Last month, Xledger hosted a panel at Bristol Technology Festival: “Scaling your ambitious tech company: can your finance system keep up?” With expert guest speakers from the finance sector: Helen Bassett, Jacinta Magee, and Jennifer Sims, the panel discussed a range of challenges that technology firms face when growing their organisation. In this article, we highlight the key themes discussed (growth, investment, finance systems and resistance to change) as well as one Top Tip from each of the speakers.

RAPID GROWTH

Tech companies grow rapidly and as such require strong foundations. Auditors will want lots of information – so it is essential to have a system that can easily pull out relevant information for reporting. In tech firms especially, international expansion can happen overnight with the acquisition of one new client, bringing with it a whole host of new legalities and complications.

Key takeout: prepare for rapid scalability with secure, reliable systems.

 

GETTING INVESTMENT TO GROW YOUR TECH COMPANY

An experienced CFO working with PE backed firms, Jacinta emphasised how important doing your due diligence is when seeking investment: “Most backers want three years of good numbers that they can rely on to see how your business is growing and what the trends are. If you can’t – make sure you can go back and rebuild. They will interrogate every number from three years ago. We had 12 tax advisors grilling us – it can be overwhelming if you don’t understand or trust your numbers.”

She adds that, as well as the essential auditing responsibility, having a robust system is essential to proving the value of your business: “Investors will look for any reason to chip away at the value of your business. If you can justify your numbers, this increases the value.”

This also extends to your forecasting. If your forecasts are overstated, potential investors will be able to see this and interrogate your reasons why; which could lead to a heavily reduced valuation. Jennifer, Consultant at Xledger, concludes that it is much better to be realistic, through detailed insight, so you have a better idea when predicting the future.

Key takeout: have a robust system in place so you can be confident in your numbers. Prepare for investor interrogation, and get the most value for your business.

 

ENGAGING YOUR STAKEHOLDERS

When it comes to changing finance systems, there can be reluctance internally. To minimise this, Jennifer suggests engaging employees during the initial design stage of a software. This is so the software company truly understands your pain points, and it also provides the core team with confidence in the system from the very beginning. You could even create “change champions” within the organisation, allowing the team to feel ownership and valued.

Jacinta advises you to develop an internal PR campaign which clearly explain the benefits and how it will work. “You need to sell the system to your business.”

Helen (Partner at Tilney Smith & Williamson) adds an interesting point, that there can be a worry that “robots will take our jobs” as tasks are becoming more automated. Her advice is to start with one aspect. It may be expenses, or timesheets, for example. After seeing its success, the response is often “what else can I now automate?” – meaning the demand is now coming from your employees, rather than top down.

Key takeout: involve your team in decision making, and ensure you understand the product and its capabilities.

 

TOP TIPS

  • Jennifer Sims: Consider the long term – design structures that will support limitless scalability. Choose tools which provide document management, full audit record history, and enable you to drill-down into reporting and gain strategic insight.
  • Jacinta Magee: Keep an eye on your numbers – regardless of whether you are looking to invest, have received investment, or just reporting your results; it’s not time to relax. Auditors and investors will want continuous analysis.
  • Helen Bassett: Keep your team in the loop – involve your stakeholders and show them how they will benefit from change.

 

What’s next?

If you’re interested in scaling your ambitious tech company, book a demo or contact Laura Halliday today: email – laura.halliday@xledger.co.uk or call on +44 (0)7879 933 685.

We look forward to working closely with TechSPARK and Bristol Technology Festival going forward into 2022.