Common pitfalls as an early finance hire and how you can avoid them
Being an early finance hire at your startup doesn't come without its set of challenges. We run through common pitfalls, how to manage them, and how you can succeed in your role. This blog is a follow up to our first article 'Your first 90 days as a start-up finance leader'.
Alex Millar, CPA
September 1, 2021
As an early finance hire, you're in charge of many finance functions at your startup. The challenge is both exciting and frightening. Your CEO and the board of directors rely on you to meet fundamental finance responsibilities. Things like reporting, legal and compliance might be part of your work. On top of this, you're also expected to be a business partner who adds value. The glory of being a finance leader doesn't come without its challenges. In this article, we shed some light on the best ways to operate as an early finance hire, featuring tips from Warwick Donaldson at Nutromics and Iva Charlopova at Brighte.
Communication is key
Miscommunications are common in the workplace, especially when working remotely. To combat this, make it a principle to overcommunicate. Open the discussion by asking questions to the relevant stakeholders. Some examples include 'Have I missed anything?', 'Let me know if you need me to clarify further.' Where possible, hop on a short call and answer any questions then and there. Be proactive and make sure you're aligned with the wider company.
Don't wait until something is perfect before asking for feedback. Communicate clearly and often to make sure you're focusing on the right priority. You can waste a lot of time (and go totally in the wrong direction) - Iva Charlopova, Senior Finance Manager at Brighte
Make stakeholder communication a priority
Make it a point to build relationships with all the relevant stakeholders. Ask them about their pain points, challenges and how finance can support them. This will help propel the trajectory of company success, as you're able to effectively work together to reach a shared goal. Schedule regular meetings and ask for feedback where possible.
Build relationships with startup finance professionals
Leverage your professional network and peers in similar startup/scale-up ecosystems. Speak to others who are connected with the startup (investors, previous employees if they are within your network). If you're looking for a space to connect with other startup finance leaders, consider joining our Finance in Tech community. Our network of 450+ finance leaders provides crowdsourced opinions and knowledge share on accounting and non-accounting questions.
Beware of New Broom Syndrome
Jumping in without all the information may cause bigger problems down the road. If you are too quick to judge and start establishing new procedures, it may backfire. How can you make the right decisions when you don't have the right information? Identify the strengths and weaknesses of the existing systems but beware of ripping out a process prematurely. Be respectful of your predecessor's work. After understanding the business and analysing its functions, then proceed with changing pre-established procedures. Discuss changes with management and other stakeholders.
Draw on the breadth of experience of colleagues, contractors and outsourced functions (like your accountant and bookkeeper) to help you navigate your first finance leadership role. - Warwick Donaldson, Finance, Operations and Investor Relations at Nutromics
Set realistic expectations
As an early finance hire, it's easy to be overwhelmed by the volume of work. If you haven't been clear on what you are realistically able to achieve, it can be highly stressful when you're not able to meet expectations. Be clear on what you can do given your time, budget, and resources. Ensure you let stakeholders know, so you can get as much support as possible.
It's not uncommon for you to do tedious finance tasks. However, if there is too much to be done, it will become unsustainable. Be comfortable asking for more hands-on-deck. Communicate this clearly to your stakeholders and work together to reach a viable solution. This may mean negotiating a budget for more finance hires or outsourcing work.