Building Your Financial SOPs: Beyond Basic Bookkeeping

Hey there, welcome back to Agency Finance Letters.

Post $50K MRR, your financial operations can't run on founder memory and random spreadsheets anymore. Yet most agencies at this level still operate with financial systems built for when they were one-third their current size.

The result? Financial blind spots, reactive decisions (based on inaccurate data), and countless hours wasted putting out fires that shouldn't exist in the first place.

The Financial Systems Gap
As your agency scales, the gap between your operational complexity and your financial systems widens. You've likely experienced these symptoms:

Founder Bottlenecks 
You're still approving every expense / salary payout. Invoice questions still land in your inbox. Cash flow projections exist only in your head. These founder bottlenecks create dangerous single points of failure and prevent you from focusing on strategic growth.

Data Delays 
Financial information arrives too late to be actionable. Monthly reports show problems you could have fixed weeks ago. Cash crunches appear without warning. In a growing agency, financial data needs to be real-time, not retrospective.

Manual Redundancies 
Your team manually enters the same data in multiple systems. Reconciliations require hours of spreadsheet work. Invoice creation takes days instead of minutes. These manual processes don't just waste time—they introduce costly errors and are impossible to track accurately on a large scale.

The SOP Framework That Works
Financial SOPs aren't just about documentation—they're about creating systems that scale with your growth. Here's the framework we implement with our clients:

1. Role-Based Financial Controls - Clear separation of financial duties based on roles, not individuals:

• Invoice creation and approval flows

• Financial reporting responsibilities and timelines

• Cash management alerts

This prevents both bottlenecks and compliance issues as your team evolves.

2. Financial Reporting Calendar - Establish rhythms that make finance proactive, not reactive:

• Weekly accounts receivable reviews

• Weekly forecast updates

• Monthly performance analysis

• Quarterly strategic reviews

2. Financial Metrics - You need to be tracking your KPIs. You can’t improve what you don’t measure:

• High level metrics, e.g. Revenue, gross profit, opex, team costs, net profit. 

• Performance metrics, e.g. Customer Acquisition Cost, Lifetime Value, Net Retention, Churn by client and MRR. 

• Utilisation / capacity - to figure out which team members have capacity and when you need to make the next hire. 

• Budget vs. Actuals - Tracking your budgeted spend vs. what you actually spent over time to stay accountable and strategically approach your goals. 

This schedule can help keep consistent accurate financial reporting in place which is essential for decision making and growth as you scale. 

Remember: Financial SOPs aren't about bureaucracy—they're about building a foundation that supports your agency's growth rather than restricting it.

Till next week, 

Joey