Carlo Gualandri, Founder & CEO of Soldo, explores how solving problems faced in finance departments can make room for more creative thinking
There are huge opportunities lying dormant in the background of financial departments the world over. The fintech sector is bringing this to light, and encouraging businesses to reconsider the potential of their finance and accounting teams.
With the exponential technology made available over the last few years, now is the time for big corporates and SMEs alike to start utilising technological innovations in fintech. Freeing, finance and accounting teams from the need to chase down receipts and reconcile spending, but to strategically implement money saving processes and changes that go beyond the pre-internet 4.0 accounting job description.
There is currently a lot of confidence in the fintech sector, especially here in the UK,. However, many of these well-known success stories have so far revolved around consumer payment services, leaving a tremendous opportunity for B2B payments – a market worth approximately $250.0bn today.
Many aspects of the financial sector are still yet to catch up with the digitalisation movement – with until recently banking legislations confined by legacy systems that were not in line with technological developments. Consequently, banks have managed to keep themselves central to the financial lives of businesses. But with alternatives emerging at a rapid rate, the fintech sector is taking the reins when it comes to B2B financial services.
Soldo, London based Fintech which is tackling the problem of spend management for businesses, commissioned a survey to uncover the leading points for cash flow improvement amongst UK businesses at the beginning of 2018. The independent survey, analysed in the Spend Management Whitepaper, reached a massive 4,000 UK businesses and identified problems in company spending.
The data shows much room for improvement into how cash flow management within businesses impacts on time and cost management. The brunt of this bares heavy on financial and accounting teams who end up prioritising unnecessary tasks such as chasing receipts and reconciling expenses.
The survey most prominently revealed up to £102.6bn of company spending is left unreconciled by a fifth of UK businesses each year, with more than a third of financial decision makers undertaking unnecessary financial detective work at the end of each month to identify company spend. From the survey, half of UK small business financial decision makers cite a need for improved internal cash flow processes.
Moreover, employee expense management is a hidden headache for both finance teams and employees alike. Poorly implemented systems have resulted in animosity from employees having to pay business expenses out of their own pocket, and similarly created more work for finance teams, due to admin heavy reimbursing and reporting expenses.
However, smart businesses are prepared to adapt and utilise new technologies as they become available. With the opportunity to automate a variety of tasks more efficiently, cheaply and reliably, there is more time for finance teams to spend time on value added activities.
The biggest challenges to businesses adopting fintech are inertia and the perceived cost of implementation. are are often so busy with day-to-day tasks that implementing change is often considered a pain. Moreover, businesses are required to prove return-on-investment advantages that take maturity and reputation to articulate convincingly. However, businesses willing to take the leap and exploit fintechs experience significant advantages with regard to cost and time savings, providing them with an improved bottom line and competitive advantage.
It may seem a little leftfield, but try looking beyond your marketing and sales team to breathe fresh new ideas into the business – your finance team can be a great source of innovation. Finance departments commonly have a far-reaching view into the inner-workings of any business. The old myth that finance departments smother new ideas is quickly being debunked, with their analytical skills finding innovative ways to reduce cash inefficiencies and make room for growth. Taking advantage of time and resource saving fintech services will free up your finance teams’ time to dive into creative ways of saving your business money.
With open banking and PSD2 changing the rules of the game, providing fintechs with the freedom to disrupt traditional businesses, ow is the opportune time for businesses to take advantage of fintech providers whose presence is ruffling the feathers of antiquated traditional banking systems. Fintech offers opportunities for companies to utilise new technology and shred hours that are currently reserved for managing spend, a concept business financial services are yet to master. This opens huge potential to streamline the systems that presently lead to significant levels of wasted money.
The key is to be open and adaptable. Let 2018 be the year your business finances were digitised.