Finance Manager Job Description for E-commerce Startups: Cash Conversion, Unit Economics, and Compliance

Why Your E-commerce Startup Needs a Finance Manager

As an e-commerce founder, you have mastered the art of growth. Sales are climbing, orders are flowing through Shopify, and your brand is gaining traction. Yet, a sense of unease creeps in. Your bank account balance does not seem to reflect the sales numbers, and spreadsheets are becoming a tangled web of inventory data, ad spend, and shipping costs. This is a common turning point. The need for a dedicated finance manager in e-commerce typically emerges between $1M and $5M in annual revenue. For guidance on structuring your team, see our Building Your Finance Team hub.

While a bookkeeper keeps the records tidy and an external accountant files taxes, neither can provide the forward-looking, operational insights required to navigate the complexities of physical product sales. You need a strategic co-pilot focused on financial operations and strategy, not just historical reporting. This role is about translating sales data into a sustainable financial plan for growth.

Foundational Understanding: Why E-commerce Finance is a Different Beast

Unlike SaaS finance, which centers on recurring revenue and customer acquisition costs, e-commerce finance is fundamentally about managing the flow of physical goods. The core challenge is managing working capital for online stores. Every dollar of revenue is preceded by a significant cash outlay for inventory. This creates a critical distinction between profit on a Profit and Loss (P&L) statement and actual cash in the bank.

A business can be profitable on paper yet fail due to cash being perpetually trapped in its operating cycle. Your first finance hire must have deep experience in a consumer packaged goods (CPG) or direct-to-consumer (DTC) brand, not a generic background in professional services. They need to intuitively understand inventory, supply chains, and the specific unit economics that drive an e-commerce business. The reality for most e-commerce startups is more pragmatic: they need a hands-on operator who can manage details, not just a high-level strategist.

The Three Pillars of an E-commerce Finance Manager Role

The ecommerce finance manager responsibilities can be organized into three core pillars. These pillars directly address the most common financial pain points that scaling e-commerce brands face: managing cash flow, ensuring profitable growth, and building a scalable financial infrastructure.

Pillar 1: Master of the Cash Conversion Cycle

An e-commerce business lives and dies by its cash flow. The first and most critical responsibility for a finance manager is to take control of it. This means moving beyond historical P&L statements and building a robust, forward-looking cash forecast. A common pain point for founders is converting volatile sales and inventory data into accurate forecasts; this is where the finance manager's expertise becomes invaluable.

Their primary tool is the Cash Conversion Cycle (CCC). The formula is: Days of Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) - Days Payable Outstanding (DPO). In simple terms, this measures how long it takes to convert your investment in inventory back into cash. A skilled manager actively works to shorten this cycle:

• Optimizing Inventory (DIO): They use sales data and demand planning for e-commerce to determine optimal stock levels, reducing the cash tied up in slow-moving products while avoiding stockouts on bestsellers. A scenario we repeatedly see is that a hiring trigger is when a company starts holding significant inventory, defined as more than 60 days worth.
• Streamlining Receivables (DSO): For businesses with wholesale accounts, they ensure timely payments. For DTC sales, this is typically low but still needs to be monitored with payment gateways like Stripe.
• Negotiating Payables (DPO): They work with suppliers to secure better payment terms, extending the time you have to pay for inventory and freeing up cash for operations.

The finance manager will build and own a 13-week cash flow forecast. This forecast, typically in a spreadsheet that pulls data from Shopify and your accounting software (QuickBooks in the US or Xero in the UK), gives you a clear view of your runway and helps you avoid cash crunches. You can use this free 13-week cashflow forecast template to get started.

Pillar 2: Architect of Profitable Growth and Unit Economics

As you scale, it becomes harder to know which activities are truly making you money. Are your Facebook ads profitable? Is that new product line actually contributing to the bottom line? This is the second major pain point: pinpointing channel-level profitability to guide marketing spend and inventory investment.

A great finance manager provides this clarity by going deeper than gross margin and focusing on contribution margin. This metric reveals the true profit generated from each order after all variable costs are accounted for. The formula is: Order Value - COGS - Payment Processing Fees - Shipping & Fulfillment Costs - Channel-Specific Ad Spend.

Consider this example for a product that sells for $120:

• Order Value: $120
• Cost of Goods Sold (COGS): -$40
• Payment Processing (Stripe): -$3.50
• Shipping & Fulfillment: -$12
• Facebook Ad Spend (for that order): -$25

While the gross profit might look healthy at $80 ($120 - $40), the contribution margin is only $39.50. By performing this channel profitability analysis across all marketing channels and SKUs, the finance manager can tell you precisely where to double down and where to pull back. This level of insight into your unit economics is essential for scaling profitably and is a core part of effective inventory management finance.

Pillar 3: Builder of a Scalable Financial Foundation

While strategy is crucial, the first dedicated finance hire must also be a "Player-Coach" who builds the financial plumbing. This person is responsible for establishing a rock-solid, scalable accounting process. A key part of this involves mastering inventory accounting and ensuring Cost of Goods Sold (COGS) is recorded accurately in QuickBooks or Xero.

They will also take ownership of the month-end close, the process of reviewing and finalizing the monthly financial statements. In practice, we see that an early-stage company's close can take 15 days or more, leaving founders making decisions on outdated information. A key performance indicator for this role is to shorten the month-end close process from 15 days to 5 days, enabling faster, data-driven decisions.

Finally, this individual will manage financial compliance. This is especially complex given the geographic focus on the UK and USA. For US companies, they must navigate the intricate web of state-by-state sales tax laws and nexus requirements. In the UK, they will manage VAT registration and reporting, ensuring compliance with Making Tax Digital rules. This foundational work ensures the company has reliable data and stays compliant as it grows.

How to Write an E-commerce Finance Manager Job Description

Knowing you need this role is one thing; writing a job description that attracts the right candidate is another. This is where founders often struggle, unsure which skills to prioritize when hiring a finance manager for e-commerce. Your job description should be structured clearly to reflect the three pillars of the role.

About the Role

Start with a concise summary. Explain that you are seeking your first dedicated finance hire to be a strategic partner to the founders. State that this person will be responsible for building the financial infrastructure to support scalable growth. Mention they will own everything from cash flow forecasting to unit economic analysis and compliance.

Key Ecommerce Finance Manager Responsibilities

This section should directly translate the pillars into actionable duties. Structure the responsibilities to cover the full spectrum of e-commerce finance roles, from strategic to operational.

• Cash Management & Working Capital: Own and maintain the 13-week cash flow forecast. Actively manage the company's working capital and Cash Conversion Cycle by optimizing inventory, receivables, and payables.
• Financial Planning & Analysis (FP&A): Develop and report on key e-commerce metrics, including contribution margin per order, channel-level profitability (MER, CAC/LTV), and SKU-level unit economics. Build the annual budget and quarterly re-forecasts.
• Accounting & Operations: Lead the month-end close process to produce timely and accurate financial statements. Oversee inventory accounting and manage COGS recognition in QuickBooks or Xero.
• Compliance & Control: Ensure compliance with sales tax regulations across all relevant states (US) or VAT regulations (UK). Establish and maintain internal financial controls.
• Strategic Partnership: Serve as a key advisor to the leadership team, providing financial insights to guide decisions on pricing, marketing spend, inventory purchasing, and new product launches.

Qualifications & Experience

Be specific and non-negotiable on experience. The pattern across successful e-commerce clients is consistent: general finance experience is not enough. The right candidate must understand the physical and financial flow of goods.

• Experience: 3-5+ years of finance experience, with at least 2 years in an e-commerce, CPG, or retail business is essential.
• Technical Skills: Advanced spreadsheet skills are required. Candidates must have hands-on experience with accounting systems like QuickBooks or Xero and e-commerce platforms like Shopify.
• Mindset: Look for a proactive, hands-on operator who is comfortable moving between high-level strategy and detailed execution. They should be a clear communicator who can translate complex financial data into actionable insights for non-finance stakeholders.

Practical Takeaways for Founders

For growing e-commerce brands, moving from a combination of founders, bookkeepers, and external accountants to a dedicated finance manager is a critical step in building a durable business. The primary triggers are clear: crossing the $1M revenue threshold and seeing your cash tied up in more than 60 days of inventory.

When hiring for e-commerce finance roles, prioritize candidates who can operate across three essential pillars. First, they must be masters of the Cash Conversion Cycle, providing a clear view of your cash runway. Second, they must be architects of profitable growth, using contribution margin analysis to guide your spending. Third, they must be disciplined builders of a scalable financial foundation, from a fast month-end close to navigating complex sales tax. The right person is not just closing the books; they are providing the financial clarity needed to build a durable, profitable e-commerce business. To continue learning, visit our Building Your Finance Team hub.

Frequently Asked Questions

Q: What is the single most important responsibility of an e-commerce finance manager?
A: While all responsibilities are important, managing the cash conversion cycle is the most critical. An e-commerce business can be profitable on paper but fail due to poor cash flow. Proactively managing inventory, receivables, and payables ensures the business has the cash it needs to operate and grow.

Q: What is the biggest mistake founders make when hiring for e-commerce finance roles?
A: The most common mistake is hiring a candidate with a general finance background instead of specific e-commerce or CPG experience. They often underestimate the complexity of inventory accounting, fulfillment costs, and channel-specific marketing metrics, which are core to the business model and differ greatly from software or service industries.

Q: Should I hire a finance manager or a financial controller first?
A: For most e-commerce startups under $10M in revenue, the first hire should be a hands-on finance manager. This role blends the strategic analysis of an FP&A manager with the operational duties of a controller. A dedicated controller becomes more necessary as the company scales and requires more complex controls and compliance management.

Q: Can I use an outsourced finance firm instead of a full-time hire?
A: Outsourced firms can be an excellent interim solution, especially for bookkeeping and basic accounting. However, a full-time, in-house finance manager becomes essential when you need a strategic partner who is deeply embedded in the daily operations and can provide real-time insights to guide decision-making on marketing, pricing, and inventory.