Finance Manager Job Description for Biotech Startups: Guardian of R&D Capital, Grants, Forecasting

Why Your Biotech Needs More Than a Bookkeeper

Your biotech startup is built on groundbreaking science, but its survival depends on disciplined financial management. As you scale from initial seed funding towards Series A and B rounds, the complexity of your financial operations grows exponentially. Managing grant reporting, R&D capitalization, and long-term forecasting will quickly overwhelm a simple bookkeeping setup. When revenue is years away, your cash runway is your most critical asset. The focus must shift from just recording transactions to strategically planning for major scientific and financial milestones. This requires a specific skill set that sits between a bookkeeper and a full-time CFO, a role perfectly suited for a finance manager. See the Building Your Finance Team hub for more on sequencing key finance hires.

The most common financial setup for an early-stage biotech involves a founder managing the numbers with support from a part-time bookkeeper. This approach is sufficient when the primary tasks are processing payroll and paying vendor invoices. However, this structure becomes a liability as the company secures non-dilutive funding, expands its research programs, and begins planning for clinical development. The critical distinction is one of perspective: a bookkeeper records the past, ensuring transactions are categorized correctly. A finance manager forecasts the future, using that historical data to model scenarios, manage complex compliance, and preserve cash.

From ‘What Did We Spend?’ to ‘What Happens If?’

The right time to hire a finance manager is when your financial questions evolve from retrospective to forward-looking. A bookkeeper will reconcile your bank accounts in QuickBooks or Xero and tell you what you spent last month. A finance manager will build a driver-based financial model to tell you how a six-month delay in a preclinical study impacts your fundraising timeline and cash-out date.

A scenario we repeatedly see is startups failing to track R&D expenses with enough granularity, leading to missed opportunities for valuable tax credits. While a bookkeeper can log an invoice from a supplier, a finance manager ensures that expense is tagged to the correct R&D project, assessed for its eligibility as a qualifying research expense, and incorporated into the financial forecast. This strategic oversight is essential for maximizing your financial resources and navigating the long development path inherent in biotechnology.

The Three Pillars of Biotech Startup Finance Manager Responsibilities

A biotech finance manager's responsibilities are fundamentally different from those in other industries. Their role is built on three specialized pillars: mastering grant compliance, guarding R&D capital, and accurately forecasting a complex, milestone-driven future.

Pillar 1: Master of Grant Funding and Compliance

For many biotech startups, government and foundation grants are a critical source of non-dilutive funding. This capital, however, comes with significant administrative and compliance burdens that can lead to clawbacks or disqualification from future funding if mismanaged. An effective finance manager owns this entire process, ensuring every dollar is tracked, justified, and reported according to strict guidelines.

Establishing Systems for Grant Compliance

In the United States, federal grants from bodies like the NIH, particularly SBIR/STTR awards, are governed by specific compliance rules, such as the Uniform Guidance (2 CFR Part 200). This includes complex requirements like Effort Reporting, where you must meticulously document and certify the percentage of time employees spend on grant-related activities. A finance manager implements robust systems, such as dedicated project codes in the payroll system or specialized time-tracking software, to capture this information accurately.

They are responsible for distinguishing between allowable and unallowable costs from the very beginning. Consider a startup with an NIH grant. The reagents and consumables used for the specified research are allowable direct costs. The legal fees for a new patent filing, while a legitimate business expense, are typically an unallowable cost against that grant. A finance manager implements controls within the accounting system, often in QuickBooks or Xero, to segregate these costs, preventing compliance issues during an audit. They ensure that budgets submitted in grant proposals are realistic and that subsequent spending is tracked against them, providing leadership with clear variance analysis to inform strategic decisions.

Pillar 2: Guardian of R&D Capital and Tax Credits

In a pre-revenue biotech, R&D is not just a department; it is the entire company. Every dollar spent is an investment in creating future value. Poor tracking of these expenses leads to budget overruns, misallocated capital, and forfeited tax credits. The finance manager establishes the financial infrastructure to maximize the value of every R&D dollar and secure crucial tax incentives.

Designing a Biotech-Ready Chart of Accounts

This process starts with a properly structured Chart of Accounts (COA) in your accounting software. Instead of a single generic “R&D Expense” account, a finance manager creates a granular structure that provides deep insight into spending. For example, a biotech COA might include separate sub-accounts for salaries, contractor services, lab consumables, and equipment, with each transaction tagged by a specific research project (e.g., ‘Project Alpha - Preclinical,’ ‘Project Beta - Target ID’). This level of detail is essential for accurate project budgeting and for claiming valuable tax incentives.

Maximizing R&D Tax Credits

Detailed expense tracking is the foundation for claiming government tax incentives. For companies in the United States, US R&D tax credits are governed by Internal Revenue Code Section 41, which defines Qualifying Research Expenditures (QREs). In the UK, companies can leverage the R&D tax relief scheme for qualifying activities. The finance manager understands the nuances of what constitutes a qualifying expense, maintains the contemporaneous documentation required to support the claim, and works with external tax advisors to file accurately. Furthermore, recent changes in US tax law require the capitalization and amortization of R&D expenses under IRC Section 174. This requires careful tracking and adherence to specific accounting treatments, a task far beyond standard bookkeeping. All of these financial activities must align with the prevailing accounting standards, which are typically US GAAP in the United States and FRS 102 in the UK.

Pillar 3: Forecaster of Clinical Trials and Cash Runway

Unreliable financial forecasting can be fatal for a biotech startup. Investors and boards need to see a credible, milestone-based plan that accurately projects costs and cash needs, especially for expensive and lengthy clinical trials. A finance manager moves the company beyond simple, linear forecasts to sophisticated, scenario-based models that reflect the scientific realities of the business.

Beyond Spreadsheets: Driver-Based Financial Modeling

A finance manager builds financial models that are driven by key operational and scientific assumptions. Planning for a future Phase I clinical trial requires forecasting not just a single number but its core components: CRO fees, per-patient costs, site initiation fees, and data management services. Incorporating industry data is key to building a defensible budget. A 2021 report from the U.S. Department of Health and Human Services found the median cost of Phase I clinical trials ranges from $1.4 million to $6.6 million, with Phase II trials ranging from $7.0 million to $19.6 million. A finance manager uses such data as a baseline and adjusts it for the startup’s specific indication, protocol complexity, and geographic location.

Scenario Planning for Clinical Milestones

Most importantly, the finance manager owns scenario analysis. They build models that can answer critical strategic questions for leadership. What happens to our cash runway if patient recruitment is delayed by six months? What is the financial impact of a successful grant application that reduces our need for dilutive funding? How does a change in CRO vendors affect our budget? This dynamic modeling provides leadership with the visibility needed to make proactive decisions about fundraising strategy, pipeline prioritization, and operational adjustments, ensuring the company remains well-capitalized through its next major value inflection point.

Building Your Job Description: Key Biotech Finance Manager Responsibilities

When you are ready to hire, your job description must reflect these specialized responsibilities to attract candidates who understand the unique financial landscape of a biotech startup. Avoid generic corporate finance templates and focus on the skills that truly matter in a pre-revenue, research-intensive environment. You can see how this role fits with other biotech finance teams to plan your hiring roadmap.

Key Responsibilities:

• Grant Management & Compliance: Oversee all financial reporting and compliance for government and foundation grants (e.g., NIH, SBIR/STTR). Manage effort reporting processes, ensure adherence to regulations like the Uniform Guidance, and serve as the primary financial contact for grant-making agencies.
• R&D Finance & Accounting: Develop and maintain a project-based Chart of Accounts in QuickBooks or Xero to track R&D expenses by program. Prepare documentation and schedules to support R&D tax credit claims under IRC Section 41 (US) or the HMRC scheme (UK). Manage accounting for complex areas like Section 174 R&D capitalization.
• Financial Planning & Analysis (FP&A): Own, maintain, and update the company’s long-range financial model. Manage cash runway forecasting, perform scenario analysis for R&D and clinical trial budgets, and prepare monthly budget-versus-actual variance reports for leadership and the board.
• Month-End Close & Reporting: Manage the full month-end close process. Prepare timely and accurate financial statements (P&L, Balance Sheet, Cash Flow Statement) for management, the board of directors, and investors in accordance with US GAAP or FRS 102.
• Treasury & Cash Management: Monitor and manage day-to-day cash balances, execute payments, and forecast short-term cash needs to optimize the company's capital position.

Qualifications & Experience:

• Proven experience in a finance or accounting role within the biotech, pharmaceutical, or life sciences industry is essential.
• Hands-on experience with grant accounting (e.g., NIH, SBIR/STTR) and compliance is strongly preferred.
• Advanced proficiency in financial modeling, forecasting, and scenario analysis in Microsoft Excel.
• Experience with modern accounting systems like QuickBooks Online or Xero.
• Strong understanding of US GAAP or FRS 102 principles as they apply to early-stage, R&D-intensive companies.
• Excellent communication skills, with the ability to explain complex financial concepts to a non-financial audience of scientists and executives.

The Strategic Value of a Finance Manager

Hiring a finance manager is a proactive step to de-risk your company and build a scalable financial foundation for future growth. This role is not an administrative cost center; it is a strategic function dedicated to preserving capital, maximizing financial opportunities, and enabling scientific progress. A great finance manager bridges the critical gap between daily bookkeeping and high-level CFO strategy, ensuring your financial operations can withstand the rigors of grant audits, investor due diligence, and the long, uncertain path to commercialization.

The right time to make this hire is when the complexity of your funding sources and R&D activities begins to outpace a founder’s ability to manage them on spreadsheets. For most biotech startups, this occurs around the Seed or Series A stage, just as the financial stakes become significantly higher and the need for professional financial stewardship becomes undeniable. For a comprehensive overview, visit the Building Your Finance Team hub.

Frequently Asked Questions

Q: At what funding stage should we hire our first finance manager?
A: Most biotech startups find the need for a dedicated finance manager emerges between the Seed and Series A funding rounds. This is typically when the company has secured its first significant grant, is scaling its R&D team, and needs to produce more sophisticated financial models and reports for investors and the board.

Q: Can we outsource the finance manager role?
A: Yes, many early-stage startups use fractional or outsourced finance services to fill this role. This provides access to specialized biotech finance expertise without the cost of a full-time employee. As the company grows and financial complexity increases, it generally becomes more efficient to bring this strategic function in-house.

Q: What is the difference between a finance manager and a controller in a biotech startup?
A: A finance manager is typically more focused on forward-looking activities: financial planning, analysis (FP&A), budgeting, and cash runway modeling. A controller is more focused on historical accounting, ensuring the accuracy of financial records, managing the month-end close, and establishing internal controls. In smaller startups, one person may cover both sets of responsibilities.