Field notes
Common gaps in fintech financial statements
Auditors rarely begin with exotic crypto footnotes. They begin with whether your merchant settlement cash, customer float, and fee income tell one coherent story across the trial balance, processor portals, and bank statements. Early fintechs often fail that coherence test.
Settlement timing without a bridge
When payout files land T+2 but revenue is booked on authorization, someone must own the bridge schedule. Many teams keep the logic in a founder’s head. Under audit, that becomes a completeness risk: transactions exist in the processor that never appear in the period’s revenue—or the reverse.
A durable fix is boring: a weekly reconciliation with named owners, thresholds for investigating breaks, and screenshots or exports retained with the period’s binder index.
Reserve memos that stop at the journal entry
Chargeback and credit-loss reserves show up as a credit to the balance sheet and a debit to expense. The gap is the memo: what portfolio slice, what rate, what lookback, what management override. Without that, valuation assertions lean on optimism.
Related parties treated as awkward silence
Founder loans, shared services with a sibling entity, or below-market office arrangements are common in Korea-based startups with group structures. Omitting them invites later restatement pressure. Listing them early—even when amounts are small—signals control over the narrative.
What to do this month
Pick one product flow and draw it from customer action to cash. Annotate every system touch. Then ask which assertion each schedule supports. If you cannot answer, that schedule is decoration, not evidence. Softwareinfrastructure’s Foundations course drills this habit with fintech-shaped examples.