I once took on a client — a high-growth tech startup called GeoVS — that had no finance function at all. No management accounts. No chart of accounts. No controls. No cash flow forecasting. The founder, a brilliant technologist, was running the company's finances from a combination of his bank app, a spreadsheet he'd started two years earlier and stopped updating, and memory.
He wasn't negligent. He was busy building a product, winning customers, and trying to hire developers in a market where everyone was trying to hire developers. Finance was the thing he'd get to next quarter. It had been "next quarter" for about six quarters.
This is more common than people think. And I say this without judgement, because the instinct to focus on product and customers is exactly right.
The problem is that "no finance function" doesn't stay harmless. It compounds.
And by the time it becomes a crisis — a failed funding round, a cash shortfall nobody saw coming, an HMRC inquiry — the cost of fixing it is dramatically higher than the cost of building it properly in the first place.
I worked with GeoVS on a fractional basis for several years. We built the entire finance function from scratch, secured over £2M in VC and grant funding, achieved zero audit qualifications across the whole period, and ultimately I led the company through its sale — due diligence, data room, negotiations, completion. The founder later told me: "As a first-time founder I didn't know what I didn't know about finance, investments, grants, VCs, reporting and taxes. I'd have been completely lost without Anna."
This article is everything I learned from that engagement and others like it. The sequence. The priorities. The things that actually matter versus the things that can wait.
Why founders avoid finance
Let's be honest about this. Most founders started their companies because they're good at something — technology, design, sales, a specific domain. Nobody started a company because they were excited about month-end reconciliations.
Finance feels like overhead. It feels like bureaucracy. It feels like the opposite of the fast, scrappy, build-things-and-ship-them culture that makes startups work. And in the very early days, when it's two people and a credit card, that instinct is mostly correct. You don't need a chart of accounts when you have twelve transactions a month.
But companies grow. And finance complexity doesn't scale linearly — it scales exponentially. You hire people, and suddenly there's payroll, pensions, employment taxes. You win a grant, and now there's reporting obligations and eligible expenditure tracking. You raise VC funding, and investors want monthly reporting packs. You start selling internationally, and there's multi-currency accounting and VAT registration thresholds.
Each of these individually is manageable. Together, without a system to handle them, they become a tangle that eats founder time, creates risk, and — most damagingly — leads to decisions made on bad information.
What "no finance function" actually looks like
I've seen enough of these to describe the pattern. It's remarkably consistent across companies and sectors.
The bank account is the accounting system. Cash in the bank equals "we're fine." Cash getting low equals "we need to invoice someone." There's no distinction between revenue and cash, no understanding of accruals, no visibility into what's been committed but not yet paid.
The bookkeeping is either months behind or has been done by someone whose qualifications extend to "being good with numbers." No offence to those people — they're often incredibly capable in other areas. But bookkeeping done badly is worse than bookkeeping not done at all, because it creates a false sense of having financial information when what you actually have is unreliable data.
VAT returns are filed, usually late, by an external accountant who has minimal context on the business. Year-end accounts are prepared reactively, often with surprises. Nobody knows the company's burn rate with any precision. Nobody knows what the cash position will be in three months. The founder is making investment decisions based on gut feel, which works until it doesn't.
At GeoVS, the first thing I did was a full financial health check. It took about a week. The founder's response was something along the lines of: "I didn't know it was that bad." It usually isn't catastrophic — it's just that nobody has been watching, and entropy does its thing.
The minimum viable finance function
You don't need to go from nothing to a fully staffed finance department overnight. You need the financial equivalent of an MVP: the minimum set of things that give you control, visibility, and credibility.
Here's what that looks like:
A proper set of books. Current, accurate, reconciled. This is non-negotiable. If your books aren't up to date, everything else — reporting, forecasting, funding applications — is built on sand.
A chart of accounts designed for your business. Not the default one that came with your accounting software. One that reflects your revenue streams, your cost structure, and the way you need to see your numbers. Getting this right early saves enormous pain later. I've seen companies three years in still using a generic chart of accounts that makes it impossible to understand gross margin by product line.
Monthly management accounts. Not annual. Not quarterly. Monthly. A profit and loss, a balance sheet, and a cash flow statement, produced within 10-15 business days of month end. This is how you see problems before they become crises.
A cash flow forecast. At minimum, 13 weeks rolling. This is the single most important financial tool for any early-stage company.
More startups die of cash starvation than of anything else. You need to see what's coming.
Basic controls. Approval workflows for payments. Segregation between who raises invoices and who approves them. A process for expense claims. These aren't bureaucracy — they're how you prevent the mistakes and fraud that sink small companies.
That's it. That's your MVP. Everything else — investor reporting, budgeting, scenario modelling — builds on top of these foundations.
The sequence: what to build and when
Order matters here. I've done this enough times to know that building things in the wrong sequence creates rework and frustration. Here's the order I follow.
Step 1: Clean up the books and bank accounts. Get the bookkeeping current. Reconcile every bank account. Fix whatever the previous bookkeeper got wrong. Set up proper bank feeds into your accounting software. This is unglamorous, sometimes tedious work, and it's the foundation everything else sits on. At GeoVS, this took about three weeks of concentrated effort. There were two years of transactions to work through.
Step 2: Design the chart of accounts. Build a chart of accounts that reflects how the business actually operates. Revenue broken down by meaningful categories. Cost of sales separated from overheads. R&D expenditure tracked in a way that supports potential tax claims. This requires understanding the business, not just the accounting — which is why it needs to involve someone who asks questions about the commercial model, not just someone who knows debits and credits.
Step 3: Monthly reporting. With clean books and a sensible chart of accounts, you can now produce meaningful management accounts. Start simple: P&L, balance sheet, cash flow, and a one-page commentary that explains what happened and why. The commentary matters. Numbers without narrative are just numbers. The founder needs to understand what the numbers mean for the business.
Step 4: Controls. Now that you have a reporting rhythm, put controls around it. Payment approval processes. Journal approval. Bank reconciliation sign-off. Expense policies. These don't need to be heavy. They need to exist. A two-person startup needs different controls than a fifty-person company, but both need some.
Step 5: Cash flow management. Build a proper cash flow forecast. At GeoVS, this became the most-used financial tool in the business. The founder went from checking his bank app nervously to knowing, with reasonable confidence, what the cash position would be 13 weeks out. That changes how you make decisions. You hire with confidence instead of anxiety. You invest in growth knowing you can afford it.
Step 6: Investor and grant reporting. If you're funded or applying for funding, you need reporting that meets investor and grant body expectations. This isn't the same as management reporting — it's a specific format, with specific KPIs, delivered on a specific schedule. But if you've done steps 1-5 properly, this is just repackaging information you already have. If you haven't done steps 1-5, this is where the pain becomes acute, because you're trying to produce credible investor reports from unreliable data.
The funding angle
This is where it gets commercially important. VCs, angel investors, and grant bodies all need to see financial rigour. Not because they enjoy reading spreadsheets (some do, but that's another matter), but because financial discipline is a proxy for management quality.
When I was helping GeoVS secure VC funding, the quality of our financial reporting was explicitly cited as a positive factor. The investors could see that the numbers were reliable, the forecasts were grounded in reality, and there was someone credible overseeing the finances. That's not a nice-to-have. That's a prerequisite.
Grant funding is even more demanding. Innovate UK, Horizon Europe, and similar bodies require detailed financial reporting against eligible expenditure categories. If your finance function can't track costs at that level of granularity, you either can't apply for the grant or you can't claim the money you're entitled to. I've seen companies leave tens of thousands of pounds on the table because they couldn't evidence their expenditure to the required standard.
At GeoVS, we secured over £2M across VC rounds and grants. That wasn't because the product wasn't good enough to win on its own merits — it was. But good product with poor financial governance doesn't get funded. Investors have been burned too many times.
Hire, outsource, or go fractional
This is the question every founder asks, and the answer depends on where you are.
Pre-revenue to about £1m revenue: You don't need a full-time finance person. You need a good bookkeeper (outsourced is fine, 1-2 days a week) and a fractional CFO who can set up the structure, produce the reporting, and provide strategic input. This is the model I used at GeoVS for the first couple of years. Total cost: significantly less than a full-time hire, with significantly more capability.
£1m to about £5m revenue: You probably need a part-time or full-time bookkeeper/management accountant in-house, plus a fractional CFO. The volume of transactions and the complexity of the business now justify someone being closer to the day-to-day. But you still don't need a full-time CFO, and you probably can't afford one at the level of experience you actually need.
£5m and above: You're approaching the point where a full-time finance hire at a senior level makes sense. But even here, a fractional CFO can bridge the gap while you recruit, or can provide specific expertise — funding rounds, exit preparation, system implementations — that a permanent hire may not have.
The mistake I see most often is founders hiring too junior too early.
They bring in a bookkeeper and expect strategic finance. Or they hire a finance manager and expect CFO-level insight. The result is a finance function that processes transactions but doesn't inform decisions. Getting the seniority right matters more than getting the headcount right.
What good looks like at each stage
Seed stage: Books are current and reconciled. Monthly P&L produced. Cash flow forecast maintained. Founder can tell you the burn rate and runway without checking anything. Grant and investor reporting delivered on time.
Series A / post-first-institutional-funding: Full monthly management accounts with commentary. 13-week rolling cash flow forecast. Budget in place with variance analysis. Board reporting pack that investors actually read. Controls appropriate to the size of the team. Clean audit or independent review.
Growth stage / pre-exit: Everything above, plus: scenario modelling. Departmental or project-level P&L. Working capital management. A finance function that can withstand due diligence scrutiny. At GeoVS, by the time we reached the company sale, the finance function was robust enough to go through full buyer due diligence with zero audit qualifications. That doesn't happen by accident. It happens because you built it right from the start.
The goal
The goal of a finance function in a startup is not to create work for accountants. It's to give the founder the information and confidence to make good decisions, and to create the financial credibility that unlocks funding and, eventually, a successful exit.
Done properly, the founder shouldn't have to think about finance daily. They should receive a monthly pack that tells them what they need to know. They should have a cash flow forecast that lets them sleep at night. They should have someone they trust handling the detail so they can focus on building the business.
At GeoVS, that's exactly what we achieved. The founder focused on product, customers, and growth. I handled the finance. When it came time to sell the company, the finance function was an asset, not a liability. The due diligence was clean. The data room was ready. The deal completed.
That's what good looks like. And it starts with getting the basics right, in the right order, as early as you can.
If you're building from scratch and want an honest assessment of where you are, the Finance Diagnostic is the right starting point — it takes 2–3 weeks and gives you a clear, prioritised picture of what to fix first. For more on the person who'd be doing this work, the About page covers the background and credentials in full.
