The ultimate financial stack for SaaS startups

Life at SaaS startups moves fast, and you need fintech solutions that can keep up with all aspects of your operation — from banking, bookkeeping, forecasting, analytics, and beyond. With the wrong tech stack, you’ll get bogged down with manual processes that are rife with errors. But with the right one, you’ll be able to focus on scaling your business.

Whether your startup is pre-seed, seed, Series A, or somewhere in between, setting up a smooth-running financial tech stack is critically important. To build a scalable and interoperable system that handles high growth, recurring revenue models, and investor needs, you’ve got to carefully hand-select your tools.

In this article, we break down the ideal finance tech stack for SaaS startups, and show you what you’ll need to consider, based on the stage of your business. Plus, we share common mistakes to avoid when building your system. By the end, you’ll be well equipped to choose solutions that set the stage for scaling, clean books, and investor-ready reporting.

An effective finance stack is one that’s highly reliable for managing day-to-day processes, while still being able to scale as your business evolves over the long term. Regardless of whether you have an in-house controller or you’re running lean, your financial tech stack should contain the following elements.

Centralized data

Your business needs a single source of truth for all your financial workflows, including GL codes, billing, payroll, and expenses. With clean, clear, and accurate data flowing into your tech tools, the stack will be able to support month-end close, deferred revenue, prepaid expenses, audits, and more, without headaches.

Automated workflows

The best tech stack in finance doesn’t require babysitting, since important tasks happen without much human intervention. With bank feeds, rules-based workflows, automation, and AI, the system completes routine tasks and surfaces any irregularities.

Interoperability across tools

If your tools don’t work together, your tech stack isn’t really a stack — it’s more of a jumble. An effective finance stack requires strong native integrations with your core tools, as well as stable APIs and webhooks to create custom flows. Data model consistency for things like customer IDs is also a must.

Scalability for growth

Your business will evolve, so your tech stack should offer support for your company’s growing needs, such as multiple currencies, international taxes, global compliance, and more. Plus, it should be consolidation-ready and able to roll up multiple entities into one set of financials with ease.

Internally and externally compliant

The ideal financial tech stack for SMBs (small- and medium-sized businesses) is one that’s big on security, permissions, and governance. With spend controls, contract visibility, and role-based permissions, it should keep everything in check.

There’s no one-size-fits-all guide for building a modern finance tech stack. What your SaaS business needs will depend on many factors, like your business stage, growth goals, and available resources. Here are the core components you’ll find in most effective finance technical stacks.

Banking and payments

Your banking should be the hub for real-time cash visibility, automated reconciliations, and a clean month-end close. Modern tools like Mercury enable easy vendor payments, reconciliation support, and business credit cards.

Bookkeeping and accounting

The best accounting software acts as your company’s system of record. It offers consistent categories, a clean audit trail, clear close workflows, and more. Opt for tools like Mercury combined with platforms like QuickBooks Online, Xero, and Pilot.

Billing and invoicing

SaaS startups need clean subscription lifecycle tracking, strong reporting, proration logic, failed payment retries, and more. Tools like Stripe, Chargebee, and Paddle are popular options.

Expense management

Spend limits and controls, automated receipt collection and coding, and accounting automations are key here. SaaS startups often go with Mercury cards, Ramp, and Brex.

Forecasting and FP&A

You need to know how long your runway is and what will happen to your business if your churn begins to increase. Tools like Finmark, Mosaic, and Pry help you with scenario modeling, deal analysis, financial planning, and more.

Payroll and benefits

Payroll is likely your largest expense item. Do it right with tools that offer automated journal entries into accounting and correct expense mapping by department. Good options include Gusto and Rippling.

Cap table management

If your cap table is chaotic, making equity decisions and fundraising can be painful and lead to catastrophic mistakes. Tools like Carta and Pulley can help with clean reporting for fundraising and an accurate cap table.

When it comes to the best practices for building a finance tech stack for startups, it’s important to align it with the current stage of your business journey. What a pre-seed SaaS startup needs will not be the same as a Series A startup, for example. 

Here’s what you should consider, based on your stage of business.

Pre-seed

At the pre-seed stage, it’s important to stick to lightweight bookkeeping and billing tools, as well as straightforward banking solutions. You can support these with some manual tracking. Essentially, you want to know how much cash you have and how quickly you’re burning through it, but you don’t need heavy forecasting or reporting tools.

Seed

At the seed stage, it’s time to build repeatable systems and reduce manual work. So, you can add accounting, payroll, and expense tools at this stage in your business. These will help you make month-end close less painful, and will result in more accurate books, cleaner payroll mapping, and better-controlled spend.

Series A

Get ready to introduce forecasting tools, automated workflows, and detailed analytics. At the Series A stage of business, your tech stack provides actionable intelligence. It should help you figure out your best growth levers as well as what your runway will look like in different scenarios. Clean financial operations are still essential, but now with deeper reporting.

The best tech stack in finance doesn’t happen by accident. You’ve got to carefully select your tools, align the tech stack with your stage in business, and make sure you avoid these common issues: 

• Sprawling without integration: Make a point to only choose solutions that work with your existing finance tools. Don’t get excited by every shiny finance tool you see, especially when it doesn’t integrate with your current solutions.
• Choosing enterprise tools too early: When you’re not one of the big guys, you don’t have the processes (or funds) to take full advantage of their tools — yet. Enterprise tools have advanced features you don’t need, and they require complex technical integration and maintenance.
• Skipping over data hygiene: Garbage in, garbage out, the saying goes. To avoid a mess, focus on ensuring your data is clean and accurate, especially when it comes to customer and vendor IDs, categorization, and reconciliation.
• Underbuilding for too long: As your business grows, your tech stack must grow with it. You can’t rely on manual processes and spreadsheet-led accounting when you’re trying to expand your startup.

Not all tech stacks look the same. But what do effective SaaS finance tech stacks have in common? Mercury.

Here’s why Mercury is the foundation of successful startups, whether they’re pre-seed, seed, or Series A: 

• All-in-one banking, payments, and spend: Mercury goes beyond traditional banking, with everything you need under one roof: FDIC-insured checking and savings accounts through partner banks; seamless payments via ACH, wire, or check; and spend management tools to effortlessly control expenses. 
• Built-in bill pay and business credit cards: Accounts payable automations harness artificial intelligence to pay bills faster and prevent unauthorized payments. Business credit cards help to build business credit from day one, and give you 1.5% cashback. 
• Native accounting integrations: For in-depth insight into your company’s financial activities and transactions, you’ll need seamless accounting integrations with tools like QuickBooks, Pilot, and Xero. Track invoices, generate expense reports, and create data visualizations with ease. 

Plus, Mercury also offers personal banking solutions, so you can keep your business and personal accounts separate, while you optimize your money on both side.

From bookkeeping and accounting to cap table management, your financial tech stack helps keep your SaaS startup on the right trajectory. Mercury makes it easy to build a solid foundation — no matter what stage you’re in. Plus, we know how much confusion and chaos you deal with as a SaaS founder, so we clarify the complexity with helpful resources you can count on. 

Explore Mercury’s role in your modern SaaS finance stack and learn about how our banking, bill pay, cards, and accounting automations support your company’s growth every step of the way.