Interview with Julian Lange, Member of the Finance Leaders League

Get to know Julian Lange , CFO in various scale-ups for 17 years. Besides his role as CFO with Upvest , he’s also angel-invested in quite some start-ups. Let’s dive straight in!

?Could you share which finance tools and functions you deem critical during the early days of a company??

??I’m generally quite excited about the development in Finance tools over the last years: Whether it’s for expenses, virtual credit cards, invoice approvals, or financial planning, tools have gotten so much easier to implement, so much more intuitive to use, and often bring completely new solutions to age-old Finance problems.

However, for the early days of a company, I think you should focus a lot more on processes than on systems: So many things are still developing or in flux early on in a startup’s journey, all the way down to the business model. And because of that, being able to adjust your processes quickly is of the utmost importance. So when you value speed (and probably also cost) over productivity/scalability at the start, this usually means Excel and manual processes rather than fancy tools.

So ultimately, I’d say the only system that really matters early on is your accounting system. To the extent you have a choice here, choose wisely. Although - in many countries - the choice is quite limited and often consists of (mainly) old-fashioned tools.

?Financial planning usually starts on a spreadsheet, when is the right time to transition to an FP&A tool??

??When complexity starts to become a problem with your Excel solution, you should go for a tool that’s more stable than an Excel sheet and can more easily be worked on simultaneously by multiple people. This complexity can come from your business branching out into ever more geographies or products (e.g. at my first startup, Marley Spoon, we had production sites in five different countries at some point and multiple product lines in some of them), from the level of detail you want to get into in certain sales or cost categories (e.g. we had multiple production sites in some of our countries at Marley Spoon and the logistics setup varied by region), or simply from your FP&A team growing so you may not want different people simultaneously making changes to different parts of the model (e.g. to avoid mistakes like inadvertent changes).

Also, things like different scenarios are relatively clunky to model in Excel, in most planning tools (esp. the more modern, third-generation ones that have recently started to pop up) this is done much more easily and with more stability. This I’d say is a requirement that has come much more to the forefront in these current, more volatile times. So if anything - given modern FP&A tools also tend to be much easier to implement than previous generations - I think you can consider transitioning earlier than maybe was true even five years ago (i.e. once you can afford it after either your Series A or B).

?What should companies double down on when selecting a tool?

??Make sure you really understand how much time the tool will take to implement and how easy (or not) making minor tweaks to the too,l later on, will be. If possible, ask for and speak to reference clients or consultants about their real-life experiences.

Why is this so important? Life in start-ups/scale-ups moves and changes faster and chances are your Finance team is fairly small. So taking more than a couple of months to implement a tool or having to expand large efforts to refine your tool after go-live, is too much distraction from the higher value-add activities your company needs you to work on (i.e. helping the business grow, decrease costs, or support in important strategic decisions like market or product launches).

?Once selected, how does the transition usually go? Are there any pitfalls fellow finance professionals can avoid??

?? I think the main pitfall is getting dragged into (higher value) day-to-day Finance work and thus dragging out the implementation. Especially in start-ups/scale-ups there are so many things to analyze, better understand, partner with other functions on, it’s sometimes hard to justify working on a system topic. So I would very consciously choose the timing of the implementation (e.g. well before the next planning cycle), give yourself an ambitious timeline (no more than a couple of months with modern planning tools, possibly only weeks if you don’t have a complex company setup), and/or stage the roll-out of functionalities (e.g. start with workforce planning, which will make many people’s lives across the entire org easier, then go to more advanced/FP&A focused use cases), so you are less likely to get distracted from your other (higher value) Finance work for too long.

?You are part of the Finance Leaders League for years now. How did the network help you in the past?

?? The network keeps amazing me: You think you have some sort of unique problem: some obscure service or vendor you are wondering about, some new exotic country your company is expanding to and you need a recommendation for a tax advisor? It doesn’t matter, most questions get answered, and there is always someone who knows something or someone.

It saves a lot of time when you throw out the name of a tool you want to look into and several people can share their own evaluation or even real-life experience. You get peace of mind when you can quickly compare notes with your peers, e.g. on a technical accounting topic. And, finally, we also actively share open jobs and also candidates, which are probably among the highest-impact examples of things happening in the network.