Accounting & Tax
As your business grows, cash gets harder to keep on top of. You’re hiring ahead of revenue, invoices are getting bigger but taking longer to land, expenses are less predictable and the timing of your next raise might move. You can be growing well on paper and still find yourself with less cash in the bank than you expected.
Managing cash flow isn’t just about checking your balance or keeping costs down. It’s about having a clear enough view of what’s coming in, what’s going out and what could change over the next few months.
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Keep an eye on what’s changing your runway
You’ll probably have a rough idea of how much runway you have, but that number can move quickly. Bring a hire forward, have a customer pay later than expected or push a raise out by a few months and the picture can look quite different.
A rolling cash flow forecast helps you keep that view current. It doesn’t need to predict every dollar perfectly, but it should reflect what you know now rather than the assumptions you made six months ago.
It’s also worth looking at what happens when things don’t quite go to plan. If your next raise takes three months longer, what changes? If revenue comes in below forecast for a quarter, how much room do you still have? If a major customer pays late, does anything else need to move?
You don’t need to model every possible outcome. You just want enough warning to make those decisions while you still have options. If your forecasts are becoming more complicated as the business grows, this is also where Fractional CFO support can start to become useful. LUNA’s current Fractional CFO service specifically covers cash flow, forecasting, reporting and runway planning.
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Pay attention to when the cash actually lands
A signed contract and cash in the bank are two different things. You might close a large annual deal, but if you’re invoicing monthly or the customer pays on 60-day terms, that money won’t necessarily be there when payroll is due.
As you grow, it becomes more important to forecast when you realistically expect to be paid rather than when a deal is signed. The gap between winning the work, delivering it and getting paid for it can become surprisingly significant once the team and monthly cost base get bigger.
The same goes for money going out. Payroll, BAS, super, insurance, annual software renewals and professional fees don’t always fall neatly across the year. Looking only at an average month can hide the months where several of those costs land together.
This relies on having clean numbers underneath the forecast in the first place. If bookkeeping, payroll or reporting are starting to become harder to stay on top of, LUNA’s Accounting team supports startups with exactly that financial foundation.
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Know what hiring does to the plan
For most growing startups, people will make a much bigger difference to burn than another software subscription. That doesn’t mean you should be cautious about every hire. It means you should be able to see what the decision does to your cash position before you make it.
If bringing two roles forward takes a couple of months off your runway but gives the business what it needs to hit the next stage of growth, that may still be the right call. The important thing is knowing you’re making that trade.
Contractors, agencies and recurring tools deserve a similar look. These costs tend to build gradually, so they can be easy to underestimate until they’re already a meaningful part of your monthly spend.
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Give yourself room when the plan changes
A forecast is most useful when it helps you make a decision, not when it perfectly predicts what will happen.
If revenue slips, a raise takes longer or costs come in higher than expected, you want to see the effect early enough to decide whether you need to delay a hire, slow some discretionary spend, bring fundraising forward or simply stay the course.
Those decisions are much easier when you have months to work with rather than weeks.
None of this means spending as little as possible. If you’re growing, you need to invest in people, product, marketing and everything else that comes with building the business. The point is to understand what those decisions do to your cash position and how much room you have if the return takes longer than you hoped.
As the business grows, these decisions also become more connected. Hiring affects runway, payment timing affects the cash you have available, tax obligations affect what’s really yours to spend and fundraising affects how quickly you can invest.
The goal isn’t a more complicated spreadsheet. It’s a clearer view of what the business can afford to do next.
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If you’re starting to think about your next raise as well, we’ve covered the next stage in How to get your startup’s finances ready for growth and funding. That piece goes further into investor reporting, revenue quality, diligence and funding readiness, so it complements this article rather than repeating it.
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