A Guide To Financial Management Software For Fintech Companies

Published on 05 Nov 2022

Financial, Management, Software, Business

Fintech organizations mix the rapid growth, challenger mentality, and heavy workload of start-ups with the dynamic world of technology and software development. Due to the competitive nature of the industries in which they operate, the fast pace of innovation, and the necessity to capture market share swiftly, several Fintech businesses tend to burn capital quickly and need repeated investment rounds.

To develop, Fintechs must thus balance internal and external demands, such as extra financial procedures and regulatory obligations. Back-office complexity and manual procedures may rapidly become onerous due to the rapid development of these firms internationally. This leads to younger Fintechs bearing the same restrictions as their more established counterparts, sometimes even more.

Although Fintech startups offer users simpler and more creative financial transactions, this is often only possible via partnerships with large financial institutions. This adds a level of complexity that must be handled via the automation of financial and accounting procedures.

Without automation and efficiency, corporate performance and long-term expansion will suffer.

Further, to develop worldwide, Fintechs will need to establish regional subsidiaries, which will incur additional expenses and need the hiring of local accountants. Despite seeming to be a straightforward solution, these layers increase business complexity.

Combined with the necessity for daily accounting, statutory, and management reporting, the finance team's workload rapidly increases to satisfy the rigor of investor due diligence. In other words, Fintechs confront increasing obstacles that significantly limit their capacity to innovate and operate with agility.

Establishing New Markets

Global visibility with local compliance is the holy grail for rapidly expanding multinational firms. The value of operating effortlessly in foreign marketplaces is going to rise. Therefore, it is essential for Fintech businesses to effortlessly do business via many subsidiaries, regardless of location, while obtaining data from a centralized location. Implementing accounting software in new subsidiaries should need a few mouse clicks, not constructing new databases and purchasing consolidation tools. Fintechs should invest in technology that facilitates operational and financial consolidations, eliminates manual procedures, and eliminates the need for further software expenditures to boost organizational visibility.

Robust Automation and Controls

Fintech businesses are subject to regulatory compliance, yet often need more resources from bigger financial institutions to guarantee that they run as effectively. To improve audit control and compliance, integrate front-office systems with a comprehensive accounting platform more tightly. This creates a symbiotic connection that allows important users to obtain the appropriate information in real-time and at a granular level. Using manual techniques or semi-automated spreadsheets is a vast improvement for the business and finance departments.

Fintechs need a solution that meets global standards and country-specific criteria, especially those wanting to grow abroad rapidly and cost-effectively. It is crucial to have systems that can be designed to manage the mapping and modifications required for multi-GAAP reporting using different accounting rules and books. This improves the integrity of on-system reporting by enabling a thorough view of the underlying transaction data, irrespective of accounting book or subsidiary.

Lower TCO, Growth Scalability

As a result of their adaptability and outstanding customer service, fintech businesses are redefining what is feasible. Their services are often supplied using a cloud-based paradigm. This is often mirrored in the back office with entry-level goods. These solutions are not, however, scalable. Finance teams often acquire many instances of smaller accounting software to manage multi-entity operations, resulting in manual consolidation procedures and inefficiencies. Even as the number of entities increases, having a platform with a single database result in a cheaper TCO than other solutions, including the advantages of automated updates given by the multi-tenant 'true cloud' model.


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