General
Before Series A, many founders can still keep the finance function relatively informal.
They know what is in the bank. They know who is being hired. They know which customers are close to signing, which invoices are late and where the biggest costs are sitting.
And that works for a while.
But as the business grows, the gaps start to show. There are more people making spending decisions, more investors asking questions, more revenue lines to explain and more pressure to understand how long the cash will last.
At that point, finance cannot just record what happened last month. It needs to help the team decide what happens next. That is where CFO discipline starts to matter.
Not heavy process. Not a finance function that slows everyone down. Just enough structure to know where the cash is going, whether the plan is still realistic and what needs to be fixed before it becomes a bigger problem.
For startups preparing for Series A and beyond, finance needs to cover more than bookkeeping and compliance. It needs to support decisions around cash, hiring, revenue quality, risk and investor expectations.
Why finance changes after Seed
At Seed stage, finance is usually fairly simple.
The business is tracking burn, runway, payroll, basic revenue, investor updates and core compliance obligations. The founder is often close enough to the detail to know what is going on without needing much formal reporting.
By Series A, that changes. Investors and boards want to understand:
- how revenue is growing
- whether growth is efficient
- how long the cash lasts
- whether hiring matches the plan
- where the forecast has changed
- whether spend is under control
- what risks need attention
- what decisions the board needs to make
At this stage, finance cannot just close the books and send a report. It needs to give founders a live view of where the company is heading.
For many scaleups, this is also the point where a more structured Fractional CFO or VCFO function becomes valuable.
Seed finance vs. Series A finance
The shift from Seed to Series A is not only about having more revenue or more cash in the bank. It is a shift in operating discipline.
None of this means the business needs to become bureaucratic. The aim is to make sure founders, leadership teams and investors can see what is happening early enough to act on it.
What investors expect from Series A finance
Series A investors do not need every number to be perfect. But they do need to believe the founder understands the numbers and can explain what is moving.
They will usually want to understand:
- current cash position
- monthly burn
- runway under different scenarios
- revenue growth and revenue quality
- gross margin
- customer concentration
- churn and retention
- hiring plan and payroll cost
- forecast assumptions
- tax and compliance position
- key contracts, governance records and financial documents
This is why the finance clean-up should happen before the raise starts. If the company only starts organising its numbers once investors begin asking questions, the process can slow down quickly. It also creates unnecessary doubt. Not because the business is weak, but because the founder is forced to explain basic financial information under pressure.
LUNA has written more on this in its guide to financial due diligence before raising capital.
The financial controls founders should build before Series A
Before Series A and beyond, founders should start putting more structure around finance.
That does not mean building a corporate finance function too early. It means having enough control that the business can scale without losing track of the basics.
The core financial controls usually include the following.
Monthly management reporting
Founders should have a monthly reporting rhythm that explains financial performance, not just accounting outputs.
A useful monthly report should show:
- revenue
- gross margin
- operating expenses
- payroll
- burn
- cash position
- runway
- forecast versus actuals
- key movements from the prior month
The report does not need to be long. It does need to be consistent.
If the format changes every month, the leadership team spends too much time decoding the report and not enough time discussing the decisions behind it.
For startups that need stronger reporting support, LUNA’s startup accounting services are designed around the needs of startups, scaleups and venture-backed companies.
Rolling cashflow forecast
A static annual budget is not enough for a scaling startup.
Founders need a rolling cashflow forecast that shows how long cash lasts under realistic assumptions.
At Series A stage, a cashflow forecast should usually include:
- current cash balance
- expected cash receipts
- expected payroll
- contractor costs
- supplier spend
- tax obligations
- debt or grant funding, if relevant
- expected timing of major one-off costs
- best case, base case and downside scenarios
The forecast should be updated regularly and used in decisions.
If the hiring plan changes, the forecast should change. If revenue slips, the forecast should change. If the business commits to a major new spend item, the runway impact should be visible before the decision is locked in.
Clear budget ownership
As the company grows, founders cannot approve every decision manually.
Budget ownership gives the business a way to keep moving without losing control.
This might include:
- department-level budgets
- approval thresholds
- monthly budget reviews
- owner accountability for major spend areas
- rules for software, contractor and marketing spend
This is not about saying no to spend. It is about making sure spend lines up with the plan.
Hiring approval process
Hiring should be connected to the financial model. Before a role is approved, the business should understand:
- why the role is needed
- whether it is in the current plan
- the fully loaded employment cost
- the impact on runway
- the expected commercial or operational outcome
- what happens if the hire is delayed
This is especially important where payroll is the largest cost base.
A few unplanned hires can shift runway materially. That may be the right decision, but it should be a conscious one.
Revenue and gross margin reporting
Revenue should be reported in a way that reflects the business model.
A SaaS company, marketplace, services business, fintech, healthtech or enterprise software company may all need different reporting structures. The important thing is that the numbers explain how the business actually makes money.
Founders and investors should be able to understand:
- what revenue is recurring
- what revenue is one-off
- which customers or products drive margin
- where churn is appearing
- whether customer concentration is increasing
- whether growth is becoming more or less efficient
If revenue is growing but margin is falling, the board should know why. If one customer represents a large share of revenue, that should not be buried. If expansion revenue is carrying the quarter, that should be visible too.
Spend controls
Spend controls help founders avoid leakage as the team grows.
Useful controls might include:
- approval limits
- subscription reviews
- credit card controls
- supplier approval processes
- monthly software audits
- contractor approval rules
- purchase order processes for larger spend
These controls should be proportionate to the stage of the business.
A 15-person startup does not need the same process as a 300-person company. But it should know who can approve what, where the money is going and which costs have quietly become recurring.
Clean payroll and contractor records
Payroll, contractors and employment-related obligations can get messy quickly.
Before Series A, startups should make sure they have clean records for:
- employees
- contractors
- salaries
- superannuation
- leave obligations
- payroll tax exposure
- contractor agreements
- tax and withholding obligations
This matters for reporting, compliance and due diligence. It also avoids the painful version of finance clean-up: discovering missing records, unclear contractor arrangements or payroll issues while investors are already reviewing the business.
Tax and compliance visibility
Tax and compliance should not sit in a separate corner of the business.
As startups scale, founders need visibility over:
- BAS
- GST
- PAYG
- payroll tax
- superannuation
- income tax
- R&D tax incentive records, if relevant
- ESOP and employee equity tax considerations
- international tax exposure, if expanding offshore
These issues are easier to manage when they are visible early. They are much harder to deal with when they appear during a raise, audit, acquisition process or board discussion.
For scaleups managing more complex obligations, LUNA provides legal, accounting and tax support for scaleups and high-growth companies.
How financial controls improve board reporting
Better controls also make board reporting easier.
A Series A board pack does not need to be long, but it should make the important points easy to see. The board should be able to understand what changed, why it changed and where input is needed.
A practical board pack should usually answer five questions:
- What changed since last month?
- How much runway does the business really have?
- Is revenue quality improving?
- Does hiring match the business plan?
- What decisions or risks need attention?
That is enough for most scaleups to move from reporting history to having a more useful board discussion.
For founders building a more consistent board rhythm, LUNA has written more on board cadence and governance structure.
Data room readiness before Series A
A clean data room can make a fundraising process smoother.
This does not mean founders need to build a perfect investor portal months before raising. It does mean key finance, legal, tax and governance documents should not be scattered across inboxes, old folders and different versions of the same spreadsheet.
Before Series A, founders should start organising:
- financial statements
- management accounts
- cashflow forecast
- revenue reports
- customer contracts
- payroll records
- tax records
- cap table
- company register
- board minutes
- shareholder approvals
- key commercial agreements
- insurance documents
Governance records are especially important. LUNA has also written about why the company register matters before a raise, ESOP update or exit.
Why financial controls matter for fundraising
A clean finance function can change the quality of a fundraising process. When founders can explain the numbers clearly, investors have more confidence in how the business is being run. They can see how decisions are made, how cash is managed, how hiring is controlled and how growth is being measured.
That does not mean the business needs to be flawless. It means the business needs to be explainable.
Good financial controls also help avoid common fundraising issues, including:
- inconsistent financial reports
- unclear runway assumptions
- unsupported revenue forecasts
- messy payroll or contractor records
- incomplete tax records
- unclear customer concentration
- weak gross margin visibility
- board materials that do not explain the real decisions
- data rooms that slow down due diligence
The earlier these issues are addressed, the easier it is to run a confident fundraising process.
Financial controls checklist before Series A
Before raising a Series A round, founders should be able to answer the following:
- Do we have monthly management reports?
- Do we have a rolling cashflow forecast?
- Can we explain our runway under different scenarios?
- Do we know what changed in the P&L last month?
- Can we separate recurring and non-recurring revenue?
- Can we explain churn, expansion and customer concentration?
- Do we understand gross margin by product, customer or revenue stream?
- Is our hiring plan linked to runway?
- Do we have budget owners for major spend areas?
- Are payroll, contractor and tax records clean?
- Are approval processes clear for hiring and large spend?
- Are our company register, cap table and governance records aligned?
- Is our data room ready for investor due diligence?
- Does our board pack clearly show risks, asks and decisions?
If the answer to several of these is no, the business may not need more reporting. It may need better finance discipline.
Preparing for Series A?
Financial controls are not about slowing founders down. They are about helping the business scale without losing sight of the basics: cash, revenue, hiring, risk and decisions.
Before Series A, founders need to know where the cash is going, what is driving growth, whether hiring matches the plan and what risks need attention.
LUNA works with startups and scaleups to build the finance, accounting, reporting and governance foundations needed for the next stage of growth.
If you are preparing for Series A, building a board reporting rhythm or trying to get better visibility over runway, hiring and revenue, our team can help you set up the controls and reporting that support the next stage.
Explore LUNA’s Fractional CFO services, accounting support for startups and scaleups, or get in touch with the team.