What to Track Before You Hire Finance
Hiring your first finance person is a milestone. But bringing them in before you have basic systems in place is like hiring a chef when your kitchen has no appliances.
Here's what to track and systematize before you make that hire.
Core Financial Statements
Your finance hire needs clean inputs. Get these basics right first.
Profit & Loss (P&L): Monthly P&L that's accurate and timely. This shows your revenue and expenses. It doesn't need to be perfect, but it needs to be close.
Balance Sheet: A basic balance sheet showing assets, liabilities, and equity. Track your bank accounts, accounts receivable, accounts payable, and any debt.
Cash Flow Statement: Understanding where your cash comes from and goes. Even a simple version helps.
These don't need to be perfect. But they need to exist, be reasonably accurate, and be produced monthly. Your finance hire will make them better—but they need something to start with.
Key Metrics Dashboard
Know your numbers before someone else has to explain them to you.
Revenue metrics: Monthly recurring revenue (MRR), annual recurring revenue (ARR), new customer acquisition, churn. Whatever matters for your business model.
Expense metrics: Burn rate, cost per customer, cost per employee, operating expenses as % of revenue.
Cash metrics: Bank balance, days of cash, cash conversion cycle, accounts receivable aging.
Unit economics: If you're SaaS, know LTV/CAC. If you're e-commerce, know margin per product. Know the metrics that matter for your business.
Build a simple dashboard—a spreadsheet is fine. Update it monthly. When your finance hire arrives, you'll have baseline data and a clear view of what's important.
Accounts Receivable Process
If you invoice customers, you need a process.
Invoicing: Standardized invoice template, clear payment terms, consistent billing schedule.
Tracking: Know who owes you what and when. Maintain an accounts receivable aging report.
Collections: Process for following up on overdue invoices. Define when you escalate and how.
Reporting: Monthly AR aging report. Track days sales outstanding (DSO).
Your finance hire can optimize this, but they need a process that works. Manual is fine—just make it consistent.
Accounts Payable Process
Know what you owe and when you pay it.
Bill capture: Process for receiving and storing vendor invoices. Don't lose bills.
Approval workflow: Who approves what? Define spending limits and approval authority.
Payment schedule: Know your payment terms with vendors. Track when bills are due.
Payment method: Consistent way to pay (checks, ACH, credit card). Document it.
Reporting: Monthly accounts payable aging report. Know what's due when.
Good payables process prevents late fees, maintains vendor relationships, and gives you visibility into upcoming cash outflows.
Payroll and Benefits
If you have employees, get payroll right.
Payroll provider: Use a proper payroll service. Don't DIY payroll.
Employee data: Maintain accurate employee information, including tax forms and benefit elections.
Time tracking: If you pay hourly, have a system for tracking time.
Benefits administration: Track health insurance, 401(k), and other benefits. Know your costs.
Reporting: Understand your payroll costs, including taxes and benefits. Review payroll registers monthly.
Your finance hire will manage this more strategically, but they need a clean foundation.
Tax Compliance Basics
Don't let tax issues become emergencies.
Sales tax: If you collect sales tax, track it properly. Remit on time.
Payroll taxes: Ensure payroll taxes are paid. Your payroll provider should handle this, but verify.
Estimated taxes: If you're profitable, make quarterly estimated tax payments.
Record keeping: Maintain organized records. Keep receipts, invoices, and important documents.
Your finance hire will handle this more comprehensively, but basic compliance needs to be in place.
Banking and Accounting Software
Get your tech stack right.
Business bank accounts: Separate business and personal accounts. Use a business checking account.
Accounting software: Use proper accounting software (QuickBooks, Xero, etc.). Don't use spreadsheets for everything.
Bank feeds: Connect your accounting software to your bank. Automate transaction imports.
Chart of accounts: Basic chart of accounts that makes sense for your business. Keep it simple but logical.
Your finance hire will refine this, but they need a working system to start with.
Documentation and Processes
Document what you do so someone else can take it over.
Month-end close process: Document your steps for closing the books each month.
Revenue recognition: Define how and when you recognize revenue. Write it down.
Expense categorization: Document rules for categorizing expenses. Create a guide.
Reconciliation process: Document how you reconcile bank accounts and credit cards.
Exception handling: Note how you handle unusual transactions or one-off items.
Good documentation makes handoff smoother and ensures consistency.
The Right Time to Hire
You're ready to hire finance when:
- You have basic financial statements produced monthly
- You track key metrics consistently
- Your processes are documented and working
- You're spending too much time on finance work that could be done better by someone else
- You're making decisions without the financial data you need
You're NOT ready if:
- You're still figuring out your business model
- Your books are a mess with no processes
- You can't produce basic financial statements
- You haven't systematized anything yet
The Bottom Line
Hiring finance before you have basics in place means your hire will spend their time on catch-up work, not strategic work. Build the foundation first, then bring in expertise to elevate it.
Your finance hire should make your numbers better, your processes smoother, and your decisions clearer—not spend their first six months untangling chaos.