Series A Financial Operations: Building the Right Infrastructure

# Series A Financial Operations: Building the Right Infrastructure

You just closed Series A. The wire hit your account. Your team's excited. Your investors are aligned. Everything feels like it should be smooth sailing.

Then the finance problems start appearing.

You realize your expense tracking is a spreadsheet nightmare. Your accounting system was built for a pre-launch startup, not a team of 25. Your CFO hire from three weeks ago is asking questions you can't answer about your cash flow. Your revenue recognition is... unclear. Your board is asking for monthly metrics that take your finance person two days to cobble together from five different tools.

This is where most Series A companies hit their first operational crisis—not because of product problems or market problems, but because the financial infrastructure built for 8 people doesn't scale to 40.

## The Series A Financial Operations Reality Check

Here's what we see repeatedly in our work with post-Series A startups: founders treat financial operations like something to check off a list. You hire a finance person. You upgrade your accounting software. You're done.

That approach leaves you vulnerable to the exact problems that derail growth companies.

Financial operations isn't just "having accounting." It's the **entire set of systems, processes, and controls** that turn raw financial data into decision-making information. It's what lets you:

- Know your actual cash position at any given moment (not three weeks later)
- Make pricing and hiring decisions based on unit economics that you trust
- Spot operational problems before they become crises
- Provide investors with consistent, accurate metrics
- Scale without recreating your systems every six months

Most Series A companies are missing pieces of this. Not because founders are negligent—but because the gaps aren't obvious until they cost you.

## The Hidden Cost of Uncoordinated Systems

Let's be concrete about what we see in the first 90 days after Series A funding:

**Your revenue records live in multiple places.** You have Salesforce for pipeline. You have Stripe or Braintree for transactions. You have Quickbooks for recorded revenue. You have a spreadsheet for annual contracts that don't fit neatly into your normal billing. When your board asks, "What was our ARR this month?" the answer depends on who you ask.

**Your expenses are genuinely hard to track.** You have corporate credit cards. You have employee expense reports submitted weeks late. You have vendor invoices that arrive sporadically. You have AWS charges that nobody disputes because the finance person doesn't understand what's being billed. You're not stealing money—you're just flying blind on spend.

**Your bank account tells a different story than your software.** Your accounting system says you have $X in revenue. Your bank balance is $Y. The difference is a mystery that takes three hours and an argument with your accountant to unravel. It's usually timing. Or ACH delays. Or uncategorized deposits. But you never know until you dig.

**Payroll surprises happen.** You hired faster than you budgeted. Taxes owed are higher than you modeled. You didn't budget for benefits administration costs. Your finance person catches these 10 days before you run out of money.

None of these are catastrophic individually. But together, they create a situation where you can't trust your own numbers. And if you can't trust your numbers, you're making decisions blind.

## Building Your Series A Financial Operations Stack

Here's what we recommend putting in place immediately after Series A, in order of priority:

### 1. Master Revenue Recognition Process

This is non-negotiable. Your revenue recognition policy needs to be **documented, consistent, and audit-ready**.

What this means:

- If you're SaaS, define exactly when revenue is recognized (contract signed? payment received? service delivered?)
- If you're selling multiple products, define how you split revenue between them
- Create a monthly revenue reconciliation workflow: Salesforce pipeline → signed contracts → revenue records → Quickbooks
- Identify what counts as revenue vs. what's a liability (free trial credits, annual contracts billed monthly, usage overages, etc.)

We've watched Series A companies record revenue differently month-to-month because the rules were implicit, not explicit. One month your controller recognizes annual contracts upfront. Next month they recognize monthly. Your board sees a revenue cliff that doesn't exist.

Document this once. Review it quarterly. Update it only when something fundamentally changes about your business model.

### 2. Cash Flow Forecasting That Connects to Reality

Your financial model probably projects cash flow beautifully. It's probably also wrong.

Here's what we recommend: create a **13-week rolling cash flow forecast** that updates weekly. Not quarterly. Not monthly. Weekly.

Why? Because at Series A, timing matters. A customer's payment can be 15 days late. You can hire someone on unexpected notice. A vendor's contract terms can shift. A large refund request can arrive. The 13-week window gives you early warning without getting lost in quarterly planning.

This forecast should include:

- Cash in (customer payments, invoice dates, historical payment timing)
- Cash out (payroll, vendor payments, tax obligations, planned spend)
- Timing gaps (when money is owed vs. when it lands)

Then—and this is critical—reconcile this forecast to your actual bank balance weekly. If your forecast says $500K and your bank shows $480K, you need to understand why within 24 hours. Usually it's a timing reconciliation. Sometimes it's an error. Either way, you need to know.

### 3. Unit Economics Measurement That Doesn't Lie

You probably track CAC and LTV. We bet you're calculating them wrong.

The problem: CAC and LTV are incredibly easy to measure incorrectly, and the errors compound. [The CAC Timing Trap: When Your Customer Acquisition Cost Is Actually Much Higher](/blog/the-cac-timing-trap-when-your-customer-acquisition-cost-is-actually-much-higher/) explains this in detail, but the core issue is that the timing of when you spend money vs. when you recognize revenue creates distortions.

At Series A, you need:

- **Documented unit economics definitions** for your business (how you calculate CAC, LTV, payback period, etc.)
- **Cohort tracking** so you understand how unit economics change over time
- **Monthly review** of actual results vs. model assumptions

This is where we see the biggest gaps. Founders track metrics, but they change the definitions quarterly. Or they use different denominators. Or they exclude certain customer segments because "those are different."

Pick your definitions. Write them down. Stick with them for a year.

### 4. Expense Management and Cost Allocation

You can't optimize what you don't measure. And most Series A companies don't really measure where money is going.

Set up a simple cost allocation model:

- **By department** (engineering, sales, marketing, operations)
- **By function** (direct costs, overhead, tools/software)
- **Monthly review** of spend vs. budget

This doesn't require complex accounting. It requires discipline: every expense gets categorized consistently. Every month, you review it. You notice if marketing spend jumped 40% and understand why.

Most Series A companies skip this. Then they get to Series B with no idea what engineering really costs them, or whether their sales team is efficient, or which tools are actually necessary.

### 5. Reporting Discipline

Pick your core metrics. Probably no more than 8-10.

We see founders track 30+ metrics because "we might need this data." You don't need 30 metrics. You need the 8 that actually drive decisions:

- Monthly recurring revenue (MRR) / Annual recurring revenue (ARR)
- Customer acquisition cost (CAC)
- Lifetime value (LTV)
- Cash balance
- Monthly burn rate
- Runway
- Unit economics (payback period, CAC:LTV ratio)
- Gross margin

Create a **simple one-page dashboard** that updates monthly. This is what your CEO sees. This is what you review with your board.

Everything else is supporting analysis.

## The Infrastructure Gaps We See Repeatedly

### Gap #1: No Clear Ownership of Reconciliation

Someone needs to own cash reconciliation. Someone needs to reconcile revenue. Someone needs to own expense categorization.

If "someone" is "everyone," it's really "no one."

Assign explicit ownership. Make it someone's job to reconcile your bank account to your accounting software weekly. If there's a discrepancy, they own fixing it or escalating it.

[The Cash Flow Reconciliation Gap: Why Your Bank Balance Doesn't Match Your Model](/blog/the-cash-flow-reconciliation-gap-why-your-bank-balance-doesnt-match-your-model/) covers this in depth, but the short version: discrepancies grow. Solve them immediately.

### Gap #2: Audit Trail Failures

When you're 8 people, you can remember why an expense was coded a certain way. When you're 40, you can't.

Every transaction should have:

- Who entered it
- When it was entered
- Why it was categorized that way
- What it relates to (project, customer, vendor)

Your accounting software should capture most of this automatically. Your job is making sure people actually use it.

### Gap #3: Accrual vs. Cash Blindness

You record revenue accrual-basis. You spend cash basis. This creates cognitive dissonance.

You had a great revenue month (accrual). But customers haven't paid yet. You actually spent more cash than you earned. Your founder sees the revenue number and authorizes hiring. Three weeks later, the cash hasn't arrived and you're scrambling.

[The Cash Flow Timing Mismatch: Why Your Accrual Revenue Hides a Liquidity Crisis](/blog/the-cash-flow-timing-mismatch-why-your-accrual-revenue-hides-a-liquidity-crisis/) digs into this, but the solution is simple: track both. Your monthly board report should show accrual revenue AND cash collected. Show the gap. Make it visible.

### Gap #4: No Integration Between Finance and Operations

Your finance person sits in meetings and hears about customer wins, hiring plans, and product roadmap in real-time.

Or they don't.

If your CFO/finance person isn't in weekly operations meetings, your financial forecasting is already stale. They need to hear about new enterprise deals. They need to know you're hiring 5 engineers next month. They need to understand that customer churn spiked because of a product bug.

Make finance part of your operational rhythm, not a separate function that processes transactions.

## Series A Financial Operations Is a Competitive Advantage

Here's what separates Series A companies that scale efficiently from those that burn money and struggle:

It's not talent. You can hire a great finance person.

It's not tools. You can buy expensive software.

It's **clarity on where money flows and why**.

Companies with real financial operations visibility scale faster. They optimize unit economics earlier. They make hiring and product decisions based on data instead of intuition. They don't get surprised by cash crises because they see them coming.

Building this infrastructure now—in the first 90 days after Series A—saves you from rebuilding it later. And more importantly, it gives you decision-making information that actually drives growth.

## Your Next Steps

Start here:

1. **Document your revenue recognition policy** (if you haven't already)
2. **Reconcile your accounting records to your bank account** and understand every discrepancy
3. **Create a 13-week cash flow forecast** and update it weekly
4. **Assign explicit ownership** of financial operations to someone on your team
5. **Build a simple dashboard** of 8-10 core metrics

Don't try to do everything at once. Start with clarity on cash flow and revenue. Build from there.

If you want an unbiased look at where your financial operations have gaps, [Inflection CFO offers a free financial audit](/contact) for post-Series A companies. We'll review your systems, identify risks, and give you a prioritized roadmap for what to fix first.

The goal isn't perfect finance. It's **trustworthy finance**—systems and processes that let you make decisions with confidence.