A Look Inside DelightRoom's Unique Finance Culture
Motivating members through finance reviews
Hi everyone. I'm Roy, Head of Finance at DelightRoom.
I worked at Samjong KPMG for about three years doing financial audits and tax consulting for large conglomerates and foreign companies, but I resigned because I had a strong desire to work more closely with clients. After resigning, I worked as a CFO for various startups for five years. One thing I've noticed while working with startups is that while many grow rapidly through massive fundraising, their financial management often fails to keep pace with that growth, resulting in many startups failing at financial management.
When I first met DelightRoom in 2017, they looked like any other typical startup struggling with financial management. But now, five years later, they've become a company that manages its finances better than almost any other startup out there.👏🏻👏🏻👏🏻
One of DelightRoom's core cultures is sharing and communication.
Our finance reviews originally started with a simple question: "How can we effectively manage the company's financial statements and transparently share them with our members?"
First, to establish our broad direction, we set the following two goals:
Share the company's financial growth company-wide to light a fire in our members' hearts
Ensure members are well aware of the company's financial health
To achieve these goals, we took the following three factors into consideration.
체계적 관리
The need for accurate financial statements to be generated on a timely, quarterly basis.
External verification
Getting our internally prepared financial statements verified by an objective third party.
Transparent sharing
Figuring out when and how to share this information with our members.
Let's take a look at how we tackled these three issues one by one.
To produce accurate financial statements, the company must first fully recognize their importance. Only then will the CEO pay close attention to them, which in turn smooths out cooperation from each department to generate accurate numbers. If the CEO isn't interested in finance, you can never achieve satisfactory results. I continuously discussed the importance of financial statements with our CEO, Jay, and fortunately, he completely agreed and gave his full support.
To improve the accuracy of our books, we switched from an annual closing system to a monthly one. For monthly financial statements to be produced, we agreed on the necessary data and deadlines with each department and created a manual. Then, I report the final monthly financial statements directly to the CEO. Jay reviews everything in detail, from the overall statements down to the general ledger, and I incorporate his revisions.
Just adding this step of reporting directly to the CEO gives me a fair amount of pressure (?), meaning I have no choice but to pay extreme attention to preparing the financial statements.
Since the financial statement preparation process is highly time-consuming and prone to human error, we undergo an audit by an independent third-party accounting firm. Even though DelightRoom is not legally required to undergo statutory audits, we voluntarily undergo an audit every year. Responding to an audit requires a lot of time and financial expenditure, but the company considers this an investment rather than a cost.
We put a lot of thought into how we should share this information with our members. This included thinking about whether to create and hand out a report (delivery format), whether to only share it with team leads (target audience), and to what extent we should share the information (level of detail).
The company's direction was to transparently open up information to all employees, and as a result, we ended up sharing financial information with all members regardless of rank. We also determined that it was best to inform members up to a level that wouldn't trigger information security issues, and we thought it would be more effective to present it in the form of a town hall meeting rather than creating and distributing a written report.
Our first finance review had some trial and error, but by continuously holding them on a quarterly basis, we were able to make up for our shortcomings and improve the process.
The benefits that both the members and the company gained from these quarterly finance reviews exceeded our expectations.
Members gained a deeper understanding of the company and could objectively confirm that the company was growing through quantitative metrics. This boosts members' immersion in their work and helps them feel a sense of pride in the company they belong to. Conversely, when the company's situation isn't great, it can instill a sense of urgency in our members, helping to form a consensus on how we can tackle issues together.
With that, we've explored finance reviews, a special working method unique to DelightRoom's finance group. Finance reviews have quietly permeated into being one of DelightRoom's core cultures, continuously having a positive impact on our members.
Personally, I think this might be the most important and high-leverage work I've ever done. If anyone out there wants to introduce finance reviews to their own company, I hope our case study can be of at least a little bit of help. 🙂
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