How smart is your finance function?

Article

Smart finance functions® for smart leaders. Find out what happened yesterday, what's happening today and what's likely to happen tomorrow.

As a start-up founder, you don’t often think about the similarities between large multi-nationals and your fast-growth start-up. But strangely, when it comes to finance, there are. While entrepreneurs care most about product, brand and growth, finance will, or should, be at the heart of most of it. It’s the backbone of the business. And both multi-nationals and fast-growth start-ups share this in common and need support from their finance function. But finance support comes in all shapes and sizes, and its true you get what you pay for.

The genesis of true smart finance functions® comes from large multi-nationals. The best finance functions focus on getting three things right: they seek to be efficient, well-controlled and deliver insight. Or put to it another way, they help the business make the right decisions at the right time.

At flinder, we’ve distilled this down into the flinder Effect (see below). Delivering robust information as quickly as possible that’s aligned to what the decision-makers care about. It’s built on the latest technology, the right processes, talented people at the right levels and leverages clean data.

These aren’t nice to haves. They’re fundamentals if you want a scalable business. You need solid foundations for growth, and for that, you need infrastructure, governance and data-based insight to make timely decisions.

The flinder effect

The four options for finance support

There are four main option buckets when it comes to finance support for start-ups. Of course, there are subtle variations of these – from a finance controller to a CFO, or a cloud accountant to a tax specialist. And each of these options have a place and value in the right environment. For example, if you run a comfortable lifestyle business with modest aspirations, then a simple cloud accountant may meet your needs.

But, if you’re a fast-growth business that wants to impress investors, needs to make informed decisions, needs answers sooner rather than later that include the ‘why’, not just the ‘what’, then you will need much collaborative support from your finance team. And while you will likely have plenty of data, you’re probably short on meaningful insight.

Ambitious founders would be let down by a simple cloud accountant or a traditional outsourced accountant. Both would lack understanding and alignment to your strategy and just wouldn’t be as responsive and collaborative as an ambitious founder needs. After all, a day in the life of a start-up is like a month elsewhere. Fast-growth business leaders need responsive reporting and relevant insight now, not tomorrow.

Smart finance function maturity matrix

The best of all worlds

Cloud accountants don’t work to the same fast pace. They don’t understand the complex business model or the business strategy. They may be great at compliance but that’s a basic expectation. They’re not proactive and they don’t go deep enough. It’s just not part of their modus operandi. But as an early-stage pre seed or seed business grows, this expectation gap is where the friction starts.

And while in-house finance teams obviously understand the business model and are 100% aligned to the business strategy, they tend not to know what leading practice looks like – they lack experience in processes, technology and have no real benchmark of an optimal finance function and leading practice reporting. And hiring an accountant in-house isn’t how you should be growing your headcount.

With an outsourced finance function, you will get wider support and services than with a cloud accountant, but you will still be limited in the relevance of the support. They will be leveraging as much technology as possible to make standard processes as efficient as possible but with little alignment or focus on your business needs. Understanding your strategy isn’t part of their remit.

A smart finance function® brings the best of all these together. You get the technical expertise of a regulated accounting firm, the depth of understanding of your business model and strategy, reporting aligned to what you need, proactivity and proper C-Suite support. But you also get data expertise – both to better structure how your cloud applications talk to each other and collect data but also to use this to report business-wide insight in real-time. Not just finance data, but rich operational data too. The raison d’être of a smart finance function® is to help make better decisions. It will help you find out what happened yesterday, what's happening today and what's likely to happen tomorrow. And to top it all, a smart finance function® works on an elastic finance team model, meaning you get the roles you need, for only the time you need, which will save costs over hiring.

 

Smart finance function

In-house finance

Outsourced accounting

Cloud Accountant

CFO Board representation

 

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Forward-looking and proactive

   

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Aligned to strategy and understands business model

   

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Insight and business-wide reporting

   

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Cost effective

 

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Statutory compliance reporting

 

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Quick to hire/implement

 

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Elastic finance team

 

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Full stack accounting tech proficient

 

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Leading practice benchmarking

 

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*additional resource levels and cost.

Tomorrow's finance function, today

No more delays. No more siloed reporting. No more half-informed decision making. It’s time to reimagine the playing field, to bring in a new generation of accounting and finance that's aligned to your strategy. 

Operational and strategic finance should be all the things you are. Technology-driven. Data-led. Agile. Commercial. Strategic. Insightful.

A smart finance function® should help fast-growth businesses to improve performance, scale business operations and prepare for investment. And use technology to simplify complex data and deliver relevant insight.

What flinder’s smart finance function® can give you:

Get on the same page – Data and information aren't insightful unless aligned with your strategy. An embedded smart finance function® understands your business, strategy and gives you the insight you need, when you need it. 

Get the most out of the best tech - Make tech work the way it should. We connect all the pieces together, get the most out of your data and make it relevant. We build it to run an efficient finance function.

Set up for scale - You won't be able to scale your business if your finance function can't keep up. We'll benchmark you against our 100-point maturity tool and transform your processes, technology and data, so you're always ready for scale.

Reporting on steroids - Know what's happened and why in real-time. Our proprietary reporting tech delivers real-time sector-specific data analytics while our portfolio CFOs bring it to life with what it means for your business.

Impress investors - Whether you're fundraising now or exiting in the future, you need your business to stand up to scrutiny. Our fractional CFOs will dig in deep to understand your commercial drivers. They'll sit on your Board and support and challenge the business from a finance perspective.

 

Conclusion

If you want a scalable business, you need solid foundations for growth, and for that, you need infrastructure, governance and data-based insight to make timely decisions. Overall, a smart finance function® rolls your external accountant, in-house finance team and data consultants into one solution to build and run your finance function, improve reporting and make you look great in front of your investors.

When looking at how your finance is run – how smart do you think it is really?

Find out what happened yesterday, what's happening today and what's likely to happen tomorrow.

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