RSMUS.comGrowth is the goal for every biopharma company, but scaling biotech finance processes is often more challenging than leaders expect. New clinical programs advance. Headcount increases. Companies raise capital. Strategic partnerships expand. For some organizations, commercialization shifts from a long-term goal to an immediate operational priority.
What many leadership teams underestimate is how quickly complexity compounds along the way.
A finance organization that effectively supported a 50-person biotech may begin to struggle at 150 employees, even if the finance team is larger and more experienced. The issue is rarely a lack of talent or effort. More often, the business evolves faster than the processes, controls, and systems supporting it.
Most life sciences organizations encounter several finance inflection points as they grow. The first often occurs when headcount scales rapidly. The second may arrive when the company adds complexity through additional legal entities, international operations, acquisitions, or strategic partnerships. A third typically emerges as the organization prepares for commercialization, where reporting, planning, procurement, and compliance requirements become significantly more sophisticated.
At each stage, finance must deliver more visibility, tighter controls, faster answers, and more strategic decision support. Too often, teams try to meet those expectations with infrastructure designed for an earlier phase of growth.
That is when cracks begin to appear.
1. Financial reporting: When visibility starts to break down
Financial reporting is usually the first process to come under pressure.
In the early stages, reporting requirements are relatively simple. Finance teams can answer most management questions using standard accounting reports, spreadsheets, and manual analysis. With a single entity, limited departments, and a focused business model, that approach often works remarkably well.
Growth changes the equation. Transaction volume rises, but reporting complexity often increases even faster.
A clinical-stage biotech that once tracked a single development program may suddenly manage multiple studies, manufacturing activities, international subsidiaries, grant funding requirements, and strategic partnerships. Executives want visibility by program. Investors expect greater transparency. Board members need timely answers backed by reliable data. Finance suddenly supports a much broader group of stakeholders than it did just a few years earlier.
The warning signs:
- Longer month-end close cycles
- Greater reliance on spreadsheets
- Manual consolidations
- Inconsistent reporting across teams
- Significant effort required to produce management reporting
Many finance teams spend days preparing reports that generate only minutes of discussion. That often signals the reporting process has become harder to maintain than the insights it delivers. The tipping point usually arrives when spreadsheets stop serving as analytical tools and start functioning as part of the accounting infrastructure itself.
For many organizations, this is when spreadsheets stop being enough. Some move to a more modern ERP like NetSuite or add an FP&A tool to their existing platform. Regardless of the path, the objective remains the same: create a single source of financial information that leadership can trust.
Rather than maintaining offline consolidations and separate reporting workbooks, finance teams can report by departments, entities, programs, and locations using a common data structure. This allows leadership to rapidly make decisions using consistent, reliable data.
2. Controls and audit readiness: Building governance that scales
Internal controls are often the next area to come under strain.
Rapid growth creates pressure to keep the business moving. New vendors require onboarding. Employees need system access. Contracts need approval. Payments must be processed. When resources are limited, finance teams naturally prioritize execution. The approval process that worked for a 40-person biotech rarely withstands another funding round, a major hiring initiative or expansion into new markets.
Companies often discover these weaknesses during audits, fundraising activities, due diligence, or IPO readiness assessments. Processes that once relied on emails, Slack, spreadsheets, and institutional knowledge must suddenly withstand scrutiny from auditors, investors, and potential acquirers.
The warning signs:
- Approval evidence spread across emails
- Manual tracking of approvals
- Segregation-of-duty concerns
- User access that has evolved without formal review
- Significant effort required to support audits
For life sciences organizations, these challenges often emerge at the same time operational complexity increases. Finance teams must support growth while demonstrating that appropriate controls exist and are working as planned.
Organizations that most successfully navigate rapid growth build controls directly into financial systems instead of relying on emails, spreadsheets, or disconnected approval processes. Modern ERP platforms such as NetSuite can embed approval routing, audit trails, role-based security, and segregation of duties directly into day-to-day operations.
This result is more than improved compliance. Finance spends less time proving what happened and more time helping the business move forward.
3. Accounts payable and procurement: Preventing administrative bottlenecks
Processing a few invoices a week doesn’t require sophisticated tools. Processing hundreds of invoices across CROs, CMOs, consultants, and software vendors is a very different story.
A Series A biotech may begin with a relatively small vendor base consisting of a few laboratories, consultants, and service providers. Two years later, that same company is coordinating spend across CROs, CMOs, specialty laboratories, software vendors, recruiters, contract manufacturers, and professional service firms.
The only thing increasing faster than the volume of invoices is the complexity of these vendor relationships.
Approval paths become less clear. Vendor management becomes more difficult. Finance teams receive a constant stream of questions about payment status, purchasing approvals, and spending visibility.
The warning signs:
- Invoice approval delays
- Vendor onboarding bottlenecks
- Growing payment backlogs
- Limited visibility into committed spend
- Excessive manual follow-up by finance personnel
Many highly skilled finance professionals spend hours each week simply determining where an invoice sits in the approval process. That is rarely the best use of their expertise. The downstream effects extend far beyond finance. Scientists become frustrated when supplies await approval instead of arriving on schedule. Clinical operations teams struggle to understand purchasing status. Leadership loses visibility into future spending commitments.
This is where workflow automation becomes essential. Whether through native ERP functionality or integrated AP automation solutions, high-growth companies increasingly automate invoice intake, approvals, procurement workflows, and vendor management.
As your business continues to grow, AP automation allows you to manage spend and controls with agents and automation instead of higher headcount.
4. Forecasting and planning: Improving decision-making in a more complex business
Forecasting becomes increasingly difficult as organizations move through successive growth stages.
Early-stage planning often centers on cash runway and operating expenses. Over time, that becomes only part of the equation. Finance is no longer planning around payroll and burn rate alone. Clinical programs multiply. Manufacturing expands. Commercial planning enters the conversation.
As your planning requirements grow, relying on spreadsheets and gut instincts is a recipe for misallocation of scarce resources.
Planning in this environment requires tying together operational reality, financial data and strategic priorities. That becomes difficult when actuals, budgets and forecasts all exist in different places. Many finance teams continue relying on spreadsheet-based planning models even as the business becomes substantially more complex. Over time, those spreadsheets expand, require increasing manual maintenance and often depend on a small number of people who fully understand how they work.
The warning signs:
- Forecast updates take too long
- Department budgets drift from reality
- Scenario planning becomes cumbersome
- Leadership debates assumptions rather than outcomes
- Finance spends more time gathering information than analyzing trends
Growing biotech companies reach a point where their planning models become more sophisticated than the systems supporting them. Actuals live in one place. Budgets live somewhere else. Forecasts require extensive manual validation before planning discussions can even begin.
Bringing financial and operational information together within a platform such as NetSuite does not eliminate uncertainty, but it can make scenario planning more effective. What once required a third-party tool can now be addressed more easily on platform with NetSuite Planning and Budgeting. Finance teams spend less time rebuilding spreadsheets and more time evaluating the impact of clinical milestones, hiring plans, manufacturing investments, and funding decisions.
That shift becomes increasingly important as organizations navigate uncertain capital markets and greater pressure to make informed decisions quickly.
5. The Finance team itself: The most expensive breakdown
The most expensive breakdown is rarely a system. It is the finance team itself.
Finance professionals are problem solvers. When processes stop scaling, they rarely stop the business. Instead, your team works around the issue. They build another spreadsheet, manually reconcile another report, or spend another evening tracking approvals and preparing board materials.
Over time, those workarounds become the process.
One of the clearest indicators that an organization has outgrown part of its finance infrastructure is when highly skilled finance professionals spend most of their time moving information rather than interpreting it. Controllers become report builders. Analysts become spreadsheet administrators. Finance managers become approval coordinators.
The warning signs:
- Reconciling data across systems
- Updating spreadsheets
- Tracking approvals
- Answering routine reporting requests
- Compiling information for management meetings
Leadership often mistakes this challenge for a staffing issue rather than a process issue. As complexity increases, leadership hires additional finance personnel. However, those new employees inherit the same manual processes that created the problem in the first place.
The strongest finance organizations are not necessarily those with the largest teams. They are the organizations that enable finance professionals to focus on analysis, planning, controls, and business partnership rather than administrative tasks. They also collaborate with IT and increasingly leverage AI-powered tools and agents to free up time for higher-value decision-making.
A simple exercise for finance leaders
If you’re a finance leader, set aside time with the people closest to your finance operation and review the five areas discussed in this article:
- Financial reporting
- Internal controls
- Accounts payable and procurement
- Forecasting and planning
- Finance team capacity
For each area, ask a simple question:
Would this process still work effectively if our company doubled in size over the next 24 months?
The answer is often more revealing than a dashboard full of metrics.
Organizations can usually feel the pressure building months before it becomes a serious problem. Close cycles lengthen. Reporting requires more manual effort. Key processes become dependent on a handful of employees. Strong finance professionals spend more time collecting information than analyzing it.
Viewed individually, these issues can feel manageable. Viewed together, they often indicate that the business has outgrown part of its finance infrastructure.
Organizations that address these challenges early position themselves to support future fundraising, commercialization, acquisitions, and international expansion. Organizations that wait often find themselves addressing the same issues under tighter timelines and greater scrutiny from investors, auditors, and boards.
The pattern remains remarkably consistent across life sciences organizations of all sizes. Finance leaders rarely look back and wish they had waited longer to improve reporting, strengthen controls or modernize planning processes. More often, they wish they had started sooner.
If you’re questioning whether your reporting processes, controls, planning capabilities, or systems can support the company’s next chapter, reach out to RSM. We can help your team build your finance strategy and implement the systems and processes to handle growing complexity.
By the time finance becomes an obvious bottleneck, the business is already paying the price. The better approach is to identify the cracks early, while there is still time to address them on your terms rather than under pressure from investors, auditors or a major business milestone.
