23 March 2020

The data that finance teams are missing out on

Written By FinTech Alliance

The data that finance teams are missing out on

Many of the FinTech Alliance community help other companies make the most out of their data. Darren Upson, VP for Small Business at Soldo, discusses why the right data is so important within a business’ own finance team, especially for FinTechs seeking investment.


Data is a hugely valuable commodity in business – it’s the reason some companies buy others (consider Google’s acquisition of FitBit, for example), and it can be the driving force for growth. Every business, no matter the size, generates valuable data – yet many fail to capture it effectively.

The right financial data can be key to increasing profitability, streamlining business processes and remaining competitive. However, challenges can arise while trying to capture it, particularly around expenditure. As companies grow, it becomes increasingly challenging for the finance team to keep track of what employees are spending, and when. With more staff and more departments comes greater costs and variables. And as the gap between what is being spent and what the finance team knows about widens further, it becomes more damaging.

On a practical level, data loss usually happens because of legacy systems which remain in place for too long. These systems create siloes of information, accessible only through a specific app or web portal, effectively hiding data that could be used to make better informed decisions. The value that this kind of data could bring to a business is often overlooked, when it should play a crucial part in a company’s growth strategy. Here’s why:


Poor cash flow can kill your business

Poor cash flow is a common cause of startup failure. Growing business owners tend to be well aware of the money that’s coming in, but the same often can’t be said for what’s going out. This is unsurprising considering the countless different expenditures that companies are required to track, including rent, expenses, payroll, and taxes for a start. However, companies which do invest in tracking their costs benefit from more accurate forecasts, more informed business decisions, and more investor attention.

Real-time insight into business expenditure has been democratised and is available for all businesses to access. Now that technology enables companies to manage to spend from their phones, there’s no excuse to avoid it.


Spending is crucial for growth

Research by Soldo found that nearly a third (29%) of growing businesses in the UK and Ireland struggle when choosing what business priorities to spend on. Almost a fifth (18%) said that they didn’t have enough financial insight to make effective spending decisions.

Startup owners don’t need to be scared of spending money on their business, but they do need to make sure that they’re spending it on the right things. A full outlook on company finances is the key to making good spending decisions and driving the business forward.


Spend data is crucial when securing investment

Securing investment is part of the plan for a lot of FinTechs because it allows them to develop their product or service, make new hires, and grow rapidly. To impress investors, though, owners need to show that they know company numbers (both income and expenditure) and can support their financial forecasts. In the modern day, that means investing in tools which allow them to access financial data at a moment’s notice. According to Soldo research, more than a third (35%) said that not knowing their numbers was a significant challenge when securing investment.

Having sufficient financial data isn’t just a tick-box, admin exercise – it is crucial to a startup’s survival and growth. Fortunately, it has never been easier for companies to get tools that allow them to keep track of such data. So, this is your chance: invest in the right technology and your small business will find it significantly easier to grow.



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