Accounts Receivable Software
Discover Upflow

The finance stack your business needs to keep up with fast growth

SaaS FinanceAccounting and Software

Charlie Phillips

Jun 21, 2021


More than transactions1. Live in the future2. Know your future needs and challenges3. Favor an open ecosystem

Your financial tech stack is crucial to growing your business and running it smoothly.

It’s easy to overlook or push decisions to the backburner, but working with the wrong tools and systems can mean inefficiency, unnecessary costs, lack of agility for growth, and loads of wasted time and frustration for your team.

In a recent webinar in partnership with Lattice, we spoke with Jason Lopez, the Controller at Lattice and a startup leader with years of experience at businesses at varying stages of growth. From its founding in 2015 to its Series E in March 2021, the Lattice finance team has continually evolved its tech stack, upgrading its core systems and adopting auxiliary ones like A/R tools to meet business demands.

Jason answered the burning questions you’ll face at each stage of growth, from seed to Series E, to help you build and scale your finance stack.

More than transactions

People tend to think of finance tools as purely transactional — invoicing, reconciliation, collections. But as you scale, your finance and accounts receivable systems need to become a strategic facet of your business, like any other.

“The strategic impact of finance and accounting is kind of underappreciated,” Jason says.

The finance and A/R teams tend to be a little neglected in a company’s early days until they start to face financial regulations or other challenges. When a company grows to revenues of around $20 million, this interest kicks in. Jason suggests we should be investing in this level of due diligence at a size more like $5 million. 

Here’s his advice for building the right stack to support your growth.

1. Live in the future

The biggest mistake many teams make is building a tech stack for their current needs. That leaves you trying to grow with insufficient tools, or scrambling to upgrade way too often as your needs change.

Instead, build your stack now for your future self.

Look ahead about two years. Where is the business headed, and which tools and systems do you need in place to meet your expected needs?

Jason says two years is the “sweet spot.” A five-year plan would be ideal, but there’s too much uncertainty in a fast-growth startup to plan that far out, and if you plan for anything less than two years, you’ll find yourself constantly reevaluating and rebuilding, wasting a ton of time on adoption.

Think you’re better off sticking to a spreadsheet?

That’s understandable. Regularly evaluating and upgrading your tech stack sounds like it requires time you don’t have to spare.

But consider how much time you’re actually spending on the manual processes around your spreadsheet system. What will that look like when the company doubles or quadruples in size? Imagine not spending that time on accounting. What could you accomplish to move the needle in that time?

To choose a tech stack that’ll grow with your business, ask these questions about where you are now and where you’re headed:

  • What type of business are you?

  • What are your invoice volumes?

  • What’s your revenue model?

  • Which payment methods do you accept (or want to add)?

  • Are your current systems equipped to accommodate future growth?

2. Know your future needs and challenges

How do you decide when to switch systems? Some benchmarks to watch out for:

  • International expansion — Does your current stack support international transactions?

  • Revenue — Can your system handle your transaction volume as you grow?

  • Headcount — Are the fees you’re paying for solutions aligned with your needs?

Ultimately, though, the right time is when you have time.

Some circumstances are good catalysts for upgrading your stack, but those growth markers won’t always align with the moments your team has time to properly implement a new system.

Jason says you’ll need to think about upgrading from a simple system like QuickBooks to something that can support more complicated functions when you reach around $10 million in recurring revenue.

So you should look ahead to that future now. If you’re at $5 million now but expect to reach $10 million in a year, plan time in the next year for your upgrade. Your capabilities might be a little ahead of your actual volume for a few months — but that’s far better than falling behind.

“If you can do something earlier, that's always my suggestion,” Jason says. “It's better to do it earlier than late.”

Should you build or buy?

The best way to evaluate whether any software will work for your business is to talk to others who’ve used it. Rely on others in your industry who’ve been where you are and can help you untangle sales pitches and discover the real value of various solutions.

“Any solution you can have, someone's going to be able to sell it to you and tell you it's the best thing ever,” Jason points out, “but until you talk to someone who's actually used it in practice, that's when you get a real sense of it.”

You might decide none of the out-of-the-box solutions seem right and instead build your own. Be prepared for the added time that’ll take.

Jason shared the example of his experience at Lattice, where they’ve built a custom billing solution to handle expansions. It’s a great solution, but, he says, “I wish we had looked at it a year ago.”

A custom solution requires engineering resources, which means you’ll have to work around the other demands put on your dev team as the business grows — and, usually, finance team needs get deprioritized.

3. Favor an open ecosystem

A lot of common processes in the finance function leak into spreadsheets when they should really be handled through a more sophisticated system. Consider these most common:

  • Deferred revenue: Because this is very simple, it often just falls into a spreadsheet. That’s easy when your business has 10 or 20 deals. But what happens when you’re trying to track 100 or 200? When you can’t even open the spreadsheet without crashing your computer because its processing power can’t handle thousands of rows of data? As revenue grows, this function should move to a dedicated tool.

  • Expense management: Issuing company credit cards and handling reimbursements is simple when you have a few employees. But it becomes complicated and time-consuming when you reach 50 or 100 employees. Find software to manage these processes automatically and free up your time.

Jason made a clear case for systemization, citing Lattice’s workload.

He estimates the company’s collection rate is around 90%, which is pretty good. You might look at that and think a simple system is all you need.

But consider the fact that they process around 1,000 invoices per month. Even with a high collection rate, they’re left with 100 past-due invoices to manage every month. Your finance team can’t manage that workload through manual emails.

That’s why they knew they needed to upgrade and leave the spreadsheet behind.

“You can imagine sending over 100 emails, having to track that, having a spreadsheet,” Jason says. 

Layer on top of that the multiple touch points throughout the company — sales people and customer success reps following up with customers at various points in the process. The communication load becomes outlandish.

Now with systematized collections through Upflow, they’re able to automatically send custom messages to follow up on past-due invoices, and automatically keep track of all accounts receivable and communications in one place for all teams to reference.

“We all have payroll, we’re all issuing invoices, we're all paying bills. So don't think you're alone,” Jason says. “Almost everyone handled those things out of spreadsheets when they first started, but eventually it just became too much to manage.”

cta for webinar

Latest articles