Closing a significant funding round is a milestone. Whether it's a seed raise, Series A, or a large private equity injection, the moment that capital hits your account, the expectations placed on your finance function change fundamentally.
Before funding, most businesses operate with informal finance. The founder checks the bank balance to see how things are going, a bookkeeper handles BAS and payroll, and the accountant shows up once a year to do the tax return. That setup works when it's your own money and your own risk.
After a major raise, it stops working. You now have external stakeholders who handed you their capital based on projections you presented. They expect visibility into how that capital is being deployed, confidence that your numbers are accurate, professional reporting on a regular cadence, and evidence that the business is tracking towards the milestones you committed to.
Your finance function needs to grow up, and it needs to happen quickly. This guide covers exactly what changes and what to do about it.
Most pre-funding businesses run on cash basis accounting because it's simpler. You record income when cash comes in and expenses when cash goes out. It's intuitive and requires minimal accounting knowledge.
The problem is that cash basis gives you almost no useful visibility once your business reaches any level of complexity. A large client payment lands in March, making it look like a record month, when the work was actually done across January, February, and March. A quarterly insurance premium hits in July, making that month's expenses look inflated compared to August and September. The monthly P&L swings wildly based on payment timing rather than actual business performance.
After a significant funding round, accrual accounting becomes essential. Accrual recognises revenue when it's earned and expenses when they're incurred, regardless of when cash moves. This means your monthly P&L reflects the actual economic activity of that period, which is what investors need to see and what you need to make informed decisions.
The practical transition involves several things. You'll need to set up accrual journals for revenue (recognising work done but not yet invoiced, and deferring cash received for work not yet delivered). You'll need to accrue expenses that relate to a period but haven't been billed yet (like contractor invoices that arrive after month-end). Prepaid expenses like annual insurance need to be spread across the months they cover rather than hitting one month in full. And you'll need a proper monthly close process where these adjustments happen consistently, within a defined timeframe after each month-end.
This isn't optional post-funding. Investors expect accrual-based financials because they're the only way to get a true picture of business performance period by period.
Before funding, "budget" might have meant a rough figure in the founder's head or a single-tab spreadsheet from the pitch deck. Post-funding, budgeting and forecasting become core operational tools that drive decision-making and investor confidence.
You need a detailed annual budget broken down by month and by cost centre or department. Revenue should be forecast by stream with assumptions clearly stated. Operating expenses should be broken out by category: people costs, marketing, technology, office and admin, professional services, and so on. The budget should tie back to the plan you presented to investors during the raise, because they'll be comparing actual performance against it.
A static cash flow projection from your pitch deck is not a forecast. Post-funding, you need a rolling forecast that updates monthly (at minimum) and looks 12-18 months ahead. This should model cash inflows (revenue collections, not just recognised revenue), cash outflows (when expenses are actually paid, not just incurred), and the resulting cash position and runway.
Burn rate and runway become numbers you track weekly in the early months post-raise when spending patterns are shifting rapidly. If your plan assumed hiring five people in the first quarter, and you've only hired two, your burn rate and runway have changed. The forecast needs to reflect that in real time.
Every month, you should produce a budget vs actuals report that shows what you planned to happen, what actually happened, and the variance between the two. But the numbers alone aren't enough. You need commentary on material variances: why revenue was above or below plan, what's driving the cost overrun in a particular area, whether the variance is a timing issue (it'll correct next month) or a structural issue (the plan was wrong and needs updating).
This is the report that turns a budget from a theoretical exercise into an actual management tool. It's also what investors look at to assess whether you're executing the plan they funded.
Post-funding is the time to build scenarios. What happens if revenue comes in 20% below forecast for the next three months? How does that affect runway? What levers can you pull - delay hiring, reduce marketing spend, renegotiate a contract? What happens if your biggest client churns? What does the upside case look like if that new product line takes off faster than expected?
Having these scenarios modelled in advance means you can respond to changes quickly and confidently rather than scrambling when something unexpected happens. Investors value founders who have thought through the "what ifs" and can articulate their response plan.
This is where most post-funding businesses fall short. Investors don't want a casual email saying "things are going well." They want structured, professional financial reports delivered on a predictable cadence.
The standard should be: an investor opens your report, understands where the business is, and doesn't need to call you with follow-up questions. If they're constantly chasing you for clarity, your reporting isn't good enough.
A complete monthly investor pack typically includes the following components.
1. Financial statements: A profit and loss statement, balance sheet, and cash flow statement for the month and year-to-date, prepared on an accrual basis. These should be delivered within two to three weeks of month-end, which means your monthly close process needs to be disciplined and timely.
2. KPI dashboard: The specific metrics depend on your business model, but common ones include revenue growth (month-on-month and year-on-year), burn rate (how much cash you're spending per month), cash runway (how many months of cash you have left at current burn), gross margin, headcount (actual vs plan), and any business-model-specific metrics. For SaaS businesses, that's ARR, MRR, churn, CAC, and LTV. For services businesses, utilisation rate, average revenue per client, and WIP. For e-commerce, average order value, customer acquisition cost, and repeat purchase rate.
3. Budget vs actuals: As described above, with variance analysis and narrative commentary on anything material.
4. Cash flow forecast: Updated monthly, showing projected cash position for the next 12-18 months.
5. Narrative section: This is what turns a data dump into a useful report. A brief summary of what happened in the month, what's going well, what challenges you're facing, what you're doing about them, and what's planned for the coming month. Context matters. Numbers without narrative leave investors to draw their own conclusions, which may not be the ones you want them to draw.
If your funding round came with board seats (common for Series A and beyond), you'll need a board pack that goes deeper than the investor update. This typically includes everything above plus a strategic update on key initiatives, a detailed pipeline or sales forecast, a product roadmap update, a risk register or issues log, and any decisions that require board approval.
Board meetings should happen quarterly at minimum, with monthly investor updates in between. The discipline of preparing these reports has a secondary benefit: it forces you to actually review and understand your own numbers regularly, which makes you a better operator.
Funding rounds typically come with hiring plans. What was manageable with five or ten people becomes significantly more complex as you scale to 20, 30, 50 and beyond.
Once your total Australian wages exceed the threshold in a given state or territory, you become liable for payroll tax. The thresholds vary by jurisdiction, and if you're hiring across multiple states (common for remote-first companies or those expanding nationally), you may trigger obligations in several places simultaneously.
This catches a lot of growing businesses off guard. You don't get a warning letter when you're approaching the threshold. It's your responsibility to register on time and start paying. Back-paying payroll tax with penalties and interest is an expensive way to discover you should have registered six months earlier.
More employees means more super funds to manage, more payment deadlines to meet, and more potential for errors. The Super Guarantee rate continues to increase, and getting payments wrong (late, to the wrong fund, or in the wrong amount) triggers the Superannuation Guarantee Charge, which is not tax-deductible and includes an administration fee and interest.
At scale, you need a system that handles super calculations, fund management, and payment processing reliably. Manual processes break down quickly past 10-15 employees.
Post-funding, it's common to issue equity or options as part of employee compensation packages. This introduces specific accounting and tax obligations.
From an accounting perspective, share-based payments need to be valued and expensed over the vesting period. This is a non-cash expense that hits your P&L and can be material if you're issuing options broadly across the team.
From a tax perspective, there are ESS (Employee Share Scheme) reporting obligations to the ATO. The tax treatment depends on the structure of your plan and whether it qualifies for the startup concessions under Division 83A. Getting this set up correctly from the start avoids painful corrections later and ensures your employees understand the tax implications of their equity.
Fast-growing companies often bring on contractors initially because it's faster and more flexible than hiring employees. Over time, some of those contractors start to look a lot like employees: they work set hours, use your equipment, and only work for you.
The ATO takes contractor vs employee classification seriously, and getting it wrong exposes you to back-payment of super, PAYG withholding, payroll tax, and potential penalties. Post-funding, when you're scaling quickly and investor due diligence may be on the horizon, cleaning up any grey-area contractor arrangements is essential.
Manual payroll in a spreadsheet doesn't scale past about 10 people without errors creeping in. Post-funding, investing in a proper HRIS and payroll platform (Employment Hero, KeyPay, or similar) becomes essential rather than optional. The system handles calculations, compliance, leave accruals, super payments, and STP reporting. It also creates an audit trail that investors and auditors will want to see.
When it was just the founder and a bookkeeper, "controls" meant checking the bank balance occasionally. Post-funding, internal controls become a formal expectation.
The same person should not be raising purchase orders, approving them, and making payments. At a minimum, the person who enters a bill should not be the same person who approves payment. This doesn't require a large team - it just requires clear separation of responsibilities, even if one of those people is the founder.
Set spending thresholds with sign-off requirements. Anything under $500 can be approved by a team lead. Anything over $500 requires founder or CFO approval. Anything over $5,000 requires two approvals. The specific thresholds depend on your business, but having them documented and enforced is what matters. Your investors will ask about this.
Who can spend company money, on what, up to what amount, and how reimbursements work. These should be documented in a policy that every employee can access. Post-funding, when new hires are joining regularly and spending is increasing, having clear guardrails prevents both accidental overspend and potential misuse.
Increase the frequency from "when we get around to it" to weekly at minimum, daily if transaction volumes are high. Bank reconciliation is the most basic financial control, and it's also the one most likely to catch errors, duplicates, or unauthorised transactions early.
Every financial transaction should be documented and traceable. Invoices should be attached to bills in Xero, approvals should be recorded, and the reasoning behind unusual transactions should be noted. If you're heading towards a future raise, exit, or audit (which larger funding rounds often lead to), having a clean audit trail from day one saves enormous time and cost later.
Most pre-funding Xero files have a default or barely modified chart of accounts. Every expense goes into a handful of vague categories, revenue sits in a single "Sales" account, and the balance sheet is a mess of clearing accounts and suspense items that nobody has touched in years.
Post-funding, your chart of accounts needs to support the reporting your investors expect and the analysis you need to run the business.
Revenue should be segmented by stream, product, or service line. If you have subscription revenue and implementation fees, separate them. If you serve multiple industries or customer types, consider whether tracking revenue by segment adds useful visibility.
Break out your cost of sales (also called cost of goods sold or cost of revenue) so that gross margin is meaningful. For a services business, this is the direct cost of delivering the service: staff wages for delivery team members, contractor costs, software used in delivery, and any direct materials. For a product business, it's the cost of the goods themselves, packaging, and freight.
Categorise by department or function: people costs (by department), marketing and sales, technology and infrastructure, office and administration, and professional services (legal, accounting, advisory). This lets you produce departmental P&Ls and understand where money is being spent.
If your business has any research and development activity, track it separately. This is important for R&D Tax Incentive claims under the Australian programme, and it's also a line item investors want to see clearly.
Use Xero's tracking categories to add another layer of reporting without exploding your chart of accounts. Common categories include department, project or client, and location. This lets you slice your data in multiple ways without needing a separate account for every combination.
The goal is that your chart of accounts lets you produce the reports your stakeholders expect without manual rework, reclassification, or spreadsheet gymnastics every month.
After a major funding round, founders face the build-vs-buy decision for finance. Both options have merits, and the right answer depends on your stage, complexity, and how quickly you need capability.
Hiring a full-time financial controller or CFO gives you dedicated, on-site expertise. The downsides: it's expensive ($150,000-$250,000+ for someone experienced enough to handle post-funding complexity), it's slow (three to six months to find, hire, and onboard the right person), and a single hire still leaves you with coverage gaps and key-person risk. They take leave, they might resign, and they're often strong in some areas but not others. Someone excellent at compliance and month-end close may not be the right person for investor reporting and strategic analysis, or vice versa.
An outsourced finance function gives you a team from day one: junior capability for compliance and data entry, mid-level for analysis and reporting, and senior for CFO-level strategy and board-level communication. You get breadth and depth without the overhead and risk of building it internally, and you can scale the engagement up or down as your needs change.
The outsourced model works particularly well in the post-funding period when you need capability immediately (not in three months after a recruitment process), when your needs are evolving rapidly as the business scales, and when you want experienced people who've done this before across multiple businesses at your stage.
Many businesses start with an outsourced finance function post-funding and later bring key roles in-house as the business stabilises and the needs become clearer. The outsourced team handles the immediate requirements, builds the systems and processes, and then supports the transition to an internal team when the time is right.
These are the errors we see repeatedly from businesses that have just closed a significant round. Most are avoidable with the right awareness and support.
Treating the raise as revenue. The capital injection is equity, not income. It goes on the balance sheet, not the P&L. This sounds obvious, but it's a surprisingly common error in businesses that haven't had an equity event before.
Not updating the budget after the raise changes the plan. Your pre-funding pitch deck budget is now outdated. The actual amount raised, the timing of the raise, and any changes to the plan agreed with investors need to be reflected in a revised budget immediately.
Spending months building a perfect finance function instead of getting the basics right first. You don't need an enterprise ERP system in month one. You need a clean monthly close, a cash flow forecast, and a reliable investor reporting pack. Start with those and build from there.
Not tracking burn rate weekly in the early months post-raise. Spending patterns change dramatically after funding. New hires, new tools, new office space, increased marketing spend. If you're only looking at cash monthly, you can be weeks behind on understanding your actual burn.
Assuming the existing bookkeeper can handle the increased complexity. The person who was doing BAS and basic data entry before the raise is almost certainly not equipped to handle accrual accounting, investor reporting, equity accounting, and financial modelling. This isn't a criticism of them - the requirements have fundamentally changed.
Delaying payroll tax registration until it becomes a compliance issue. If your hiring plan pushes you past the threshold in any state, register proactively. Don't wait until you're already liable and facing back-payments.
Not setting up proper equity accounting for the funding round itself. Share premium, transaction costs (legal and advisory fees related to the raise), convertible note conversions, and SAFE instruments all need to be accounted for correctly on the balance sheet. Getting this wrong means your equity section doesn't reconcile to your cap table, which becomes a problem at the next raise or during due diligence.
Failing to implement basic internal controls before an issue arises. It's far easier to set up approval workflows, spending policies, and segregation of duties proactively than to retrofit them after a problem has been discovered.
Before funding, finance was a back-office compliance function. After a significant raise, it becomes a strategic capability that directly impacts your ability to execute, communicate with stakeholders, and make the decisions that determine whether you succeed.
The businesses that navigate this transition well are the ones that treat finance with the same urgency and investment they give to product, sales, and engineering. The capital is in the bank. The plan is agreed. Now the numbers need to keep pace with the ambition.
Scale Suite delivers embedded finance and human resource services for ambitious Australian businesses.Our Sydney-based team integrates with your daily operations through a shared platform, working like part of your internal staff but with senior-level expertise. From complete bookkeeping to strategic CFO insights, we deliver better outcomes than a single hire - without the recruitment risk, training time, or full-time salary commitment.
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