What should you set up in finance after raising seed?

The week a seed round closes is one of the better weeks in a founder's life. The money is in the bank, the team is excited, and the plan that existed in a deck can finally start. Finance is usually the last thing on anyone's mind.

It's also the moment the company's finance obligations change the most. There are now investors with information rights written into a shareholders' agreement. There's more cash than the company has ever held, with nobody quite sure who is allowed to spend it. Payroll is about to double or triple. And the next investor, the one who'll lead the Series A, will look back at the next eighteen months of numbers and judge the company by how well they hold up.

None of this needs a finance department. It needs a handful of things done in the right order.

The first 30 days: close the round properly

Money arriving doesn't mean the round is finished. Shares have to be allotted, filings made and records updated, and the rules on timing are strict. Under the Companies Act, money received for a private placement has to be kept in a separate bank account and the shares allotted within 60 days of receiving it. A return of allotment then has to be filed with the Registrar. Where investors are foreign, the investment also has to be reported under the foreign exchange rules within a set period. Your company secretary or lawyer will handle these, but the founder should know they exist, because a missed deadline can mean refunding money or paying penalties, and it will surface in the next round's diligence.

Once shares are allotted, update the cap table and reconcile it to the allotment records, the shareholders' agreement and any ESOP pool the round created. A cap table that doesn't match the statutory register is one of the most common findings when the next investor looks.

Then read the shareholders' agreement for what it requires of you. Information rights usually specify what you send, how often and by when. Some agreements list reserved matters that need investor consent, such as budgets above a certain size, new debt or senior hires. Put every deadline in a calendar now, while the document is fresh.

The first 30 days: control the cash

A company that had ₹40 lakh in the bank now has ₹6 crore, and the habits that worked at ₹40 lakh don't scale. Three simple controls matter more than any software.

• ·Approval limits. Decide who can approve a payment up to what amount, and require two people above a threshold. Write it down, and set the bank's mandates to match.
• ·A cash policy. Decide where surplus funds sit and on what basis, with safety and access to cash ahead of return. Have it approved by the board, because it's investor money and they'll want to know.
• ·A minimum cash line. The balance below which the founders agree to act. It's easier to set when the balance is high than when it's falling.

It's also the right moment to separate anything personal that has crept into company accounts: founder expenses paid from the company card, the laptop bought through a personal account and reimbursed without a bill. Tidy it now, while the amounts are small.

The first 30 days: get payroll ready for the team you're hiring

Statutory registrations follow headcount. PF generally applies once an establishment has 20 or more employees, and ESIC once it has 10 or more in most states, though many companies register earlier. Professional tax depends on your state. A company going from 8 to 25 people in six months will cross those lines quickly, and contributions due from the date the threshold is crossed are easy to miss.

Under the labour codes in force since November 2025, the salary structures in your offer letters also matter more than before. Wages for PF and gratuity purposes have to be at least half of total pay, so a structure built with a low basic salary costs more than it appears to. Budget hires at their real cost, not their salary.

The first quarter: a monthly rhythm

By the end of the first quarter, the aim is a finance rhythm that runs without the founder rebuilding it every month.

It starts with a monthly close. A fixed working day by which the previous month's books are closed: bank accounts reconciled, revenue recognised in the month it was earned, expenses accrued even when the bill hasn't arrived, payroll and statutory liabilities posted. This is usually done by an external accounting firm at seed, and that's fine. What matters is that it happens on time, every month.

Next comes the MIS. A monthly pack with the P&L against plan, cash and runway, and the handful of operating metrics that drive the business, with short commentary. Build the format once and keep it stable. Write down how each metric is calculated, because the definitions you choose now are the ones a Series A investor will test.

Then a plan for the runway you've raised. Not the fundraising model, which showed what the business could become, but a month-by-month plan for the next twelve to eighteen months: hires with start dates, spending by team, revenue targets with owners, and cash. It's the thing the MIS will be compared against.

Finally, a board rhythm. Agree how often the board meets, what the pack contains and how far ahead it goes out. Early boards are often informal, but minutes and resolutions still need to be recorded properly.

An illustrative first year

Here's how the money typically moves, with invented figures. A company raises ₹6 crore at seed with ₹50 lakh already in the bank and a monthly burn of ₹18 lakh. The plan hires 14 people over nine months, which takes burn to around ₹48 lakh a month by month ten.

On paper that's roughly 16 months of runway. But the plan assumes every hire starts on time at their salary, and when the finance lead builds it at fully loaded cost with realistic start dates and the annual software, audit and legal costs in the right months, burn at month ten is closer to ₹53 lakh and runway falls to about 14 months. That leaves perhaps eight months before fundraising has to begin in earnest, not the fourteen the founders had in their heads.

Nothing about that is a crisis. It's just information the company needs in month one, not month nine.

Before the next round: build the evidence

The Series A investor will do diligence on everything that happens between now and then. The work of passing it happens month by month.

• ·Audit-ready books. Your first statutory audit after a round is often more demanding, particularly around revenue, ESOPs and provisions. Choose an auditor who can handle what's coming.
• ·Reconciled tax records. GST credit claimed against what your suppliers have filed, output GST against revenue in the books, TDS receivable against what customers have reported. Do it monthly, not in the week before a data room opens.
• ·Contracts in one place. Customer agreements, vendor contracts, employment letters, IP assignments and ESOP grant letters, filed as they're signed.
• ·ESOP records that match. Grants approved by the board, grant letters issued, vesting tracked, and the pool reconciled to the cap table.
• ·Consistent MIS. Eighteen months of monthly packs that tie to the books is the strongest evidence a company can show.
• ·A data room that builds itself. A shared folder structure where each of the above lands as it's created.

Mistakes that show up a year later

Most of the finance problems a Series A diligence team finds were created quietly in the months after seed, by reasonable people who were busy. The usual ones:

• ·ESOP grants promised in offer letters but never approved by the board or recorded against the pool.
• ·Revenue from annual prepaid customers recognised in full when invoiced, which flatters one quarter and hollows out the next four.
• ·Contractors who are, in practice, full-time employees, with none of the statutory contributions an employee would carry.
• ·Investor updates that used one definition of revenue in March and a different one by September, without saying so.
• ·Founder salaries set well below market and never revisited, which makes the cost base look leaner than it will be after the next round.
• ·Bank accounts and payment gateways that were never reconciled, so nobody noticed the refunds and chargebacks until the audit.

None of these is hard to avoid. They're just easy to put off, and each one takes far longer to unpick after a year than it would have taken to do properly in the first month.

Who does what at seed

Most seed companies need three kinds of help, and it's worth being clear which is which. An accounting firm or CA keeps the books, files GST and TDS returns and handles tax. A company secretary handles board meetings, allotments and filings with the Registrar. And someone senior in finance, often fractional at this stage, owns the MIS, the plan, cash forecasting and investor reporting.

The founder shouldn't be doing any of those jobs, but has to read the output of all of them. The first full-time finance hire usually makes sense once transaction volume or team size means the monthly close can't be done well from outside, which for many companies is somewhere around the Series A.

What can safely wait

Seed rounds tend to trigger enthusiasm for tools. An ERP, an FP&A platform, a spend management system, a full-time CFO. Most of these solve problems a company of 20 people doesn't have yet, and several of them lock in processes before the business has settled what it needs.

Good accounting software with an audit trail, a disciplined spreadsheet for the plan and MIS, and a shared drive for records will carry most companies comfortably to Series A. Spend the money on the team and the product. Spend the attention on the monthly rhythm.

A checklist for the next 90 days

1. 01Confirm with your company secretary that allotment, filings and foreign investment reporting are complete.
2. 02Reconcile the cap table to the allotment records and the ESOP pool.
3. 03Put every information right and reserved matter from the shareholders' agreement into a calendar.
4. 04Set payment approval limits and bank mandates, and have the board approve a cash policy.
5. 05Check PF, ESIC and professional tax registrations against the hiring plan.
6. 06Agree a monthly close date with your accountants and hold them to it.
7. 07Build the MIS format and the metric dictionary, and send the first pack.
8. 08Build the plan for the runway you've raised, at fully loaded cost.
9. 09Set up the data room folder structure and start filing into it.

It's not glamorous, and none of it will be mentioned in a launch post. It's the reason the next round goes faster.

Who wrote this

Shafneed is the founder of Simplify, a finance clarity and investment readiness practice working with founders across India. He writes about the questions founders bring before a decision, not after it.