What should a new business consider when choosing a finance system?

Here, Darren Cran discusses why a flexible and scalable finance system is so beneficial to have as you develop your venture.

Got big plans for your small business? If you are hoping to grow your start-up, you’ll need the right finance system to support your company as it grows – one that can expand at the same pace as you. At the birth of your business, the choices you make are important; in terms of accounting and finance, a flexible and scalable system will adapt to your needs as you develop your venture.

Your wish list: essential features for your finance system

Start-up businesses can grow and change rapidly, so your current requirements may not always match up with what you’ll need from your accounting software in one or two years’ time. For enterprises with ambition, finance systems must have:

  • Scalability. You’re looking for a system that can grow with the business. If you’re planning on expanding overseas in the future, you’ll need accounting software that can operate across multiple locations or undertake multi-currency transactions. If you want to open subsidiary groups, your accounting software will need to be able to handle this.
  • Sophistication. The accounting operations you require at the start might be quite simple, but if things work out according to plan, it won’t stay that way. Looking ahead to the future, any finance systems you consider will need the ability to undertake more complex accounting or reporting. By starting with an online accounting solution with basic functionality only, or using on premise software such as Sage, you could quickly run into problems when your business starts to develop and grow.

It’s so much easier to stick with one system, rather than needing to switch when your requirements change. If these changes are planned from the beginning, it makes sense to opt for finance management software that can support the growth and development of your business and also support the wider employee with things like order approval and expense capture via mobile.

The nice-to-haves: features that will make life easier for staff

If scalability and sophistication are the vital characteristics that you’ll need from a start-up finance system, these are some of the additional extras that will help your business to run more smoothly:

  • Real-time reporting. Get the latest figures and stats, wherever you are. You can do this by choosing a ‘live’ system that allows you to log in and see up-to-the-minute information.
  • Automated month end. Getting innovative technology to do the processing and reconciliation work means that staff can focus their time on using information and growth strategies and initiatives.
  • Reporting. Using an advanced reporting module means the ability to report in 360 degrees and get a group, divisional, department or project view by P&L, balance and cash flow.
  • Integration with other software. Think about how smoothly things could run, if (for example) your accounting system could automatically ‘talk’ to your CRM or your booking software. Cloud-based accounting software has the advantage of being able to integrate easily with other solutions in this way.
  • Flexibility. Your process and control environment may change as the business grows or your investors/stakeholders may request enhanced reporting and processes. It’s good to have the flexibility to simply add new modules like approval workflow, fixed assets register, advanced journaling or project ledger, by simply pushing a button with no need for a future transformation project, as you have selected a platform the business can comfortably expand with.

All of these will make a real difference to the way you run your business. They are also all features that you can only find in a cloud-based Finance Management System (FMS, previously called an accounting system).

Real-life examples

We have worked with a large number of start-up success stories: companies that started off small and rapidly grew. Here are a few examples:

The coffee franchise

Insomnia Coffee Company is a franchise that grew quickly and is still expanding. For Insomnia, a cloud system to replace Sage 200 was an obvious choice, due to the low entry cost and added functionality. This allowed them to produce individual store reports for each franchise, as well as management reports, meaning that they can drill down easily to find the data they require. They also benefited from integrating our system with their EPOS system which takes a big processing and reconciliation burden away.

The social intelligence agency

Social insights and news agency Storyful was founded in Ireland and now has offices in Dublin, Sydney, New York City, Hong Kong and London. The company, which gathers content and insights for media and brand partners, was the first agency of its kind. Acquired by NewsCorp in 2013, it has grown to be a global leader in social intelligence. The business has been supported along the way, through simple consolidation and advanced financial reporting.

The travel retailing platform

Openjaw needed a solution to support its finance function. A start-up that ballooned into an international group, OpenJaw recently announced that they will be doubling their workforce to 450 staff. The accounting system we provided them with makes it easy for OpenJaw managers to log in and access key information for each separate subsidiary.

Start-up businesses need speed and agility on their side when they are growing rapidly – and your finance system should support and not hinder growth. The scalability and flexibility of finance systems can make a real difference to your success.

Darren Cran is managing director of AccountsIQ.

Further reading on choosing a finance system

Ben Lobel

Delphine Hintz

Ben Lobel was the editor of SmallBusiness.co.uk from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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