chapter 11

Achieving Financial Excellence: How to Master Finance for Non-Finance People

Achieving Financial Excellence: How to Master Finance for Non-Finance People

I did not knowingly sign up for the role of Chief Financial Officer (CFO) when I began working for myself and growing my business. Looking back, that perspective was naive because operational excellence in finance is the heartbeat of any company. Without deliberate and steady financial practices, a business of any size operates with an irregular heartbeat that’s at risk for a heart attack at any moment.

If you’re an entrepreneur and small business owner like me, chances are high that you feel similar pressures: getting your clients to pay on time, protecting your company from dry spells, making payroll, growing your team (but not too quickly), upgrading office space, and a litany of other finance-related imperatives that require critical thinking and careful decision making.

Naturally, the buck stops with leadership. If you don’t have a finance-minded co-founder — which, in my experience, many agencies and tech startups don’t — then congrats: you too are a CFO, whether you welcome that responsibility or not.

That self-awareness may be terrifying, but it need not be. Excelling at finance does not require a finance degree. What it does require is an aptitude to structure data, a commitment to repeatable processes, a sensibility for deal making that doesn’t undermine your business operations, a healthy bias toward fail-safes that provide protection when unfortunate events happen, a willpower for holding others accountable, and, above all else, an irreproachable respect for cash and cash flow, akin to how you treat your own personal finances.

There are many ways to learn these lessons. My company and I learned them the hard way.

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Surviving and recovering from a heart attack

My company, Rocket Code, survived a finance-induced heart attack by embracing the fundamentals mentioned above.

At the time, no founder was really managing finance. All purchases were made using a debit card. Invoices were sent to clients without much detail or consistency to net payment terms. Projects were occasionally undersold just to close the deal, and to get some cash into the business to make payroll. Proper income statements and balance sheets did not exist. There had been no pursuit of a business line of credit. Cash flow projections more than a couple days out did not exist. And there was no central finance plan that aggregated fixed costs, variable costs, healthcare costs, payroll with payroll taxes, and related data into a unified dataset that could be managed and used for forecasting.

That was mid-2015. Rocket Code was 13 people, and fighting to break even on a million dollar business.

By early 2017, we were 35 people with a very healthy double-digit bottom line on a $4 million revenue run rate.

Our recovery required transforming every part of our financial operations. As a result of that work, I now consider myself trained in the real-world art of finance. Perhaps oddly, I now really enjoy that part of the business. To me, developing a mastery of finance has granted me and Rocket Code a confidence that neither of us ever had. I am far from an expert, and Rocket Code is far from a paragon of financial superiority, but we have achieved a level of operational excellence in finance that is pragmatic, predictable, and profitable.

If you crave similar results for your company, I invite you to read on. I will share the methods, tools, and disciplines that proved successful for us.

It all begins with sales.

Methods of success

If finance is the heartbeat of a company, then sales is the lifeblood. But all sales (dollars) are not created equal. Dollars from rushed deals that do not include thoughtful estimates and project management standards can be worse than not taking the dollars in the first place. Negative profitability is worse than zero profitability.

We experienced a few negative projects in early 2015 that contributed to our mid-year heart attack. To minimize the likelihood of that happening again, we instituted a standard sales operations (ops) process for all new work. Our sales ops process includes the following core artifacts:

  • Capabilities deck that:
    • Presents our mission statement (our reason for being).
    • Describes our value proposition.
    • Features the brands we work with and why they chose us.
    • Details our service offerings.
    • Teaches what we do not do.
    • Introduces our team.
    • Illustrates our way of working.
    • Invites the prospective new client to take the next step by sharing more about their business — its objectives, position within the industry, etc.
  • Engagement letter written in plain English that authorizes us to start work with a new client that is eager to collaborate with us on the strategic research and planning necessary to inform a thoughtful solution design to an identified business opportunity or problem.
  • Master Services Agreement (MSA) or Service Level Agreement (SLA) containing specific terms, conditions, and definitions that protect both parties.
  • Project charter (or agreement) containing the project-specific objective, scope, exclusions, assumptions and constraints, customer materials needed, governance plan, deliverables, timeline, valuation, payment schedule, and related terms.

No new client engagement starts without an executed engagement letter, which authorizes a retained capacity to be paid up front for all strategic consulting services. It also allows for additional accruals should the client want Rocket Code to go above and beyond in their engagement work.

From there, we work toward project charters for specific projects aligned to the client’s business objectives, above and beyond the scope of our retained strategic consulting capacity. Before work begins on those projects, clients must accept our standard MSA. These measures position all engagement and projects to begin with low friction, close alignment, and a high degree of success for both parties — ROI for the client and profitability for Rocket Code.

It’s worth mentioning that our sales ops process wasn’t always as low-friction as it is today. In the immediate aftermath of our heart attack, we overcorrected on legal protections in our contracts. We used to have a 24-page MSA written in traditional legalese that required a rigid Statement of Work (SOW) for every project. Our success with these documents was mild; our projects were far better protected and set up for success, but our sales cycle time-to-close rate ballooned, which directly impacted cash flow. Also, clients did not enjoy having to digest and negotiate these hefty contracts; a less-than-ideal beginning to any new client relationship.

After repeated use of the documents and receiving feedback from clients on them, we concluded that these documents were over-engineered for their intended purpose. From there, we worked with our legal team to responsibly scale back the intensity and, in the case of the SOW, replace it completely with a more natural document type — a project charter written in plain English. With more approachable documents in hand, we immediately improved our sales cycle time-to-close.

When the first sales cycle is for a new brand client, we work hard to nurture a positive and high-performing relationship through empathetic account management disciplines. Fostering trust through empathy with a client is paramount to getting paid on time, and sometimes early. We have one client that pays our NET15 invoices within 48 hours, every single time. We want our clients to enjoy paying us for our important work together, and to deliver them the first invoice that they actually want to pay.

Fostering trust through empathy with a client is paramount to getting paid on time, and sometimes early.

To enable this form of high-touch account management, we schedule all our work (consulting services and project-based work) in two-week sprints. This schedule requires that our accounts team remains engaged with all our clients in a very predictable manner and, consequently, delivers progress and value regularly. Our iterative workflow methodology includes the following high-touch points:

  • Strategic consulting and planning sessions
  • Project kickoff meetings
  • Sprint planning meetings
  • Sprint review meetings
  • User acceptance testing kickoff meetings
  • Pre-launch systems admin training meetings

When sales and account management are working well, we have a healthy volume of receivables to manage. To remain focused and organized, we record all of our account receivables into our finance plan by month. Each entry is described with the following details:

  • Invoice number
  • Client name
  • Issue date
  • Due date
  • Payment received date
  • Method of payment
  • Amount due
  • Notes (e.g. an associated purchase order number)

Our finance plan is a custom-engineered spreadsheet involving multiple tabs, individual spreadsheet files, and boatloads of logic statements. Our client services team is responsible for informing our finance team when new work has been authorized. When all of the receivables are properly entered and organized by month, our dashboard view allows us to quickly see where revenue is trending for the current month and future months in the context of our total expenses (payroll, health care, fixed costs, etc.). This also automatically computes our profit margin for respective months, quarters, and year to date.

While we are very proud of our finance planning spreadsheet, we know that it alone isn’t enough to achieve operational excellence in finance. That’s where other important tools of the trade come in — and there are a lot out there. Let’s explore those that we have found most useful.

Tools of the trade

Having a comprehensive finance plan should be your keystone tool. I built ours from scratch in a spreadsheet — actually, an integration of several highly customized spreadsheets. However you build yours is up to you, and should be based on the unique needs and attributes of your business.

If you do not care to build one yourself, a tool like Dryrun may be a good starting point for you. Dryrun is a web-based system that helps you forecast cash flow, budget, and sales scenarios. We have friends who run other agencies who use and swear by Dryrun as a critical financial system for their business.

Next in order of importance is our accounting system of record. At Rocket Code, we use Xero. They are proving to be the go-to accounting tool for entrepreneurs and startups once they hit a certain critical mass of business. Simpler accounting tools like Freshbooks also exist, which are geared toward freelancers with less complexity in their financial operations.

Our Xero account is linked to all of our financial accounts to ensure that all transactions flow into Xero for bookkeeping. Regardless of what accounting system you choose to use, make sure that you link all of your accounts to it. To get you started, consider the following account types:

  1. Bank checking account
  2. Bank line of credit account
  3. Credit card account(s)
  4. Paypal account
  5. Payment processing account(s)

At Rocket Code, Automated Clearing House (ACH) transactions are our preferred method of payment because it’s direct, timely, and cheap compared to credit card processors. That said, we recognize that not all clients are comfortable remitting payment by ACH. So, as a backup, we do allow payment by credit card if a client asks for it.

Specifically, we favor using Stripe and Square for credit card processing. Stripe is a fantastic option for storing a client’s credit card information for auto-billing. Recurring payments, such as monthly retainers for strategic consulting services is a quality use case for Stripe. Alternatively, Square is an excellent option for issuing invoices payable by credit card. Square pays out funds within 24 hours, which is a nice cash flow benefit that other providers do not offer.

However you send invoices, be sensitive to how and when you send them. In my view, a client should never be surprised by an invoice. Before an invoice arrives, the amount owed and when it’s due should always be shared. High-touch account management performed with empathy should ensure that surprises do not happen.

In our workflow model, the account team is responsible for communicating any upcoming invoicing or payments due during their regularly-scheduled governance meetings with their assigned clients. In addition to those communications, an account manager may send an “invoice preview” email in advance of the invoice itself, as a soft reminder of what is about to be sent and why.

Here’s a sample of one of our invoice preview emails:

To: Potential Client
From: Web Designer
Subject: Invoice Preview for Projects


Wow, it’s December! The year isn’t over yet, but the team and I have already begun reflecting on just how awesome this year has been. Partnering with you on your important business needs remains one of my most cherished things. We are all grateful for you, and all of the work we have the privilege of working on together.

We are excited to end the year very strong. There's lots of foundational work to complete this month in advance of your big 2017 priorities — including [PROJECT ONE], [PROJECT TWO], [PROJECT THREE], and [PROJECT FOUR]. We are excited to get started.

For now, here's the November invoice preview…

The habitual friendly reminders:

1. You will receive two invoices, one for [PROJECT A] and another for [PROJECT B], both active projects.
2. ACH is our preferred method of payment. Please let us know if you need to remit payment via an alternative method.

If you are going to process payments via ACH, here is our ACH information to make your life as easy as possible:

Bank: [HERE]
Account: [HERE]
Routing: [HERE]

The November 2016 invoice totals:

INV0XXX: $12,345.67 for [PROJECT A]
INV0XXX: $12,345.67 for [PROJECT B]
Total: $24,691.34

As always, the invoice emails will include a PDF version wherein you can see the line-items.

Insights and analysis:


That’s it for now. We'll kick out the invoices next.

I’m so glad to hear that you and the family are feeling better, and that you’re energized to be back in action just in time for the holiday season. I look forward to connecting directly with you again in our next strategy briefing session.

Until then, to the moon and best wishes.

Although finance is a world of numbers, words matter. Take time to carefully craft your finance-related communications. Consider such efforts valuable investments in client goodwill that will repay themselves many times over.

That said, many aspects of operational excellence in finance do come down to standard numbers and policies. Such standards are beneficial finance controls that promote cash flow predictability. And when in doubt, pursue actions that add predictability to your finance plan.

Free Project Invoice Template
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Predictability prevails

At Rocket Code, we treat processes as critical to various business functions, like plays a football team runs in order to win. With that mindset, we created a “playbook” of processes — which we call our Standard Operating Procedures (SOP) — for the finance team that, when executed, positions us to thrive.

Our finance playbook includes the following detailed SOPs:

  1. Accounts receivable (AR)
  2. Accounts payable (AP)
  3. Month-end accounting close
  4. Quarter-end accounting close
  5. Year-end accounting close
  6. Cash flow management
  7. Departmental budgeting
  8. Travel planning
  9. Capital investments
  10. Annual performance-based bonuses

Some of our SOPs are simple because they involve only a small set of stakeholders with a minimal number of inputs. Others are more intricate because they involve more stakeholders, require more inputs, and have a more nuanced process of reviews and approvals. In each case, we tailor every SOP to provide clarity, consistency, repeatability, and scalability to these important finance functions.

Teaching the nuances of each SOP would require a book unto itself. Furthermore, the Rocket Code way of managing AR (or any other SOP for that matter), may not be the ideal state for how you need to manage AR for your business. However, while the details of each SOP are certainly subject to individualization, a guiding framework for how to construct an SOP in the first place has merit.

A SIPOC model is my go-to process engineering framework. I learned it when I studied and became certified in Six Sigma, a process improvement technique. SIPOC is an acronym that stands for the following:

  • S—Suppliers
  • I—Inputs
  • P—Process
  • O—Outputs
  • C—Customers

The framework comes from the world of manufacturing, but is perfectly adaptable to any organized methodology. If it helps, think of Suppliers as Stakeholders, and Outputs as Outcomes. Additionally, Customers need not only be clients, but can also include internal beneficiaries of the outputs, such as cross-functional team members or an executive.

Structuring every SOP using the SIPOC framework gives each one a common language, syntax, and expectations. Every Rocket Code employee is familiar with this framework and, therefore, can quickly ramp up on a new SOP regardless of what it addresses. Such predictability is a stabilizing force in all areas of the business, especially finance.

Beyond our governing SOPs, which are macro-level strategies, we define micro-level tactics that aid our day-to-day financial operations. The most essential tactic is a throwback to the engagement letter — specifically, the requirement that we do not begin work until the client pays their first retained strategic consulting payment. Similarly, when it comes to project work that spins out of our strategic consulting engagements, we always require a deposit payment to get started on project work.

Deliberate payment schedules are the next important tactic we use to inject predictability into our cash flow model. At Rocket Code, payment schedules apply only to projects, and come in one of three options:

  • Small projects = 100 percent due up front
  • Medium projects = 70 percent due up front, 30 percent due at authorization
  • Large projects = 40/30/20/10 payment splits based on project milestones

Having structured payment schedules that slightly favor the service provider are necessary to protect against very real and common threats. Such threats include, but certainly are not limited to, the following client behaviors:

  • Clients becoming disincentivized to remain engaged throughout the project lifecycle, particularly during testing phases, because of lower stakes.
  • Clients holding a large final payment hostage until the service provider acquiesces to new scope requests for no additional charge.
  • Clients disappearing when the work is delivered with their final payment unpaid.

In the world of services work, time is money. While that concept is cliché, it’s nevertheless a critical constraint that is often undermined by not taking payment schedules seriously. You risk a disservice to your other clients if you do not institute safeguards on your time.

Net payment terms are a similar safeguard to payment schedules. NET15 is our standard for project-based milestone payments, which means that all our invoices are due 15 calendar days following their issue date. As a business practice, we are far more willing to negotiate on net payment terms compared to payment schedules — allowing more money to be due later is more likely to spawn the very client behaviors I mentioned above that we are trying to prevent.

If you are looking to grow your business by landing larger clients, prepare to dance on net payment terms. Large companies that have a procurement department managing vendor relationships will often insist on drawn-out net payment terms. NET75 is not unheard of, especially with enterprise brands. Sometimes you cannot negotiate your way out of those terms, but sometimes you can. We recently negotiated a NET75 situation down to NET30 with a Fortune 500 company.

How long it takes a client to issue payment is just half of the equation. The method by which the client makes payment is the other half. We only accept electronic forms of payment. Specifically, ACH is our standard. If you accept checks, then be prepared to further extend your cash flow forecasts because of the added time it takes to receive and deposit a check. And, of course, there’s always the risk that the check never arrives, or bounces when it does.

How long it takes a client to issue payment is just half of the equation. The method by which the client makes payment is the other half. is an interesting system you may want to consider. Some of our clients pay us electronically via, which outputs an ACH payment directly into our bank account. One of the nice things about using is that it sends an automated email every time a client schedules a payment. That notification includes the precise date when the payment will hit our account. Notifications like that may seem trivial at first, but at scale they are a delightful form of predictability.

Other forms of automated reminders can provide similar value. Automated reminder emails sent to clients for past due invoices are most notable. In our accounting system, Xero, we enabled automated reminders to send on specific past-due triggers. For example, we have a specific email template that sends to clients when they’re over five days past due. The wording of that email is friendly, nudges them to please pay, and casually reminds them of our late payment terms (which live in our MSA). If the client still does not pay after 15 days past due, then another automated email reminder is sent that includes a revised invoice with our late fee applied.

Establishing methods of financial governance and predictability can and will feel daunting at times. When those feelings swell, take comfort in knowing that you are doing the right thing for your business. Just keep calm.

Keep calm and carry on

Someone once said that “chaos is a ladder” — the premise being that excellence, authority, and even greatness can be gained from otherwise challenging times, if the will exists to seize the moment.

I believe that our finance-induced heart attack in mid-2015 was one of those moments. It was frustrating, stressful, and scary. But rather than caving to the chaos, Rocket Code rallied and persevered. It was a forging moment for our company and for me as a leader. While I do not wish to repeat that experience, we are a significantly stronger and more mature company for having endured it.

I share our tale in the hopes that you can learn the same lessons, without having to endure the hardships. However you choose to engage with these concepts and methods, I hope you develop a greater appreciation and joy for finance.

For me, I am proud to be responsible for my company’s financial operations. The role of CFO is no longer a burden; it’s a privilege.

Now, over to you. Go forth and conquer.

About the author

Matthew Gartland is a partner and COO at Rocket Code, a new generation of agency powering connected engagement between brands and customers at the nexus of media, technology, and commerce. Discover more forward-looking opinions and analysis about web, media, product, design, commerce, and more at

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