Founders obsess over technical debt in their code. They’ll delay shipping a feature to refactor a messy database or rewrite a buggy API. They know that quick and dirty code today means a slow and broken product tomorrow.
Yet, when it comes to their finance stack, these same founders are building a house of cards.
In the rush to launch, early-stage startups often stitch together a patchwork of point solutions: a high-street bank for the main account, a separate expense card provider, a third tool for FX and a spreadsheet to glue it all together.
It works until it doesn’t.
Airwallex spoke to investors from Accel, Octopus Ventures, Cherry Ventures, Firstminute capital and 13books Capital to understand the hidden cost of financial technical debt, tracing how early-stage shortcuts evolve into growth-stage blockers.
The process debt horizon
“Everyone starts with a spreadsheet, and that is fine on day one,” says principal at Firstminute capital Michael Stothard. “But at some point, you start building debt. There is technical debt, obviously, but there is also people debt, process debt and financial tech debt.”
Every time a founder manually exports a CSV from their bank to upload it to Xero, they are paying interest on that debt in the form of time. Every time a new local entity is set up with a different local bank, the consolidation tax increases.
The quicker you can get off spreadsheets, generally, the better.
“The longer you leave yourself in ‘Excel World’, you build up debt,” Stothard says.
Rich Bolton of Octopus Ventures agrees. Shifting away from manual processes is critical for speed, he says.
“The quicker you can get off spreadsheets, generally, the better,” he says. “You can start doing your deferred income recognition quicker and link in your billing.
“The quicker you can do that, the better it works.”
The silo trap: when revenue doesn’t talk to cash
The most dangerous form of financial debt isn’t just manual work — it’s blindness. Christian Nentwich, partner at 13books Capital, points out a common flaw in technical startups: the siloing of critical data.
“It’s not really normal that your revenue stack, finance stack and pricing engines sit in different departments and don’t talk to each other,” Nentwich says.
You want to bring it a bit earlier and bring more functions together in it.
When these systems are fragmented, a startup loses the ability to answer basic questions, such as: Why did we sell at this price? Is the customer actually paying? Are we collecting all the cash?
“Finance is usually the last thing you do in the back office,” Nentwich says. “But actually, you want to bring it a bit earlier and bring more functions together in it.”
The headcount patch and international breaking point
When the patchwork stack starts to creak, many founders make a fatal mistake: instead of fixing the software, they hire more people.
Matt Robinson, partner at Accel, calls this the “bloated finance” trap. “The worst step is when you hire a CFO who doesn’t actually want to do the job, so they want to hire a financial controller, and someone to do accounts receivable (AR) and accounts payable (AP),” he says.
If you’re not able to distinguish between your numbers in different geographies because your accounting solution is single-geo, it’s very difficult to make smart investments.
This is the ultimate form of financial debt: a permanent, expensive headcount hired to manually bridge the gaps between disconnected systems. A unified, automated stack could do the same work with a fraction of the team.
For many startups, this debt finally gets called in when they expand internationally.
“If you’re not able to distinguish between your numbers in different geographies because your accounting solution is single-geo, it’s very difficult to make smart investments,” Robinson says.
Expansion also downgrades user experience. While startups often begin with slick neobanks in their home market, Nentwich says, international expansion often forces them into the arms of legacy global banks.
“As soon as you have to work with a global bank, your user interface goes to the 1990s,” he adds. “You go from ‘great’ to ‘very difficult’ quite quickly.”
The cure? A unified infrastructure
The solution to financial technical debt is the same as code debt: refactoring. But unlike code, you don’t have to build it yourself.
“The tools have gotten a lot better,” says Stothard. “There are people like Airwallex who are building products that entrepreneurs really want.”
“The best case I’ve seen today is a finance leader that’s leaning into modern tools and some of the newer, agentic solutions.”
By consolidating banking, expenses, treasury and FX into a single unified platform, startups can avoid the “Franken-stack”, and silos that create debt in the first place.
Financial technical debt is a choice. You can stitch together a dozen tools and hire a team to manage them, or you can choose a unified financial platform that scales with you,
Startups need to do that early, says Cherry Ventures partner Dinika Mahtani.
She adds: “The best case I’ve seen today is a finance leader that’s leaning into modern tools and some of the newer, agentic solutions.”
Click here to discover how Airwallex can help AI scale-ups avoid the ‘Franken-stack’.
