The Finance System every Startup needs

Create and follow these simple but effective Finance processes without complex software or a CFO.

Most startups don’t die because of bad products, weak teams, or tiny markets. They die because the founder wakes up one day and realises: “We’re out of money… and I saw it too late.”

Early-stage founders usually obsess over product strategy, growth hacks, hiring, and vision decks. Finance gets pushed to “later, when we’re bigger”. But by then, the bad habits are baked in and the runway is already gone.

The good news: you don’t need fancy software or a finance team to stay alive. You need a Finance System based on simple processes, plus consistent discipline to look at your numbers regularly.

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Process 1: Build a 13-Week Cash Flow

Most founders live inside their P&L… and that’s how they get blindsided. A P&L tells you if you “look good” on paper. Cash flow tells you if you’ll actually survive the next payroll.

A 13-week cash flow is a simple spreadsheet that shows what will really hit your bank account over the next quarter. It forces you to stop guessing and start seeing problems weeks before they become emergencies.

Put this in a simple sheet (no software needed):

• Create 13 rows: one per week.
• Add columns:
  • Starting cash (what’s in the bank on Monday)
  • Cash in (actual payments, not invoices)
  • Cash out (payroll, tools, rent, contractors, tax, etc.)
  • Ending cash (Starting + In – Out)
  • Runway in weeks (Ending cash ÷ average weekly burn)
• Update it every Monday.
• Please share it with at least one other founder or a trusted mentor, so you can’t lie to yourself.

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Process 2: Learn to Speak Both Cash and Accrual

You don’t need to become an accountant, but you do need to understand the two “languages of money”:

• Cash basis: “Can I make payroll?”
• Accrual basis: “How healthy and scalable does this business look over time?”

Founders often look at the pretty accrual graph and assume they’re safe. Meanwhile, cash is screaming the opposite. Do this instead:

• Once a month, ask for:
  • A cash-based view (what actually hit the bank).
  • An accrual-based view (how revenue and costs are recognised over time).
• Build a simple 1-page bridge that explains:
  • Prepaid expenses (you already paid, but the expense shows later).
  • Deferred revenue (customer paid now, but you “earn” it over time).
  • Accounts receivable (invoiced but not paid).
• If the difference between cash and accrual is >20%, dig in:
  • Are invoices late?
  • Are you prepaying big tools or contracts?
  • Are you counting revenue you haven’t collected?

Both views matter. Investors care about accruals. Survival cares about cash.

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Process 3: Use Scenarios for Spending Decisions

Hiring that senior engineer. Dropping €60k on a conference. Ramping ad spend.
These decisions rarely kill you on their own — it’s the unexamined pattern that does.

For any major spending decision, set clear decision rules:

• Define the decision clearly:
  • “Hire X for €120k”
  • “Commit €50k to this marketing channel”
• Run three scenarios:
  • Bear case (–10% revenue):
    • Does this shorten runway below your “red line” (e.g. <12 months)?
    • If yes → don’t do it / scale it back.
  • Base case (flat revenue):
    • Is this the best use of that cash vs other options?
  • Bull case (+10% revenue):
    • Will we regret not doing this if growth accelerates?
• Set a simple decision rule:
  • If 2 out of 3 scenarios clearly support it → go ahead.
  • If 2 out of 3 look risky or weak → delay or kill it.
• Revisit big decisions quarterly, not once a year.

This takes the guesswork out of spending and replaces it with sober thinking.

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Process 4: Stay Funding and Exit-Ready

Always be ready for a funding round, since being prepared avoids rushing, opens the door to better investor partners, and prevents negotiating on poor terms. Similarly, Acquisition conversations rarely arrive when you’re “tidy and prepared”. They show up as a random email, a DM, or a warm intro—and the ones who respond fast win. Being exit-ready doesn’t mean you’re trying to sell; it means your house is in order.

Keep a lightweight “data room” ready (1 simple folder with ~10 files):

• Company/product deck
• 3-year financial model (even if basic)
• Historical financials (P&L, cash flow, balance sheet)
• Fully diluted cap table
• Top 10–20 customers + why they buy
• Team list + short bios
• Product roadmap (what’s next)
• Key contracts (major customers & critical vendors)
• Legal basics (incorporation, IP ownership)
• Last 3 monthly finance one-pagers (see Rule 7)

Update this folder quarterly. Even if no one is asking, so that you:

• Move faster when opportunity knocks.
• See your own mess more clearly.
• Be forced to understand your own numbers.

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Process 5: Corporate Cards controls

“Everyone gets a card, we trust people”, sounds empowering. In reality, it often becomes: “Why did our burn jump 15% last quarter?”. Cards and small recurring spends are where startups quietly bleed out.

Create a simple but strict card and credit policy:

• Card limits by role:
  • Most staff: small monthly limit.
  • Managers/leads: higher limit.
• Approval rules:
  • < €X – manager approval (Slack/email).
  • Between €X and €Y – finance + link to a budget line.
  • €Y – founder approval.
• Weekly transaction review:
  • Once a week, scan card statements.
  • Highlight anything:
    • You don’t recognise.
    • That feels “nice-to-have” in a tight runway context.
• Kill “zombie” subscriptions:
  • Once a month, list active subscriptions.
  • Cancel anything not clearly tied to a current initiative.

The goal isn’t to micro-manage. It’s to avoid death by a thousand cuts.

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Process 6: Track 3–5 Weekly Metrics, Not 20+

You don’t need a “financial cockpit” with 18 charts. You need five numbers that everyone understands and can react to.

Every Monday, in one short message, track:

• Runway (in weeks) – not months.
• Weekly burn – using a 4-week average.
• Collections / DSO – how long customers take to pay you.
• Growth metric – e.g. MRR, GMV, active customers.
• Unit economics proxy – e.g. CAC payback, LTV: CAC, or gross margin.

Example weekly message:

• Runway: 34 weeks (–2) 🔴
• Burn (4-week avg): €52k vs target €45k 🔴
• DSO: 41 days, was 35 🟠
• MRR: €62k, +€3k WoW 🟢
• CAC payback: 7.5 months, target 6 🟠
• Top action: chase 4 overdue invoices (~€38k).

Same format. Same channel. Same time each week. No hiding.

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Process 7: Monthly Financial One-Pager

If your board pack needs its own executive summary, it’s too complicated. A one-page financial summary forces clarity. It’s useful for you, your team, your investors, and potential acquirers.

Structure your one-pager like this:

• Top third – Cash & runway
  • Current cash balance
  • Monthly burn + trend vs budget
  • Runway (in weeks)
• Middle third – Budget variance
  • Where you overspent/underspent
  • Brief explanations (no storytelling)
• Side boxes
  • AR ageing (who owes you money + how long)
  • AP ageing (who you owe)
  • Top 5–10 vendors by spend
• Bottom third – Risks & decisions
  • 3–5 key risks (e.g. customer concentration, upcoming renewals)
  • 3–5 key decisions needed
  • Any odd one-off events

Send it on a fixed day every month, whether anyone asks or not.

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Rule 8: Keep the System repeatable and simple

The goal is to build a tedious, repeatable “finance process” without a single point of failure that anyone can run.

Core elements of a simple finance system:

• Clear rules for spend approvals
  • Who approves what, at what thresholds (see Rule 5).
• Basic purchase order (PO) rule
  • Any contract above €X/year (e.g. €20–25k) gets a PO.
  • This ensures significant renewals are reviewed, not auto-charged.
• Monthly close checklist
  • Same steps, same order, same owners (bank rec, AR/AP reports, payroll check, vendor payments, update 13-week cash flow, create one-pager).
• Simple chart of accounts
  • 15–20 categories max (payroll, contractors, marketing, cloud/software, rent, travel, etc.).
  • If it takes >5 seconds to pick a category → the structure is too complex.
• Tag by team/project
  • Tag every significant expense with a team and an initiative.
  • So you can answer “What did that launch cost?” in 30 seconds.

Document enough that someone new could take over the process in a week.

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Process 9: Adopt a Dilution-Cost Mindset

Every amount you raise costs you a slice of your company forever. Sometimes that’s the right decision, but many founders treat their equity as if there’s an infinite resource.

Before each funding decision, explore more pragmatic alternatives, such as:

“Could I get the same runway by growing revenue or cutting burn instead of giving up ownership?”

Practical ways to think about dilution:

• For any raise, calculate:
  • % ownership you’re giving up.
  • How many months of runway does that truly buy?
• Compare with “internal” options:
  • How much runway do you gain by:
    • Cutting €X in monthly burn.
    • Pushing on revenue-focused experiments.
    • Using a bit of sensible, non-predatory debt.
• Remember:
  • Early rounds (pre-seed / seed / A) are the most expensive in terms of equity.
  • The more disciplined your finances, the more leverage you have when you do raise.

Think in terms of long-term outcomes. Would you rather own 50% of a €20m outcome or 80% of a €10m outcome?

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The Cadence: How to Put This System on Rails

You don’t need a CFO to run this. You need a cadence that keeps you honest.

Daily (5 minutes)

• Check cash in the main account.
• Approve/reject any big spend requests.

Weekly (15–30 minutes)

• Update your 13-week cash flow.
• Post your 5 weekly metrics to your team.
• Identify one concrete action (e.g. “Chase these invoices”, “Pause this spend”).

Monthly (3–4 hours)

• Run your monthly close checklist.
• Create your monthly one-pager.
• Review:
  • Burn vs plan.
  • Runway.
  • Any red/orange flags.
• Decide on any immediate cuts or reallocations.

Quarterly (half-day)

• Refresh your data room.
• Bear/base/bull scenarios on your most significant decisions.
• Revisit:
  • Hiring plans
  • Major contracts
  • Fundraising vs bootstrapping vs debt
  • Card/spend policies

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Let’s get started by taking the first steps needed:

Prioritised these This Week

If this feels like a lot, but starting with these three steps alone will transform how “in control” you are of your business finances:

1. Calculate your true runway
   • Take cash in the bank ÷ average monthly burn.
   • If it’s under 12 months, treat that as a serious red zone.
2. Build a simple 13-week cash flow sheet
   • 13 rows, 4 columns: starting cash, cash in, cash out, ending cash.
   • Update it every Monday for the next 4 weeks. No excuses.
3. Schedule a weekly 15-minute “money standup”
   • Same time every week.
   • Share:
     • Runway (weeks)
     • Weekly burn
     • Collections / DSO
     • Growth metric
     • One unit-economics metric
   • End with one explicit action.

By doing just these three, you’ll already be ahead of most founders who only “check finances” when fundraising… or when it’s already too late.