The Ultimate Guide to Building Your Startup's Financial Tech Stack

A recurring trait among accomplished founders is their thoughtful strategy in building a strong financial tech stack. As we'll explore, the realm of accounting, people operations, and tax services involves plenty of technological choices. However, in each category, a handful of dependable options usually stand out.

In this article, I'll explain how we evaluate fintech for our own clients' back offices, and then offer some solutions we recommend.

Accounting Software Selection Criteria When Building Your Financial Tech Stack

First, we use six criteria when evaluating software:

1. Does it fit our client niche? We support early-stage, venture-backed tech startups. If the software is built for freelancers or large enterprises, it’s probably not a fit for our clients.
2. Is it simple to use for us and our clients? There is a place for heavy ERP systems that require lots of training, but it’s not at airCFO. We want software we can set up ourselves and our team and clients can operate. The day will eventually come when our own clients outgrow us, and we need software their team can take over.
3. Is it best-in-class U/X? - I’m not just talking about the user interface, but also the integrations and customer support. I don’t care what the software is doing, things will break and when they do we need fast support to get back to work.
4. How much? Obviously a large factor given our client niche.
5. Will it scale?- You want something that will support you for several years so you can avoid high switching costs every year.
6. Who is behind the software?- Startups tend to fail, but they also build great software. So we need to believe the company behind the software is established enough to still be around in a few years.

And with that, here are our recommendations:

Bank Accounts For Your Financial Tech Stack

• Mercury - We love working with Mercury at airCFO. They seem to tailor their entire experience toward startups.
• Brex - Aside from a free, simple and easy-to-use checking account, Brex offers other features too such as corporate cards & bill pay.
• Big Banks - e.g. Chase & Bank of America. These don't check the startup niche box, but they check all the others. And they offer in-person banking, if that is important to you. After what happened with SVB in 2023, we are asking our clients to consider putting some of their funds with one of these too big to fail banks, too.

Accounting General Ledger For Your Financial Tech Stack

• Quickbooks Online (QBO) - Quickbooks has over 80% of the small business market share. I’m not sure if it's true, but I wouldn't be surprised. QBO checks all the boxes.
• Xero - Functionally it’s similar to QBO, but it feels more niche and some accountants like that. Xero is also preferred by our international startup clients.
• Sage Intacct & Netsuite - We don’t see these very often, but these are both logical next steps when a company outgrows QBO or Xero. That said, these are significantly more complex and expensive.

Spend Management For Your Financial Tech Stack

• Ramp, Brex, Airbase and Expensify - These are by no means the same, but they all compete in a relatively new category of “startup spend management platforms.” Each offers multiple products such as accounts payable, employee reimbursements, and corporate cards. We like them all.
• Bill.com & Divvy - These are paired because mostly because Bill.com acquired Divvy a few years ago. Bill.com is one of the original A/P tools, and Divvy offers several other spend products. You don’t have to use them together, but they make a logical pair.

Invoicing & Payment Processing For Your Financial Tech Stack

• Stripe - If Quickbooks owns the accounting general ledger market, Stripe owns startup payment processing. It is by far the choice with our SAAS startup clients to collect payments via credit card.
• Quickbooks & Intuit Payment Network - If you have larger clients & invoices and don't take credit cards, I'd suggest Quickbooks for invoicing. It works great, and it’s always preferrable to use less software, not more.

Payroll For Your Financial Tech Stack

• Rippling - We use the Rippling PEO at airCFO. The tech is great, and the customer support is just as solid.
• Gusto - When I started airCFO 10 years ago, Gusto was the easy choice. It’s still a great option, and if I had to guess ~ 50% of our clients are on Gusto.
• Justworks - Justworks changed the game for offering PEOs to startups.
• Deel, Remote.com, Papaya - These are the choices for international employees. Depending on your situation, each of these can become the “employer of record” to allow your employees to get nearly all the employee benefits.

Cap Table Management For Your Financial Tech Stack

• Carta - Similar to Gusto changing startup payroll, Carta changed cap table management. Prior to Carta you needed a lawyer for most of it, but now you can do most without your lawyer (and save fees).
• Pulley - Pulley is a newer, lighter, and less expensive version of Carta.

Startup Business Insurance For Your Financial Tech Stack

• Embroker - One of the worst parts about obtaining (and renewing) business insurance is the pain of paper forms and having to fill out those same questions...every..single...year. Embroker changed that with their platform.
• Vouch - They are laser focused on our same niche: venture-backed tech startups.

Sales Tax For Your Financial Tech Stack

• TaxValet - TaxValet is to sales tax, what airCFO is to accounting & tax. We’re both tech-enabled service providers (heavier on the services, than software).
• Avalara - They are the 800 lb gorilla in this space and a trusted name. They have software solutions to cover just about every sales tax need imaginable.

Other Tech To Consider When Building Your Financial Tech Stack

These last two recommendations don’t fit neatly into one of the main categories, but we work with both and they have earned a name drop.

• Middesk - Remote startups tend to hire employees in a whole bunch of different states. Unfortunately, each time you hire a person in a different state, you need to do a bunch of compliance setup. Middesk solves this.
• Stable - It’s a virtual mailbox. Admittedly I haven’t tried others, but I love Stable.

Aside from those, there are no strong artificial intelligence (AI) fin-tech recommendations just yet, but we are starting to experiment with them at airCFO. Things are moving FAST and so I’m sure we'll add some AI criteria or a separate category next year.

Until then, happy back-office-tech-stack building!