{"id":6836,"date":"2015-02-19T21:43:13","date_gmt":"2015-02-19T21:43:13","guid":{"rendered":"https:\/\/itnigblog.live-website.com\/?p=6836"},"modified":"2020-06-11T13:23:06","modified_gmt":"2020-06-11T13:23:06","slug":"the-importance-of-financial-management-in-a-startup","status":"publish","type":"post","link":"https:\/\/itnig.net\/blog\/the-importance-of-financial-management-in-a-startup\/","title":{"rendered":"The Importance Of Financial Management in a Startup"},"content":{"rendered":"<p id=\"8341\" class=\"graf graf--p graf-after--h3\">Startups in Spain tend to\u00a0<strong class=\"markup--strong markup--p-strong\">trivialize the importance of the financial management<\/strong>\u00a0of its businesses, and often look down on it, considering it a \u201csimple number producing\u201d activity related to \u201cgestor\u00edas\u201d (agencies that undertake administrative work).<\/p>\n<p id=\"6e4f\" class=\"graf graf--p graf-after--p\">But companies who care for having a first class finance management from the beginning have some clear<strong class=\"markup--strong markup--p-strong\">\u00a0strategic advantages<\/strong>:<\/p>\n<ul class=\"postList\">\n<li id=\"240e\" class=\"graf graf--li graf-after--p\"><strong class=\"markup--strong markup--li-strong\">Efficiency<\/strong>: Releases time from other key positions of a startup\u200a\u2014\u200afounders, CEO\u2019s, CTO\u2019s, CPO\u2019s, Sales Directors\u200a\u2014\u200awho otherwise have to do financial management in a partial, reactive and non professional way.<\/li>\n<li id=\"705d\" class=\"graf graf--li graf-after--li\"><strong class=\"markup--strong markup--li-strong\">Data analysis<\/strong>: Beyond the \u201csimple number producing\u201d label, the company becomes a data-driven organization, managed by information and data. Data rigorously analyzed, linked and integrated that keep the board well informed, adding value and guiding the strategic decisions.<\/li>\n<li id=\"bfe1\" class=\"graf graf--li graf-after--li\"><strong class=\"markup--strong markup--li-strong\">Organization processes<\/strong>: Process is everything! With a sound base of financial and non-financial metrics, the company can adopt a rigorous and standardized weekly and monthly operational cadence. The Board and the Board of Directors ensure that the strategy is implemented and that any significant variation is discussed, debated and, if necessary, corrected.<\/li>\n<li id=\"1797\" class=\"graf graf--li graf-after--li\"><strong class=\"markup--strong markup--li-strong\">Visibility<\/strong>: To third parties\u200a\u2014\u200ainvestors, strategic partners and financial partners\u200a\u2014\u200aa level of confidence is transmitted when the company has a strong and professional financial management.<\/li>\n<\/ul>\n<p id=\"a1ac\" class=\"graf graf--p graf-after--li\">Here are the answers to some frequently asked questions:<\/p>\n<p id=\"8665\" class=\"graf graf--p graf-after--p\"><strong class=\"markup--strong markup--p-strong\">I do not have CFO, so what?<br \/>\n<\/strong>Many companies make the mistake of assimilating a professional financial management to large and complex enterprises. Nothing could be further from the truth. There is a clear advantage to professionalizing the role from day one\u00a0.<\/p>\n<p id=\"89e0\" class=\"graf graf--p graf-after--p\"><strong class=\"markup--strong markup--p-strong\">Now or later?<\/strong><br \/>\nNow! The main reason for delaying the decision of professionalizing the financial tasks of a company is usually the cost, since it is not a function of the front office. Companies that pay attention to financial management from day one are able to scale their operations better. Instead, those companies that wait to succeed, often discover that they professionalized their financial department too late.<\/p>\n<p id=\"a338\" class=\"graf graf--p graf-after--p\"><strong class=\"markup--strong markup--p-strong\">Common mistakes:<\/strong><\/p>\n<ol class=\"postList\">\n<li id=\"de6c\" class=\"graf graf--li graf--startsWithDoubleQuote graf-after--p\">\u201cWe are facing a shaky and not cohesive organization with respect to key metrics\u201d.<\/li>\n<li id=\"474f\" class=\"graf graf--li graf--startsWithDoubleQuote graf-after--li\">\u201cWe must walk the path of one year in only one month\u201d.<\/li>\n<li id=\"7b23\" class=\"graf graf--li graf--startsWithDoubleQuote graf-after--li\">\u201cThere were mistakes in the initial approach of the company that are now expensive, slow and delicate to fix\u201d.<\/li>\n<li id=\"8ea8\" class=\"graf graf--li graf--startsWithDoubleQuote graf-after--li\">\u201cIn an emergency such as a financing round or an internationalization process, the finance area may not respond adequately and quickly enough\u201d.<\/li>\n<\/ol>\n<p id=\"5e10\" class=\"graf graf--p graf-after--li\"><strong class=\"markup--strong markup--p-strong\">Having a \u201cgestor\u00eda\u201d is not enough?<\/strong><br \/>\nNo. The accounting data is not directly interpretable by the business and, in any case, someone should do the job of adding non-financial metrics, interpret them, report them and discuss them appropriately with the board. Raw data do not add value.<\/p>\n<p id=\"f21e\" class=\"graf graf--p graf-after--p\"><strong class=\"markup--strong markup--p-strong\">What is the difference between the financial management in a small company and the one we might have later, once we succeed?<br \/>\n<\/strong>Essentially the cost and the flexibility, not the quality. On each growth-phase of a company, complexity and business success requires a CFO model adapted to it. But maintaining the common elements that we discussed earlier in this post. It is a mistake to wait for the company to succeed to change from an external financial agency to an internal CFO, who is capable of dealing with a millionair financing round or sell the business. The change is too abrupt, and the results do not occur as quickly as the company would like\u00a0.<\/p>\n<p id=\"9d32\" class=\"graf graf--p graf-after--p\">Given the need for a startup to have a\u00a0<strong class=\"markup--strong markup--p-strong\">professional financial management service<\/strong>, we have identified the following\u00a0<strong class=\"markup--strong markup--p-strong\">solutions<\/strong>:<\/p>\n<ol class=\"postList\">\n<li id=\"7a18\" class=\"graf graf--li graf-after--p\">The startup has a\u00a0<strong class=\"markup--strong markup--li-strong\">CFO who is also a co-founder<\/strong>\u00a0and who knows and wants to grow with the company. This CFO cost should be aligned with the initial business needs.<\/li>\n<li id=\"318f\" class=\"graf graf--li graf-after--li\">The startup has<strong class=\"markup--strong markup--li-strong\">\u00a0an independent CFO<\/strong>\u00a0<strong class=\"markup--strong markup--li-strong\">who can growth with the company<\/strong>. He\/she has to be able to gradually adapt to new situations, challenges and complexities. And the company has to be able to retain him\/her!<\/li>\n<li id=\"8709\" class=\"graf graf--li graf-after--li\">The startup has a\u00a0<strong class=\"markup--strong markup--li-strong\">service support tailored in terms of commitment and cost<\/strong>. This service provides the support needed on every life stage of the company and it is able to scale with the business.<\/li>\n<\/ol>\n<p id=\"8980\" class=\"graf graf--p graf-after--li\"><em class=\"markup--em markup--p-em\">This post appeared first on\u00a0<\/em><a class=\"markup--anchor markup--p-anchor\" href=\"http:\/\/delvy.es\/importancia-direccion-financiera-startup\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-href=\"http:\/\/delvy.es\/importancia-direccion-financiera-startup\/\"><em class=\"markup--em markup--p-em\">Delvy Law &amp; Finance blog<\/em><\/a><em class=\"markup--em markup--p-em\">, on February, 3 2015<\/em><\/p>\n<p id=\"3a26\" class=\"graf graf--p graf-after--p graf--trailing\">***<br \/>\nby\u00a0<a class=\"markup--anchor markup--p-anchor\" href=\"https:\/\/www.linkedin.com\/in\/xaviersanso\" target=\"_blank\" rel=\"noopener noreferrer\" data-href=\"https:\/\/www.linkedin.com\/in\/xaviersanso\">Xavier Sans\u00f3<\/a><br \/>\nCFO at\u00a0<a class=\"markup--anchor markup--p-anchor\" href=\"http:\/\/delvy.es\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-href=\"http:\/\/delvy.es\/\">Delvy Law and Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Startups in Spain tend to\u00a0trivialize the importance of the financial management\u00a0of its businesses, and often look down on it, considering it a \u201csimple number producing\u201d activity related to \u201cgestor\u00edas\u201d (agencies that undertake administrative work). But companies who care for having a first class finance management from the beginning have some clear\u00a0strategic advantages: Efficiency: Releases time [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-6836","post","type-post","status-publish","format-standard","hentry","category-startups"],"_links":{"self":[{"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/posts\/6836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/comments?post=6836"}],"version-history":[{"count":1,"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/posts\/6836\/revisions"}],"predecessor-version":[{"id":9664,"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/posts\/6836\/revisions\/9664"}],"wp:attachment":[{"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/media?parent=6836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/categories?post=6836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itnig.net\/blog\/wp-json\/wp\/v2\/tags?post=6836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}