How to run the Finances of a small business or start-up?

Finance can be an intimidating topic. Small businesses and start-ups think that running their Finances is complicated and hard. They think they need to hire a professional, they are not sure about what to put in each account or the tech-stack and software they need to be using. Many times they find themselves dubious on particular tax treatments, monthly and year-end accounts. Moreover, professionals in the space mystify their work using an approach where there is a one-way conversation – them teaching the client, making themselves indispensable and not working with their clients on an equal basis. Good news, the new technology and financial apps ecosystem is bringing this to a halt as running the Finances of a small business or start-up up to a particular size becomes manageable with the right guidance and tech-stack. Cloud Accounting, automating financial operations and taking advantage of different solutions for each part of your Finances can convert the process from a chore into a breeze. In this article, we are going to look at some of the latest Tech that can help you turn your Financial Operations into something easy you do rather than something hard that you don’t look forward to.

Starting off with the basics such as office and computer equipment, you wouldn’t really need anything but a laptop, phone and a co-working space. Gone are the days where you have to sign long-term leases for expensive office spaces as the new wave of co-working space offers flexibility, great facilities, easily scalable, a network and a community of like-minded people. Places like WeWork and CoWorker offer you all the facilities you need where even physical products businesses usually outsourcing their production or using third parties are completely separate from their production operations using these co-working spaces. Moreover, the Microsoft or Google Office suit combined with communication and project management solutions like Asana and Slack can streamline your processes and boost the level of teamwork within your company. The Microsoft and Google office solutions offer cloud storage so you wouldn’t have to worry about the security and accessibility of your company’s data.

When it comes down to you Finances optimum efficiency, automation of daily operations and support for commercial insights should be paramount. This is brought about by an eco-system of financial software solutions. Starting off with your bank and where you keep your cash, the days of traditional banking are numbered and digital contenders are already overtaking the retail space. In terms of commercial banking, there are some solutions that are currently on the market which are far from perfect though are inching in the right direction by the day – Tide, Coconut and Starling Bank for Business. Coconut even goes as far as preparing your accounts and tax embedded in your digital banking. Soon enough you won’t have to worry about your Tax and Year End accounts as these will be automatically generated and prepared by your Accounting system and sent to HMRC or the relevant authority in your country via a secure API access point.

The accounting system that you are going to use for recording your business’s transaction is of crucial importance as there is a lot of products out there that don’t really provide optimal results for your business. From my personal experience depending on the size of your business Xero is the best solution out there. Beautiful design, great user experience and interface paired with secure cloud storage and fast accessibility for your financials this solution should be at the centre of your financial information. Moreover, with a comprehensive Xero Marketplace of external applications that integrate seamlessly, it can really bring massive value. The marketplace’s applications can assist your business in every single domain of its operations. Let’s look at some examples:

  • Accounts receivable – starting with your sales and the money coming in the business there are a number of integrated solutions both for POS and Online payments side. Notable solutions are iZettle on the POS and Stripe for online payments.
  • Accounts Payable
    • Roger – streamlining your invoice payment process with the help of OCR (optical character recognition) reading and extraction of all the details of the invoice automatically (invoice no., date, supplier, VAT, coding, etc.); it then learns as you continue to use it paired with approval flow, payment and automatic reconciliation.
    • Pleo – Pleo is a new service to the UK market which has recently received a significant Investment Round and it is expanding rapidly. It offers pre-paid cards and an app that allows your employees to track and record every single personal expense. You can top-up these cards from your bank account and at the end of the month upload, all the transaction records to your Accounting system via an API. Insight is immediately available and administration time and costs are down to a minimum.
  • Payroll and HR – a new solution coming to the UK that I am particularly excited about is Pento. Pento is a solution that combines all the HR and staff payment processes into one. From onboarding, your staff on the system to getting everyone paid automatically through bank transfers and social security contributions submitted to the HMRC.
  • Financial Reporting – when it comes down to Month End and Yearly reporting Excel still is the king of the game though with the addition of Data Dear which is an Excel Add-on application that pulls your financial data from your Xero software. You can pull down all your financials with the click of a button. This can truly be a gamechanger to the insight generation from your data. Paired with a tool like Fathom that can produce visual insight for the non-financial users of information. You can produce truly outstanding reports and board packs for your investors.

There are many other areas of your business that can be ‘upgraded‘ with the right software in places such as CRM, Inventory, Debtor Tracking, and e-commerce. While being simply an overview of a particular tech stack and approach to your company’s Finances. This article gives you an idea of how to run an efficient, tech-driven Finances of your business in an environment where cost-savings and efficiency are crucial for development and getting ahead of the competition. You can pick and mix different type of additional software from the Xero eco-system or even look into using Voice Assistants and Python open-source programming for automating process and tasks within your business. Bottom line, staying tech-conscious and constantly being willing to change and improve would define your development and performance.

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