What growing companies need from a finance system image

What growing companies need from a finance system

The rapid growth that comes with gaining investment is exciting for any business. But this can often pose challenges for the finance team.

Posted byiplicit
onMonday, 27 March 2023

New investors and larger investments naturally bring expectations of fast growth, and many businesses put money into hiring new staff to help their teams keep up. In this rush to invest in capacity, the finance team is often overlooked, because they’ve always got by reasonably well with the entry-level finance products - like Xero or QuickBooks – that the business started out with. 

Such systems suit the business well in the early days of low volumes and light reporting requirements. Unfortunately, it often becomes clear that something more sophisticated is required to cope with the increase in volumes and required outputs that outside investment brings. 

Not only does the day-to-day workload in finance increase as more processes are put in place, but other departments in the business inevitably place more demands on them. Sales and account management teams, for example, start to require insight into billing information, while operational teams need to be able to log time and expenses to projects or see credit control statuses. Financial information increasingly needs to be shared across teams, yet such collaboration is difficult to achieve because of lack of investment in financial systems.

In many businesses, money is spent on tech in other departments – on CRMs or project management tools, for example. But Finance is left to struggle on with the same entry-level systems and myriad of spreadsheets. They often spend hours every week answering internal queries when they should be doing more important tasks.

This growth-stunting lack of data visibility could easily be solved through the data integrations that are a feature of more modern finance systems. Without such features, Finance teams have to deal with an ever-growing mountain of manual work, and this presents some significant challenges and risks.

How to free up the finance team to do their best work

Reduce manual processing: To increase efficiency in the finance team, a first priority should be to reduce manual work and free up time so that staff can work on more valuable projects, spotting trends and revenue growth opportunities for instance. Manual tasks have a huge impact on a finance team’s efficiency, especially when they involve complex procedures like revenue recognition or multi-currency consolidation. This burden only increases over time, as the company continues to grow and volumes of work increase. 

Simplify the complexity of managing multiple entities, myriad currencies and intercompany transactions: Things can get especially challenging when trading across multiple legal entities or across two or more countries, or when customer numbers increase above a certain level. This can mean the volume of manual work spirals rapidly. In turn, human errors inevitably increase, and these take additional work to resolve.
Increase accuracy: Inaccurate data has a negative impact on any business, but it’s a particular issue for growing businesses. They need to produce accurate, up-to-date reports and board packs, while coping with ambitious growth targets and rapidly changing numbers.

If the relevant data is contained in myriad spreadsheets, or if the data has to be pulled from multiple entities in multiple currencies and with various reporting structures, it becomes a challenging task. If they are to keep up with expectations, the finance teams (and the decision makers through the business) need the ability to access accurate, real-time data in a timely manner in a format that is meaningful to them. Investing in better technology can help avoid issues and give investors more confidence in the business.

What features do growing companies need from a finance system?
Growing businesses typically need these capabilities from their finance systems:

  • Accurate, real-time reporting that is easily interrogated and is flexible enough to handle changing reporting requirements as new investors come on board;

  • Advanced process automations across the board to reduce workload and the chance of human error;

  • Powerful spend management functionality to efficiently control cash burn;

  • An open platform that is easily integrated to other key business systems.

Large ERP systems that offer such features are far more expensive than the entry-level systems they replace, and they also take considerable time (months, if not years in some cases) to implement. However, there are systems that serve the mid-market very well, such as iplicit which offers these features as standard at an affordable price tag and can be implemented in weeks.

This short implementation time removes the barriers of both cost and disruption that can deter some businesses from upgrading their finance systems and allows growing companies to invest in the finance tech they need far earlier in their journey. By removing the risks and challenges that slow down their day-to-day activities, they can instead focus on strategic activities that fuel growth without having to invest in additional headcount.

Learn more about iplicit
If you’d like to find out more about iplicit’s award-winning cloud accounting software for medium sized businesses, please get in touch to arrange a demo or email us at Sales@iplicit.com

Alternatively, join our Webinar on 26th April: How to drive business growth from within finance

In this essential webinar, we cover the key tools that will enable you to make fast, informed decisions. Our 30-minute webinar will cover:

  • The challenges high-growth companies face

  • How better Business Intelligence can help you drive growth

  • Tools to free up your finance team by a week every month:

  • Advanced workflows and approvals

  • Automated billing and revenue recognition

  • Intercompany management

  • Multicurrency and multi-entity consolidation

  • Automated month end processes

  • Flexible multi-dimensional reporting

  • API & systems integration - helping you work smarter, not harder

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