Building a Finance Function From Scratch — What Matters, What Doesn’t

When you’re starting up, finance often sits in the backseat. You’re chasing customers, building product, closing your first big deal — spreadsheets and ledgers can wait. Until they can’t.

The day will come when you need more than an accountant sending you GST returns. You’ll need a finance function — a team, a system, and a mindset that supports the business you’re building.

But here’s the thing: building a finance function isn’t just about hiring a CFO and buying software. Done right, it becomes the nervous system of your company — sensing risks, spotting opportunities, and helping you steer with clarity. Done wrong, it becomes a cost centre no one listens to.

So, what really matters? And what doesn’t?

1. Start with the ‘Why’ — Not the Org Chart

Before you think about who to hire, think about why you’re building a finance function. Is it to get investor-ready? To improve working capital? To bring visibility to cash burn? To manage scale?

Your why will decide your what. A SaaS startup gearing for Series A needs different finance muscles than a retail brand managing 50 SKUs and a complex supply chain.

💡 Pro tip: Write down your top 3 outcomes you want finance to deliver in the next 12–18 months. Keep this list visible when making every hire and process decision.

2. Don’t Over-engineer on Day One

Many founders make the mistake of copying a large company’s finance setup. The result? Layers of processes no one follows, tools that gather dust, and reports no one reads.

When you’re small, the finance function should be lean and high-impact:

• A simple, consistent way to record transactions

• A monthly cash flow tracker you can trust

• A way to approve and record expenses

• One source of truth for revenue numbers

Everything else can come later.

3. Hire for Fit, Not Just Skill

In the early days, your first finance hire won’t be a specialist. They’ll be part accountant, part analyst, part firefighter, part therapist.

Look for someone who:

• Understands business beyond debits and credits

• Is comfortable with ambiguity and rapid change

• Can roll up their sleeves and get into the weeds

• Speaks the founder’s language — fast, clear, and outcome-driven

💡 Vision tip: Your first finance hire will shape the culture of your finance team for years. Choose someone whose attitude and values match the DNA you want for your company.

4. Make Finance a Partner, Not a Gatekeeper

Finance shouldn’t just say “No” — it should ask “How?”

When marketing wants to run a risky campaign, or ops wants to try a new vendor, finance should be the co-pilot evaluating ROI, not the policeman shutting things down.

One founder once told me, “The day my finance head started joining product brainstorms, our margins went up.” Finance must be part of the conversation early, not the department you loop in after the fact.

5. Bond the Team Around the Business, Not Just the Books

If your finance team never leaves their spreadsheets, they’ll never fully understand the levers of your business.

Encourage them to:

• Visit stores, factories, or talk to customers

• Sit in on sales calls or marketing reviews

• Join leadership off-sites

When finance understands the “why” behind the numbers, their advice becomes sharper — and the rest of the company trusts them more.

6. Invest in Tools That Match Your Stage

You don’t need SAP if you’re doing ₹5 crore a year. But you also shouldn’t run payroll on Excel if you’ve got 50 employees.

Choose tools that:

• Integrate well with your other systems

• Can scale without constant replacement

• Give you real-time insights, not just historical reports

💡 Practical learning: Switching ERPs mid-scale-up is expensive and painful. Choose software you can grow into, not out of in a year.

7. Avoid These Common Traps

• Over-reporting: Drowning in 20 dashboards no one reads

• Under-communicating: Surprising leadership with bad news too late

• Hiring too late: Bringing in finance only after investors ask tough questions

• Treating finance as compliance-only: Missing out on their strategic value

The Endgame: Finance as a Growth Engine

When built with intention, your finance function doesn’t just “keep the books.” It becomes the engine that:

• Spots inefficiencies before they hurt

• Helps you raise capital on the right terms

• Guides decisions that keep you sustainable and profitable

The founder-finance relationship at this stage is like a great doubles partner in tennis — you cover each other’s blind spots, anticipate each other’s moves, and play to win.

In short: Build it right, and finance won’t just count your growth. It will help create it.