Creating Your Financial Policies and Procedures Manual

Aug 17, 2022


When you think about things you need to build for your startup, it’s probably a long list. And you might be hesitant to add anything to it. But there are a couple of areas where putting in some extra work now pays off in spades down the road. 

A Financial Policies and Procedures Manual is a prime example. No, it’s not a particularly fun to-do. But it lays out a clear framework that every member of your team can use. And as you grow, that gets more and more important. 

In fact, putting this manual in place now can help you avoid some serious headaches down the road. How things like petty cash and credit cards are handled might not feel critical when you’re a small, tight team. But as you hire more and more people, it’s important that you have clear financial policies and procedures in place. With the manual, you eliminate the potential for miscommunications and minimize the risk of misunderstandings. Everyone has a place they can go for answers about what’s expected and required. 

Creating that Financial Policies and Procedures Manual gets easier when you have a template to follow. So let’s look at how to build one. 

What every section should cover

No matter what procedure you’re laying out, there are certain things you should always clearly articulate. Specifically, you should spell out:

  • Who the policy applies to
  • The timeline of the procedure
  • The repercussions for not complying

Say, for example, that you build a section on expense reports. You should say who needs to submit expense reports, when those expense reports are due, and what happens if that deadline is missed. 

Now, let’s talk about specific sections most startups should outline in their manual.

Authority and how relevant disputes are resolved

Who can cut checks? Who can access the company’s accounts? Who makes spending decisions? How much control does your Board have here? Do founders have carte blanche? 

Create policies around who has financial authority in your startup and how that authority is structured. This might look like an org chart that calls out who has decision-making power and how people below that level request what they need. 

It might also save you trouble down the road to lay out how disputes will be resolved. What if you discover that one of your Board members has a conflict of interest, for example? Having a clear process in place (e.g., the authority to call a meeting with a mediator) can prevent you from getting backed against a wall should something come up.


This is likely going to be a pretty significant portion of your manual. It should include:

  • Federal, state, and municipal payroll tax withholding laws with which your startup must comply
  • Recordkeeping procedures to ensure you can prove that compliance
  • Payment timelines for hourly and salaried employees
  • Time tracking procedures for hourly employees
  • How paychecks are cut and distributed to employees
  • How contractors are paid
  • How managers request more payroll when they need to hire more people
  • The benefits that are offered and how they’re disbursed
  • Your paid time off policy, how it’s tracked, and how employees are compensated
  • How final paychecks are handled for employees who resign, retire, or are terminated
  • How employees can request information about their paycheck
  • How discrepancies are addressed and how corrections are made, when necessary

Payroll is going to be a huge part of your business — if it isn’t already. Creating clarity for your HR team and all of your employees can make life easier for everyone. 

Spending and reimbursements

Who can cut checks, use petty cash, or use a company credit card? Who needs to get approval for spending, and what process do they need to go through to get that approval? How are these expenses recorded? Who reviews them periodically to ensure everything complies with company policy?

Similarly, if an employee uses their own funds for a reimbursable expense, how do they create an expense report? When is the deadline to submit that expense, and when can they expect payment? Just as importantly, what constitutes a reimbursable expense? If your startup plans to offer a per diem for traveling salespeople, marketers at events, etc., this is a good place to lay it out. 

Essentially, you want to lay out oversight for every dollar leaving your business. And you want to closely guard the keys for that spending by laying out a definitive policy on who has a say in how your company’s money gets spent. 

Customer policies and procedures

How do you bill your customers? How do you collect overdue payments? How is customer financial information protected? 

This portion of your Financial Policies and Procedure Manual will vary heavily depending on the type of product/service you offer and how your customers pay you. Ultimately, though, it’s important to create clarity around how your business bills for and collects revenue. 

Vendor/supplier/contractor relations

How are new contacts in these areas vetted? Who makes the purchasing or hiring decision? 

Once a relationship is established, what kind of payment terms does your business set up (e.g., net 30)? How do vendors, suppliers, and contractors submit invoices? How are those invoices paid (e.g., direct deposit, check)? 

This portion is particularly important if you know your startup will rely heavily on third parties to function. You need this portion of your manual to lay out how those relationships should operate and to establish key protections, like proper vetting procedures.  


At the end of the day, your Financial Policies and Procedures Manual needs to be tailored to your startup and how it should function. This is just a brief overview of some of the most important components to include, but it’s by no means a comprehensive guide. That’s because some procedures or policies only apply to specific types of businesses. 

If you want help assessing what your startup’s specific manual should include based on how it functions and where it faces financial risks, we can help. Our team of experienced accountants helps tech startups position themselves to thrive. To consult with us about your own Financial Policies and Procedures Manual, contact us