Is a single business management system really practical for early fintechs?

Cloud-based accounting software can prove transformative for startups, so long as they pick the right kind.

Sign Up

Get the New Statesman's Morning Call email.

According to a recent fintech M&A report the fintech market saw $120bn worth of transactions in the first half of 2019 and in the second quarter $10.9bn of funds were raised compared to $12.7bn in the whole of 2016. Align that with an estimated 5,000 to 12,000 startups in the last 10 years and it is fair to say that this sector is evolving and growing at an unparalleled rate.

Most fintech startups are looking towards IPO, to be acquired by a traditional financial institution or merge with another fintech, but in all cases these organisations need a mainstream, secure financial management system; one that supports rigorous financial accounting controls, compliance and transparent real time financial reporting, potentially across multiple currency and tax jurisdictions.

The key questions for CFOs are when and what?

The competitive edge of most, if not all, fintechs is predicated on new, innovative and disruptive technologies, and their focus – quite understandably – has not been on standardising back office methods, processes and systems. For early funding round companies, the adoption of an all-encompassing, cloud-based business management system like NetSuite OneWorld may seem like an overwhelming and unnecessary task.

On the contrary, having been CFO at a number financial services and fintech businesses, Jonathan Smith believes that “the main focus for CFOs in the startup and scaleup community should be to gear up before growth, so that a highly scalable system – for instance, NetSuite OneWorld – is embedded ahead of time”.

When considering the ‘what to invest in?’ question, there are a number of factors to consider including:

  • Globally recognised standards in a compliant solution i.e. GAAP, IFRS, SOX;
  • Multi-jurisdiction tax localisation with consolidated financial statements;
  • Deep reporting capability, including the flexibility to slice and dice financial information;
  • Increased financial control through workflow approval levels, providing full audit trails;
  • The capacity to support changing business models within a growing business;
  • Audit trails on all supplier and client interactions;
  • A completely scalable, cloud-based solution that doesn’t hinder rapid growth.

Furthermore, there is a misconception that choosing a cutting-edge Enterprise Resource Management (ERP) solution and interface platform as a service means all or nothing. OpenPayd’s story illustrates the reality.

OpenPayd selects NetSuite to achieve financial automation: a case study

To achieve their goal of helping businesses leverage the best payment and banking services, OpenPayd turned to BrightBridge Solutions to shape and create a comprehensive financial accounting solution. The ambition of David Bull, OpenPayd’s CFO, is to “absolutely minimise direct data entry into NetSuite”; BrightBridge is implementing the powerful cloud solution with additional specialist products to facilitate automation of much of OpenPayd’s finance function.

  • Oracle NetSuite OneWorld – the leading multi-company, multi-currency and regulatory financial platform in the cloud – employed as the robust foundation.
  • Additional group, financial structures and platform interfaces effortlessly added as the group and product offerings evolved. 
  • Kofax ReadSoft Online for NetSuite enables invoice automation – OpenPayd needs fewer processing resources and benefits from more effective and accurate financial management.
  • Infinet Cloud Payroll facilitates payroll management entirely within NetSuite – OpenPayd pays employees, administers leave and manages expense accounts and can submit compliant information directly to HMRC.
  • Jitterbit’s API integration platform democratises data– OpenPayd’s goal is to seamlessly unify its internal, proprietary transaction processing platform and the treasury management software it uses to control cash flow. BrightBridge is currently in an improvement phase and utilising Jitterbit to achieve this aims and for intercompany data migration.

OpenPayd has grown rapidly and transformed from a single NetSuite company to having 37 global subsidiaries in just four years and automation of its AP and payroll processes. The result is a small but highly efficient finance function and a platform for future growth.

BrightBridge enables growth for fintech companies

Solution providers such as BrightBridge with financial services experience and access to market-leading software partners will get under the skin of a company to implement an integrated financial management solution on the extensible NetSuite Cloud Platform. Vitally, the ERP implementation firm also provide an infrastructure whereby fintechs can integrate their unique trading solutions or systems of innovation with NetSuite, the system of record.

We work with some rising fintech stars, including Koine, Onfido, Greensill Capital and OpenPayd, and BrightBridge is proud to be principal co-sponsors of the New Statesman Fintech Summit 2019, alongside our partner Jitterbit. It takes place on the 5 and 6 November at Hilton London Bankside. Meet us there or visit www.brightbridgesolutions.com to arrange an appointment.   

Ian Robertson is Sales and Marketing Director at Oracle NetSuite Solutions Provider BrightBridge Solutions.