November 13, 2024

How to Scale a Finance Team from Series A to Series B

‍

1. Understand the Shifting Demands: Series A vs. Series B

‍

In Series A, you probably had a lean team focused on basic accounting, cash management, and making sure payroll was on time (because no one likes unpaid employees). But Series B is a different game, and suddenly, everyone wants detailed reports and projections, streamlined processes, and data-driven insights—plus, your investors will start asking more detailed questions and digging deeper.

According to Andreessen Horowitz, Series A finance teams are typically composed of a single generalist, maybe with outsourced accounting support. But by Series B, your team will need specialized roles to tackle FP&A, compliance, and strategic financial planning.

“At Series B, you’re no longer just tracking performance; you’re setting up the infrastructure for future scale.” - Sequoia Capital Insights

‍

2. Start by Defining Your Key Roles

‍

Here’s what a streamlined finance team could look like at the Series B stage:

Finance Lead/CFO (we often see a VP of Finance be the most popular/common hire at this stage): You may have been doing fine with a Head of Finance, but Series B is when companies start bringing in CFO-level expertise. This person should be both a strategist and operator, with experience in scaling companies, managing investor relationships, and implementing financial controls.
FP&A Analyst: This is your future finance rockstar—the one digging deep into metrics, creating financial models, and making sense of the numbers. This role is all about financial planning and analysis, and as Lighter Capital emphasizes, FP&A is “essential for translating business goals into budget realities.” There are a few scenarios here: you may already have a Director of Finance or Senior Finance Lead on the team OR it's possible your VP of Finance rolls up their sleeves before building out a team.
Controller: If you haven’t yet hired a controller, now’s the time. This role focuses on ensuring accurate financial records, overseeing regulatory compliance, and leading the audit process. A controller brings more financial rigor to your team, giving you confidence that the numbers you’re sharing with investors are solid.
Staff Accountant: Don’t overlook this role! They’ll handle the daily operational tasks, freeing up your controller to focus on the bigger picture.

‍

3. In-House vs. Outsourcing: What Stays, What Goes?

‍

When it comes to accounting, payroll, and other back-office tasks, consider what makes sense to keep in-house vs. outsource.

Accounting: If your transactions are becoming too complex for an outsourced bookkeeper, it might be time to bring accounting in-house. a16z suggests that bringing on an accountant or controller with SaaS experience will allow you to better handle things like revenue recognition and deferred revenue tracking, which are common in subscription models.
Payroll: Payroll can be a huge time sink, especially as headcount grows. Solutions like Gusto (Great UI) or ADP are affordable, flexible options that many startups continue to use well into Series B.
Tax Compliance: Outsources domestic and/or international compliance can save you from a lot of headaches. As a SaaS business grows, so do its state and international tax obligations. Using an experienced CPA firm can save you time, money, and stress.

‍

4. Automate Where It Matters

‍

At Series B, you don’t just need automation; you need smart automation. Repetitive, error-prone tasks like bookkeeping, expense management, and invoice processing are perfect for automation, and the time savings can be significant.

Consider adopting finance automation tools such as:

QuickBooks or NetSuite: QuickBooks works well for early startups but may hit its limits as your accounting complexity grows. NetSuite is a more robust option that’s commonly used by companies entering Series B territory. Infor Syteline ERP is a great option especially for manufacturing companies.
Ramp, Expensify, or Brex: For managing expense reporting, platforms like these streamline expense tracking, approvals, and reimbursements.
Bill.com or Melio: Managing accounts payable can eat up valuable time. Tools like Bill.com automate payments, reminders, and workflows, helping keep cash flow steady and stress levels low.

“Automating basic finance functions allows your team to focus on strategy instead of spreadsheets.” - Sequoia Capital Insights

‍

5. Get Serious About Reporting and Analytics

‍

Investors at Series B expect more than just high-level metrics. You’ll need deeper, more frequent insights to drive informed decisions. * Tomasz Tunguz of Redpoint Ventures emphasizes the importance of moving beyond “founder math” to robust, data-backed financial reporting.

Monthly/Quarterly Reporting: As your team matures, you’ll need to produce formalized monthly and quarterly reports with detailed financial statements, cash flow forecasts, and expense breakdowns.
KPI Dashboards: Building a KPI dashboard allows your finance team to track metrics like ARR, NDR, customer churn, and burn multiple in real-time. Tools like Tableau, PowerBI, Domo, and/or Looker make it easier to visualize and communicate data. It's possible you need to hire a Business Analyst or Business Intelligence Engineer to help craft company wide dashboards (for finance and other business units).

*Note: you're likely already on top of these types of reports and KPIs or you wouldn't have raised your B round!

‍

6. Build Strong Cross-Functional Relationships

‍

As you grow, finance needs to work closely with other teams, especially Sales, Product, and Customer Success. FP&A should collaborate with Sales to set quotas that align with revenue goals, work with Product on pricing strategies, and stay connected with Customer Success to manage churn and retention rates. Pro tip! Finance should ALWAYS be working directly with your talent or recruiting team for headcount management, candidate compensation expectations, and much more.

“Scaling a finance team means scaling relationships—collaboration with other departments is just as crucial as the numbers themselves.” - First Round Review

‍

7. Prioritize Financial Controls and Compliance

‍

As you scale, the stakes are higher, and so are the risks. Here’s where a solid controller and VP of Finance/CFO can be invaluable. Focus on setting up controls around cash flow, expense management, and budgeting. Make sure your books are audit-ready, especially if you’re preparing for a potential acquisition or Series C.

‍

8. Create a Financial Roadmap

‍

Series B marks the beginning of “adulting” for startups, so this is a great time to create a long-term financial roadmap. This roadmap should outline key financial milestones—like when to break even, ARR targets, or operating margin goals.

By having a plan in place, your team won’t just be reacting to changes but driving the financial direction. Bessemer Venture Partners suggests using this roadmap to align finance team goals with broader company objectives, giving you a clear path to achieve the benchmarks that matter.

‍

Wrapping It Up

‍

As Andreessen Horowitz reminds us, “Series B is about becoming a company, not just a startup.” Here’s to building a finance team that can help make that happen!

‍