Finance Team Skills Matrix for Startups: When You Should Hire Which Roles

Finance Team Skills Matrix for Startups: When You Should Hire Which Roles

As a founder, you wear every hat, and the finance hat is often the most uncomfortable. You are tracking runway in a spreadsheet while trying to close customers, ship product, and manage a team. The uncertainty is not just about the numbers themselves, but what they mean for what comes next. When should you stop doing the bookkeeping yourself? Who is the right first finance hire? Answering these questions incorrectly can lead to costly mistakes, compliance gaps, and a finance function that cannot support your growth.

This guide provides a clear skills matrix for building your startup finance team from pre-seed to Series B. It maps essential finance skills for startups to business triggers and roles, helping you hire the right talent at the right time. Following this structure helps you build a scalable finance department from the ground up.

Understanding the Three Layers of a Startup Finance Function

Before you write a job description, it’s essential to understand what work actually needs to get done. The startup finance team roles and skills can be broken down into three distinct layers. Many founders end up with critical gaps in tasks like cash forecasting and compliance because they overlook this fundamental structure.

1. The Transactional Layer: This is the foundation of your financial data. It involves the day-to-day recording of all financial activities, acting as the plumbing for your entire finance function. Key tasks include bookkeeping, accounts payable (paying bills), accounts receivable (collecting cash), payroll processing, and expense management. For most early-stage companies, this layer is managed in tools like QuickBooks (US) or Xero (UK) connected to bank feeds and payment processors like Stripe. Employers must follow established regulations like the payroll tax rules in the US.
2. The Compliance & Reporting Layer: This layer organizes the raw data from the transactional layer into standardized, reliable financial statements. It ensures your books are accurate and adhere to relevant accounting standards. For US companies, this means following US GAAP (Generally Accepted Accounting Principles), while in the UK, the standard is typically FRS 102. This layer covers the monthly close process, sales tax filings, and preparing investor-ready financials. This is also where the shift from cash to accrual accounting becomes necessary to accurately represent your business performance, especially for audits.
3. The Strategic Layer (FP&A): This is the forward-looking layer. Financial Planning & Analysis (FP&A) uses the historical data from the other layers to build models, forecasts, and analyses that inform critical business decisions. This includes managing the budget, forecasting cash runway, analyzing unit economics like customer acquisition cost (CAC) and lifetime value (LTV), and providing the financial narrative for fundraising. This is where your finance team responsibilities shift from recording the past to shaping the future.

Mapping Startup Finance Team Roles and Skills by Stage

Your finance needs evolve dramatically as your company grows. The complexity of your business model, such as having multi-year SaaS contracts or international e-commerce sales, is often a more important driver for developing finance capabilities than funding rounds alone. Here is a breakdown of how to structure your finance team at each stage.

Stage 1: Pre-Seed & Seed (The Founder-Led Era)

At this early stage, the founder is the de-facto finance department. The primary goal is survival, which translates to managing cash and maintaining basic records. Perfect compliance is less important than having a clear view of your cash runway. Your focus should be on establishing a simple, clean transactional foundation that you can build on later.

A scenario we repeatedly see is a founder trying to manage everything in spreadsheets, which quickly becomes unmanageable. The first step is setting up a proper chart of accounts in an accounting system like QuickBooks or Xero. A basic structure might include:

• Assets: Cash, Accounts Receivable
• Liabilities: Accounts Payable, Credit Cards, Loans
• Equity: Common Stock, Additional Paid-in Capital
• Revenue: Software Subscriptions, Services Revenue
• Cost of Goods Sold: Hosting Costs, Third-Party Data Fees
• Operating Expenses: Payroll, Research & Development, Sales & Marketing, General & Administrative

A common trigger for outsourcing is when a founder spends more than five hours a week on bookkeeping. The cost for a fractional bookkeeper or accounting firm is typically $500 to $2,000 per month for an early-stage startup. This is a worthwhile trade-off for reclaiming valuable founder time. At this point, a simple 13-week cash flow model is usually a sufficient forecasting tool.

Key Capabilities and Ownership

• Basic Bookkeeping & Bank Reconciliation: This is triggered by company formation and opening your first bank account. The founder owns this initially, then hands it off to a fractional bookkeeper.
• Payroll & Expense Management: The trigger is hiring your first employee. The founder typically manages this with a tool like Gusto or Rippling before transitioning it to the bookkeeper.
• Invoicing & Collections: This starts with your first signed customer. The founder is responsible for sending invoices and ensuring cash is collected.
• Cash Flow Forecasting: As soon as you begin active spending, you need a forecast. The founder usually owns this, often using a basic spreadsheet.
• Basic Tax Compliance: Selling into a new state or country triggers the need for sales tax registration and filings. This is best handled by a fractional bookkeeper or an external tax firm.

Stage 2: Series A (Building the Finance Foundation)

After a Series A, investor expectations and business complexity increase significantly. Your spreadsheet-based finance function is no longer sufficient. An audit is often a condition of the investment, meaning your books must comply with US GAAP or FRS 102. This is the stage to bring finance in-house by hiring an Accountant or Finance Manager who can own the transactional and compliance layers.

This first in-house hire is responsible for implementing a formal monthly close process and managing more complex accounting areas. For SaaS businesses, this is when revenue recognition becomes a major focus. For example, consider a US-based SaaS company that signs a two-year, $24,000 contract and receives the cash upfront. Under cash accounting, you would recognize $24,000 in revenue immediately. But under ASC 606, you must recognize that revenue over the life of the service, or $1,000 per month. This provides a true picture of performance for investors and auditors.

Similarly, as you grant stock options, you must account for them properly under ASC 718, the standard for stock-based compensation. For Biotech and Deeptech companies, tracking research costs is paramount. A preclinical biotech startup must classify scientists' salaries, lab consumables, and third-party assay services as R&D expenses. These must be tracked meticulously to claim tax relief, such as under the HMRC R&D scheme in the UK or by following US tax code Section 174. Organizations like KPMG provide detailed guidance on R&D accounting.

Key Capabilities and Ownership

• Accrual-Basis Accounting (GAAP/FRS 102): The trigger is a signed Series A term sheet or an audit requirement. This becomes the core responsibility of your new Accountant or Finance Manager.
• Formal Monthly Close Process: The need for reliable monthly investor updates drives this. Your Accountant or Finance Manager owns the process of closing the books each month.
• SaaS Revenue Recognition (ASC 606): This becomes critical when you have multi-year or complex customer contracts. Your Accountant will manage this, likely supported by external technical experts.
• Stock-Based Compensation (ASC 718): Triggered by issuing employee stock options, this is managed by the Accountant or Finance Manager.
• Budget vs. Actuals Reporting: Board requests for financial discipline make this a priority. The founder and Accountant collaborate on creating and reporting against a budget.
• R&D Cost Tracking for Tax Credits: Significant spend on R&D activities triggers this need. The Accountant or Finance Manager ensures costs are tracked correctly to maximize tax claims.

Stage 3: Series B and Beyond (Scaling the Finance Team Structure)

By Series B, your finance team needs to specialize to support a scaling organization. The transactional and compliance layers should be running smoothly under a Controller, who refines processes and ensures reporting integrity. This hire establishes clear ownership and documented procedures. Your first strategic finance, or FP&A hire, becomes essential for building sophisticated models, managing departmental budgets, and serving as a business partner to other leaders.

At this stage, your finance team structure starts to take shape with clear ownership over distinct functions. For e-commerce businesses, this could mean managing sales tax nexus across dozens of states. For SaaS or Deeptech companies, it involves complex decisions around capitalizing software development costs. For companies expanding internationally, it means dealing with transfer pricing and multi-currency accounting.

In practice, we see that the FP&A hire is what allows the founder and CEO to finally step away from day-to-day financial modeling and focus on company-level strategy. This person owns the long-range forecast, the fundraising model, and the key performance indicator (KPI) dashboards that the executive team and board rely on to make informed decisions.

Key Capabilities and Ownership

• Departmental Budgeting & Forecasting: When the company grows beyond 50 employees, centralized budgeting breaks down. An FP&A Analyst or Manager is hired to own this process.
• Advanced Board & Investor Reporting: A regular, detailed reporting cadence is required by the board. The Controller and FP&A Manager collaborate to produce a comprehensive reporting package.
• System Implementation & Management: Manual processes in QuickBooks or Xero begin to fail at scale. The Controller leads the selection and implementation of new systems, like a mid-market ERP.
• Technical Accounting: Strategic activities like M&A, debt financing, or international expansion trigger the need for deep technical expertise, owned by the Controller and supported by external advisors.
• Unit Economics & Cohort Analysis: The need for deep insights into business drivers requires sophisticated analysis, which becomes the responsibility of the FP&A Analyst or Manager.
• Treasury & Cash Management: With multiple bank accounts and significant cash on the balance sheet, a formal treasury function is needed. This is typically owned by the Controller or a Head of Finance.

Practical Takeaways: Your Action Plan

Building a finance department can feel daunting, but a staged approach removes much of the uncertainty. For founders navigating this process, the plan can be broken down into a few straightforward steps focused on developing your finance capabilities methodically.

1. Audit Your Time, Then Outsource

Your first step isn't hiring; it's buying back your time. Once you cross the threshold of spending more than five hours a week on bookkeeping, engage a fractional firm. This not only frees you up to focus on growth but also cleans up your transactional layer, creating a solid foundation for the next stage.

2. Define the Work Before the Role

Instead of starting with a generic "Finance Manager" job description, use the three-layer framework to identify your biggest pain point. Are messy transactions holding you back? Is inconsistent reporting creating investor doubt? Or is a lack of forward-looking analysis preventing strategic decisions? Hire the person who solves that specific problem.

3. Hire for Your Next 18 Months, Not Your Forever

A Series B-level Controller will be bored and over-skilled at a Seed-stage company. Conversely, an early-stage accountant may lack the technical depth for Series B challenges like ASC 606. Hire the person with the essential finance skills for startups at your current inflection point and your immediate future, not for the company you hope to be in five years.

4. Let Your Business Model Guide You

Do not just follow the funding-stage playbook. An e-commerce startup with inventory and complex sales tax may need a compliance-focused hire much sooner than a simple B2B SaaS business with annual contracts. Let the unique complexities of your operations dictate your priorities when hiring finance talent. This approach ensures you build the right startup finance team with the right skills at the right time.

Frequently Asked Questions

Q: What is the main difference between an accountant and a controller?

A: An accountant primarily handles day-to-day transactions and the monthly close process. A controller manages the entire accounting function, designs internal controls, ensures compliance with standards like GAAP, and oversees reporting. A controller is typically the first leadership hire within the accounting function as a company scales.

Q: Should my first finance hire be in-house or fractional?

A: For pre-seed and seed-stage startups, a fractional bookkeeper or accounting firm is almost always the right choice. It is cost-effective and provides foundational support. You should hire your first full-time, in-house employee, typically an Accountant or Finance Manager, around your Series A when complexity and reporting demands increase.

Q: When do I really need to switch from cash to accrual accounting?

A: The trigger is almost always an external requirement, such as an investor demanding GAAP-compliant financials or the need for an audit. Accrual accounting provides a more accurate view of your business performance by matching revenues to the period they are earned and expenses to the period they are incurred.

Q: How does my industry change my first finance hire?

A: Your industry heavily influences the skills you need. A SaaS company needs someone familiar with revenue recognition (ASC 606). An e-commerce business needs expertise in inventory accounting and multi-state sales tax. A biotech company requires experience with R&D cost tracking for tax credits. Prioritize candidates with relevant industry experience.