The company had grown quickly on the strength of its product. Finance, understandably, had taken a back seat. A part-time bookkeeper handled the essentials, the founder still approved most payments personally, and reporting meant exporting a spreadsheet from the accounting system whenever someone asked. Then a lead investor moved toward a term sheet — and the picture changed overnight. Diligence would mean scrutiny the current setup simply couldn't withstand:
The challenge
- •No monthly close process, so financials were always weeks out of date
- •Revenue recognized inconsistently, with no clear view of MRR, churn, or true gross margin
- •Cash and accrual figures that didn't reconcile
- •No historical financials packaged in a form an investor could review
- •Key metrics living in the founder's head rather than in a reportable system