Which Finance Stack is Best for Your Brand?

The modern finance stack is no longer an amalgamation of loosely connected solutions. It encompasses an entire ecosystem of personnel, capabilities, and specialty tools that form the bedrock of your operational and strategic finance function.

While this evolution of the finance stack is undoubtedly a boon to high-growth companies, it can also be a bit overwhelming to navigate. As you scale, your finance function will only become more complex, and you might find yourself wondering which tools, in-house hires, and capabilities will drive the most value.

In this guide, we'll break down the essential components that make up the finance stack for your specific growth stage.

What are the components of the finance stack?

There are two sides to every finance stack: the operational side and the strategic side. Both sides are critical to a company’s success, but each requires its own distinct personnel, activities, and tools to be effective. Where the operational side refers to backward-looking functions—think bookkeeping, accounts payable, expense management — the strategic side refers to the forward-looking initiatives that drive profitability and growth. This is where strategic finance activities like forecasting, demand planning, and scenario modeling come into play.

While the meat-and-potatoes operational functions may feel the most pressing in those early days of trying to keep cash in the bank, it’s essential to prioritize strategic finance as well. After all, when you hit your growth phase, you won’t get very far without a foundation to capitalize on your evolving finances.

As you assemble your finance stack, you’ll want to build out each side with an eye to the following building blocks: 

Personnel

As you begin building your finance team, you’ll probably ask yourself the million-dollar question: Should I outsource or hire in-house? Your answer should depend on your growth stage. While outsourcing can be beneficial early on for many reasons (primarily from a cost savings perspective), full-time employees (FTEs) deliver more operational control, better quality work, and the promise to stick around. 

You’ll also want to think about whether you need a specialist or a generalist. If you’re a CPG, for example, you might be tempted to go with an accounting firm that specializes in that industry. However, you’ll have to weigh whether their skillset is broad enough to cover all the essential bases of your finance function, especially if you’re operating with a lean team.

Lastly, you’ll need to consider what level of experience you need from your employees. While many growth-stage brands can get by with one seasoned generalist, late-stage brands will commonly start layering in a full-blown VP of finance and some junior hires.

Activities

Like your personnel, your finance activities are beholden to your growth stage. While you’ll need foundational activities like basic accounting and cash flow analysis from day zero, you can likely hold off on highly specialized functions like sensitivity analysis for a while.

The same goes for the rigor and professionalism you bring to these activities. Companies doing under $5M in sales revenue, for instance, won’t need to set up large data warehouses or get their financials audit-ready just yet. However, these will become essentials as your revenue creeps further into the eight digits.

Tools

There’s no shortage of nimble accounting and FP&A software to choose from — but this ample selection makes finding the right tools for your growth stage a tall task.

You might be tempted by tools that automate all your tasks for you. Or you might prefer to build an in-house solution that enables you to precision engineer your processes to the intricacies of your business. Growth-stage companies might, for instance, be more inclined to the former, whereas enterprise companies may seek the flexibility of the latter. 

You’ll also want to carefully calculate the short- and long-term ROI of every tool you invest in. Is a $30K software platform worth it when you’re just creeping into the $10M revenue stage, for instance? On the other hand, is the spreadsheet-based FP&A function you’ve been using since inception agile enough to serve you post-scale?

Our recommended finance stack, based on your growth stage

After working with dozens of high-growth consumer brands, our team at Drivepoint has narrowed down the key elements of the finance stack across each growth stage.

Whether you're a startup trying to find product-market fit or an enterprise doing well over $100M annually, we've got a finance stack that will help you crush your growth goals.

Startup ($0-$5M)

Companies at this stage are typically building their systems as they go, trying to find product-market fit, and still learning about their audiences and how to reach them. Their finance stacks will naturally be a little leaner.

On the operational front, you’ll have:

Personnel:

• Outsourced accounting firm

Look for an accounting firm that specializes in what you do — whether that’s CPG or another vertical.

Activities: 

• Basic accounting
• Chart of accounts
• Tax and inventory accounting
• Accounts Payable (AP)/Accounts Receivable (AR)

At this point, you're doing basic accounting, getting ahead of all tax and compliance issues, and laying the bedrock of your operational finance function.

Tools: 

• QuickBooks Online
• Finaloop 

You may have just gotten your first purchase order and started panicking about all the calculations you need to make. But resist the temptation to shell out for all the bells and whistles; durable accounting tools like QuickBooks will serve you just fine in the early stages.

On the strategic finance side, your stack should look like this:

Personnel:

• Founders/COO
• FP&A support (service) or a fractional CFO

In the early days, your founder or COO — ideally both — should be deeply involved in your company’s day-to-day strategic finance operations. This person may, however, want to enlist a fractional CFO or FP&A support service to free up bandwidth and streamline processes.

Activities:

• Daily cash/KPI tracking 
• Unit economics analysis
• Basic sales/inventory planning
• P&L forecasting (12 to 18-month model)

Since your finance function isn’t very complex (yet), homegrown processes tend to work better than automations. Whether you’re cash tracking or examining your margins on a per-product basis, completing these functions manually is the best way to get familiar with all the granularities. 

Pro tip: Be sure not to neglect inventory accounting. You’ll want to build a sturdy P&L that gives you visibility into the next three inventory cycles so that you can efficiently plan, distribute, co-pack, and ship everything.

Tools:

• Excel (with templates)
• Google Sheets
• Free apps
• Drivepoint

You can hold off on investing in a full-service FP&A software until later on in the startup stage, but that doesn’t mean you have to build everything from scratch. There’s an abundance of templates and free apps out there built to make your life easier. Then, once you edge closer to the upper limit of this range, you can think about layering in a premium solution like Drivepoint.

At this point, you can expect to spend around $3-6K per month on your finance stack. It's crucial not to stretch your budget too far yet, even when you land that large account. It’s also best to ensure the operational side of your stack is well-established before venturing into the strategic finance side.

Growth stage ($5-$20M)

These companies have validated their product and are actively building the systems and processes to support their growth. Here is when the first layer of functional leads and dedicated finance hires start to trickle in as they lay a foundation for scaling.

On the operational front, you’ll have:

Personnel:

• Finance Lead (FTE)
• Outsourced accounting firm

Since you’ll want to make just one finance hire at this stage, you should decide whether you want that person to be an all-star accountant or an FP&A guru. Although your new hire will support every arm of your finance function, you can continue to outsource the side that they don’t specialize in.

Activities: 

• Accounting by channel
• Inventory accounting
• Deduction/trade management
• AP/AR

At this stage, you might be starting to make your first omnichannel moves, whether that means selling on Amazon or going wholesale. To support this pivot, you’ll need to lean further into inventory accounting, plus get into deduction and trade management as you fine-tune your pricing strategies and negotiate with vendors. You’ll also need to start analyzing financial impact at the channel level to understand how each contributes to the overall business.

Tools:

• QuickBooks Online
• Confido
• Cin7
• Settle

QuickBooks will continue to be your source of truth for accounting at this stage. However, if you’re a wholesale-forward brand, you should consider supplementing it with a Trade Promotion Management (TPM) system like Confido or an inventory management system like Cin7 for more granular visibility into stock levels. More advanced AP and AR tools will also help you handle your increasingly complex accounting inbox.

On the strategic finance side, your stack should look like this:

Personnel:

• Finance Lead (FTE)
• FP&A support (service)

Activities:

• Weekly cash flow
• Monthly 3-statement modeling 
• Demand planning
• Variance analysis
• Scenario analysis

Now, you can pivot from daily to weekly cash flow tracking, and you’ll want to exchange your homegrown model for a classic three-statement model. Since this will be a tall task, plan on either hiring a service to build one for you or building one through a tool like Drivepoint. You should also start professionalizing your demand planning and using variance analysis to gauge how your performance is stacking up to your plans.

Finally, this stage should mark your first significant foray into scenario modeling. With retail rollouts and product launches on the horizon, you’ll need to know how each move will impact your bottom line.

Tools:

• Excel
• Drivepoint
• Looker Studio

The days of free apps and templates are now behind you; it’s time to start making some key infrastructure investments. This means either connecting Google Sheets to a data warehouse or using Looker Studio to start syncing up your data sources. FP&A software is also a must-have now for supporting continued growth without having to make additional hires.

At this stage, costs increase considerably, typically to the tune of $20-40K per month. This is due to the expansion of your finance stack from both a personnel and tools perspective. 

Our biggest recommendation? Don't overbuild your team or tech stack. Although salespeople can be very persuasive, enterprise-level solutions are often too sizable for companies at this stage and can quickly eat into your team's limited bandwidth just for maintenance alone. 

You should also be wary of overhiring. A few choice tools will take you far, and too many FTEs or contractors could overwhelm your P&L.

Scaling stage ($20-$100M)

This is the stage where distribution ramps up alongside new product lines and channel partnerships. Operational and strategic roles begin to shift toward in-house as finance becomes more of a team sport and visibility becomes paramount to investors.

On the operational front, you’ll have:

Personnel:

• Finance Lead (FTE)
• Controller (FTE)
• Outsourced accounting firm

The superstar you hired in the previous stage will still be at the helm of your finance function. But, as you scale channels and product lines, they might find themselves getting more sucked over to the strategic side. Hiring a controller to oversee your accounting and manage your outsourced relationships will ensure the operational side is still in ship shape.

Activities: 

• Accounting by channel and department
• Inventory accounting
• Deduction/trade management
• Standards adherence

Now that finance is getting more cross-functional, you may be adding new departments and classes to your general ledger (GL), and you probably have an increasingly curious board scrutinizing your P&L with an eye to the finer details. To appease them, you’ll also have to start taking standards adherence even more seriously.

Tools:

• QuickBooks Online
• NetSuite
• Confido
• Cin7
• Settle
• SPS/Crstl

At this stage in the game, you can consider graduating from QuickBooks’ basic accounting capabilities to NetSuite’s full-fledged Enterprise Resource Planning (ERP) system. With many distribution channels to manage, you’ll want to think about investing in an electronic data interchange (EDI) partner like SPS as well.

On the strategic finance side, your stack should look like this:

Personnel

• Finance Lead (FTE)
• FP&A support (service)

You likely won’t be adding any strategic hires right now, but that doesn’t mean you should leave all the FP&A knowledge to your finance lead. Now is the time to ensure multiple people on your team understand the ins and outs of your strategic finance operations so you can reduce reliance on a single person and start building a strong internal source of truth.

Activities:

• Monthly rolling forecasts
• Weekly demand planning
• Detailed variance analysis
• Advanced scenario analysis 
• Collaborative budgeting 

From rolling forecasts to demand planning and variance analysis, you should be doubling down on the functions you started to build in previous stages. It’s also time to upgrade your scenario modeling. Now that you’re making huge decisions around product expansions, manufacturing channel diversification, and big hires, you need a reliable way to predict the downstream effects those moves will have on the whole business.

As with the operational side, these activities necessitate much more cross-functional collaboration. To ensure different department heads aren’t sitting in a meeting arguing over the definition of customer acquisition cost or trade spend, everyone should be building collaborative budgets. Together, you should figure out how the actions and spend of multiple teams — marketing, ops, customer success — are contributing to the company’s underlying financials. 

Tools:

• Excel
• Drivepoint
• Atomic
• Fuse
• Looker Studio
• BigQuery

In addition to the tools you added to the previous stage, you might consider adding more specialized inventory planning tools. And if you didn’t already start building your own BI tooling and setting up a data warehouse in the previous stage, you definitely should now.

While your fintech stack will more than double in monthly costs at this stage (around $50-75K per month), it will also become an incrementally lower percentage of your revenue as you scale. But, to keep things tight, you should still watch your outsourced accounting costs. If you're operating across many channels, those hourly rates can really add up, often exceeding the salary of an FTE. 

Late-stage ($100M+)

Once you've hit this growth stage, the primary path forward is unlocking a more dominant market presence and prepping for an IPO or exit. Your number of in-house hires will skyrocket, and the tools you onboard will frequently require custom implementation.

On the operational front, you’ll have:

Personnel: 

• VP of Finance/CFO (FTE)
• Controller (FTE)
• AP/AR (FTE) 
• Staff Accountant (FTE)
• Outsourced accounting firm

You now have the resources to start really building out your team. You’ll want to add an AP and AR hire and a staff accountant to juggle all the receivables from different retailers. And, although you don’t strictly need to hire a CFO or VP of Finance, you’re certainly in a position to entertain it.

Activities:

• Accounting by channel and department
• Inventory accounting
• Deduction/trade management
• Standards adherence
• Contract/vendor management

Your operational activities probably won’t change too much at this point, but your accounting will get more detailed, and contract and vendor management will need to become its own area of focus.

Tools: 

• NetSuite
• Confido
• Cin7
• Tipalti
• SPS/Crstl
• Ironclad

Although your operational finance stack will also be pretty similar to the previous stages, it might make sense to layer in more complex AP and AR tools and invest in a dedicated contract and vendor management solution like Ironclad.

On the strategic finance side, your stack should look like this:

Personnel:

• VP/CFO (FTE)
• FP&A Lead (FTE)
• Analyst (FTE)
• FP&A and data support service

This is finally the moment to really grow your internal FP&A team. In addition to considering a potential VP of Finance or CFO to preside over both sides of your finance function, you’ll be in the market for a new FP&A hire as well as a new analyst to handle your mounting data needs.

Activities:

• Department budgeting
• Workforce planning
• Team-centric KPIs/planning/dashboarding
• ML and AI forecasting models
• Automated sensitivity analysis
• Advanced working capital planning

With a fully stacked strategic finance team, you can make highly tactical decisions that support the continued growth of your business. Whether you’re running sensitivities or improving your margins, there are plenty of small changes you can make that have the potential to deliver huge returns. And now that you have the transaction volume to support larger data undertakings, you should start leaning into AI to optimize everything from your forecasting to your marketing strategies.

Tools: 

• Excel
• Drivepoint
• Workday Adaptive Planning
• Atomic
• Fuse
• Looker Studio
• BigQuery

Been tempted by enterprise tools for a while but unable to justify them? Now is your time. You have the staff to implement the customizations that tools like Workday Adaptive Planning require, and using them will supercharge your internal processes.

This influx of FTEs and enterprise-level tools will have your expenses sitting around the $100-250K per month range. However, with all the optimizations and future-forward technologies you’ve added to your finance stack, you can still save money every step of the way.

Why Drivepoint’s FP&A software is an essential element to your finance stack

No finance stack is complete without Drivepoint’s best-in-class FP&A software. This seamless addition to your strategic finance function integrates with other solutions, including QuickBooks and NetSuite, plus has plug-ins for Amazon, Shopify, and Stripe.

Best of all, Drivepoint’s data-driven forecasts and advanced scenario modeling capabilities are designed to scale with your company, from the scrappy growth stage all the way up to enterprise. In fact, the support Drivepoint provides vastly outweighs an internal finance team and can even replace a fractional CFO, empowering you to achieve impeccable financial health at a fraction of the cost.

But don’t just take our word for it. Ask any one of the dozens of high-growth companies we work with, including Oats Overnight, Simple Modern, and Graza. All of these brands used Drivepoint to support their rapid and successful omnichannel expansions — and continue to unlock ever-high levels of sustainable growth.

Want to know more about what Drivepoint can do for your finance stack? 

Schedule a demo today

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