scale
As your company grows, certain finance processes become critical bottlenecks if not properly designed. Building scalable processes early saves enormous pain later. For a comprehensive guide, see Building Finance Processes That Scale.
Monthly Close
Scaling Your Close Process
At seed stage, closing the books might happen whenever you get around to it. By Series B, you need a tight monthly close process:
Budget and Forecasting
Approval Workflows
What starts as "ask the CEO" needs to become a structured approval process:
- Expense approvals: Who can approve what amounts? How are exceptions handled?
- Vendor onboarding: How do new vendors get set up and vetted?
- Contract signing: Who can commit the company to agreements?
- Hiring approvals: How do headcount requests get approved?
Reporting Cadence
| Report | Audience | Cadence |
|---|---|---|
| Cash position | CEO, leadership | Weekly |
| Financial statements | Leadership, board | Monthly |
| Budget vs. actuals | Department heads | Monthly |
| Board deck | Board | Monthly or quarterly |
| Investor update | All investors | Monthly or quarterly |
| Forecast update | Leadership, board | Quarterly |
Systems That Grow With You
Your finance tech stack needs to evolve as you scale. The goal is to choose systems that can grow with you, avoiding both over-investment early and painful migrations later.
Accounting Software Evolution
Pre-Seed to Seed
Recommended: QuickBooks Online or Xero
These cloud-based systems handle most startup needs well through $5-10M in revenue. They're affordable, widely understood by bookkeepers, and have good integrations.
Series A to Series B
Consider: QuickBooks Online (Advanced) or Xero with add-ons, or NetSuite
At this stage, you might outgrow basic QBO. The decision to migrate to NetSuite or similar ERP typically comes between $10-50M revenue, driven by complexity needs (multi-entity, international, audit requirements).
Post-Series B
Recommended: NetSuite, Sage Intacct, or similar ERP
At scale, you need proper ERP capabilities: multi-subsidiary consolidation, advanced revenue recognition, robust reporting, and audit trails.
Supporting Tools
Expense Management
Move from manual receipts to automated expense capture.
Examples: Ramp, Brex, Expensify
Payroll
Essential from day one. Choose based on team distribution.
Examples: Gusto, Rippling, Deel (international)
FP&A / Planning
Graduate from spreadsheets to dedicated tools as complexity grows.
Examples: Mosaic, Runway, Jirav, Cube
Billing / Revenue
Especially important for SaaS with complex pricing.
Examples: Stripe Billing, Chargebee, Maxio
Migration Warning
System migrations are expensive and disruptive. Don't migrate too early (waste of resources), but don't wait until your systems are completely broken. Plan migrations during relatively calm periods, not right before a fundraise or audit.
For guidance on automating your finance stack, see our article on Automating Finance: What to Automate and When.
Common Scaling Mistakes
We've seen startups make these mistakes repeatedly when scaling their finance function:
Hiring Too Senior Too Early
A CFO from a public company won't be happy or effective at a 15-person startup. They'll want to build infrastructure you don't need and won't do the hands-on work required at early stages. Match the hire to your stage.
Hiring Too Junior When You Need Senior
Conversely, hiring a bookkeeper when you need strategic finance leadership leaves critical gaps. If you're fundraising or making major strategic decisions, you need someone with the experience to guide those processes.
Ignoring Finance Until Crisis
Many founders only pay attention to finance when something breaks: a failed audit, a cash crunch, or investor questions they can't answer. Building proactively is always cheaper than fixing reactively.
Over-Engineering Systems
Implementing NetSuite at seed stage, or building elaborate dashboards before you have reliable data, wastes time and money. Right-size your systems for your current stage, with an eye to near-term needs.
Not Investing in Processes
You can have great people and great systems, but without documented processes, everything depends on tribal knowledge. When key people leave, chaos follows.
Confusing Bookkeeping with Finance
Clean books are necessary but not sufficient. Strategic finance—planning, analysis, investor relations—requires different skills and is often neglected while founders focus on "getting the books right."
Key Transition Points
Certain moments trigger the need to level up your finance function. Watch for these transition points:
First Institutional Investment
When you take VC money, you have a board and investors expecting professional financial management. This typically triggers the need for proper bookkeeping and basic FP&A capabilities.
Crossing 20-30 Employees
Around this size, complexity increases significantly. You likely need dedicated finance attention—either a controller or a meaningful fractional CFO engagement.
Preparing for Series A+
Series A and beyond requires investor-grade financials, sophisticated models, and the ability to withstand due diligence scrutiny. Start preparation 6+ months before you plan to raise.
First Audit
Many startups face their first audit around Series B. This requires audit-ready books, documented processes, and internal controls. The preparation often requires system upgrades and process improvements.
International Expansion
Opening entities in other countries dramatically increases finance complexity: multi-currency, transfer pricing, local compliance, and consolidation all require more sophisticated capabilities.
Getting Started
Building a scalable finance function is a journey, not a destination. Here's how to assess where you are and plan your next steps.
Self-Assessment Questions
- How quickly can you produce accurate financial statements?
- Can you answer basic questions about runway, burn, and unit economics?
- How much time does leadership spend on finance tasks?
- Do you have documented finance processes?
- Are your systems appropriate for your current stage and near-term growth?
- Can you handle an investor or due diligence request within a week?
- Is anyone actively thinking about finance strategy, not just operations?
Immediate Actions by Stage
Seed Stage
- Get a professional bookkeeper (outsourced is fine)
- Set up proper accounting software
- Create a simple cash flow forecast
- Consider a fractional CFO for strategic guidance
Series A
- Ensure you have FP&A capabilities (fractional or full-time)
- Implement proper budgeting and forecasting
- Build scalable reporting processes
- Consider your first full-time finance hire
Continue Learning
Explore these related guides to dive deeper into specific topics:
Your First Finance Hire
What role to fill first and when
Building Finance Processes That Scale
Process design for growth
When to Hire a Full-Time CFO
Timing the transition
Finance Team Structure
Building your team from seed to Series B
Automating Finance
What to automate and when
Fractional CFO Guide
Complete guide to fractional CFO services
Need Help Scaling Your Finance Function?
Eagle Rock CFO helps seed and Series A startups build scalable finance capabilities. Let's discuss where you are and where you need to go.
Schedule a Consultation