What’s your Finance & Operations Stack?

Whether you’re a founder, ‘Utility Infielder’ as coined by Fred Wilson, or a VP of Finance & Operations at a start-up, time is your most finite resource (money is a close second).

The back-end processes of running and keeping your business legal can take up all of your time, if you don’t set-up your operations stack properly. A little bit of time upfront will save you hundreds of hours and let you focus your time on the things that matter most, product/market fit or scaling up your business.

Two to three times a week I get asked by other founders about the finance & operations technology I use to keep Tandem running. Here’s a detailed list of what I use, why (I use them) and what other technologies I want to try (or have tried and hated).

I would love it if others would jump in and share what they use and what they like about it. There’s a large community of developers & marketers who have created communities to help each other, but that doesn’t exist for operators — here’s a start, please add your thoughts!

ZenPayroll (rebranded to Gusto): I never thought I would have this much love for a payroll company. When we first set-up our business, ZenPayroll was not around and we joked about pivoting to payroll because everything else was so terrible.

I save an hour or two every month over Paychex, our team loves it and my bookkeeper loves it.

ADP is the massive industry incumbent and known for terrible customer service to small business.

Paychex was the best priced option, but the software could not be more clunky if it was built by the original healthcare.gov team. My team complained about it monthly and I found it so confusing that I regularly had to reteach myself how to use it.

Quickbooks Payroll is cheap but requires you to do the tax calculations and payments? Ain’t no one got time for that.

TriNet takes most of the work off of your plate but at $100+ per month for every employee is crazy expensive for a start-up. Put that money elsewhere.

Oh and ZenPayroll is cheaper than every other option I’ve looked at. I could not recommend this more.

Zenefits: Combine Zenefits with ZenPayroll and you now have 90% of the value of Trinet for 10% of the cost. Zenefits itself is free (they make money as your insurance broker.) Benefits include automating your health insurance for team-members and slowly adding new features to automate your whole HR process, including team-member on boarding (no more paperwork!), off boarding, COBRA, etc.

I absolutlely love the benefits product, but like many companies growing at their speed they are a mess internally. I pay for ZenPayroll through Zenefits and they forgot to charge me for 6 months. They then hit my bank account all at once without any notification. I have since received emails from them about mistakes they made that in turn had nothing to do with my account. Their customer service team acts like they know they have a good product and I won’t leave (kind of feels like dating someone who’s out your leaugue and you both know and he/she takes advantage of it.) BUT the product is so good, I find it easy to put up with the poor customer service (so they’ll probably keep treating me like they’re out of my leauge.)

I know there are a few competitors that have popped up. Including Namely which appears more focused on ‘fast-growing’ companies, which I read as ‘we’re expensive.’

**Small update: Both ZenPayroll/Gusto and Zenefits are merging into each other’s space. This is not surprising, but it means you can probably pick just one of them now. Personally, I believe that Gusto is a product and customer service driven organizaiton while Zenefits is a sales driven organization. I’d definitely go with Gusto.

eShares: As a former investment banker (I usually don’t admit that publicly) and now founder, I’m acutely aware of how worthless, yet expensive 409a valuations are. We started using eShares for their subscription 409a service (it’s way cheaper than any other options) and have fallen in love with their cap table service. No more updating excel (even if I love excel, see ibanker past above) or emailing my lawyer to see who has the latest cap table. It also automates option paperwork for team-members — combined with ZenPayroll & Zenefits — has completely removed my need for keeping any team-member paperfiles and makes team-member on boarding and off boarding so much easier.

Expensify: We use Expensify for expense reports. They are missing one key feature: if someone puts a charge on their corporate card that I can’t accept, I need to be able to reduce it from payroll or another reimbursement. Otherwise, I like the product. They read & upload all receipts that are emailed to me and connect directly to my corporate CC statement. It requires about 5 minutes of training to get a new employee using it, which is nothing compared to other systems.

I had a pretty awesome excel expense report system built, but I couldn’t build enough safeguards to keep team-members from screwing it up. At it’s low price point, Expensify is definitely worth it.

Recruiting: One area of HR that I have not found an ideal option is Applicant Tracking Software. I have heard good things about lever.co — we’re not hiring enough people for $200 a month to make sense. But every time we do bring on a new team member, I wish I had this tool. Any other suggestions?

SquareOne Bank: We use Square One Bank, which along with Silicon Valley Bank, are the defacto start-up banks. I don’t recommend using a small business banking option at your local consumer bank. Their technology and design is substantially better, but they have terrible customer service for small businesses. The interfaces of SquareOne & SVB still need to catch up to this decade, but the customer service is worth the lack of technology.

Tax Accountant: Get yourself a good tax accountant who set up their own shop (you pay huge premiums for brand names). Pay them to finalize your books every month (they should have a bookkeeper at their firm)— this is cheap and worth it. Don’t do it yourself even if you know how. Once you have a VC on your board, you’ll probably be required to use a bigger name.

Lawyers: Same thing with lawyers. Find someone you like and trust who worked at a bigger firm and has since set-up their own shop. I’ve worked with really good and really bad lawyers. Good lawyers find ways to save you time and money and tell you when you need to hire a specialist. Bad lawyers say they can do anything you need and charge you for their learning process and mistakes they make in creating/redoing the work — big firms are notorious for overcharging. Stay away.

Oh and every lawyer you meet will promise you intro’s to investors. Don’t believe them.

QuickBooks Online: I use Quickbooks Online and I hate it. While their recent massive product upgrade is much better, it’s still buggy and lacks basic features I need (like invoicing in other currencies). I really want to try Xero but at our stage it’s just not worth my time to switch.

That’s my list. Hope this helps one person. As you can tell I value ease of use, low cost and removing the need for paperwork. Please contribute and make this better!