How to build a digital finance function

Aug 01, 2018
Building a digital-first finance function from scratch is a daunting, but exciting and eminently doable challenge.

Joining a start-up can be a daunting experience, and joining as the first accountant responsible for setting up the finance function only adds to the pressure. In this article, I will share my experience of setting up a digital finance function, with the aim of helping future start-up accountants.

I joined UrbanVolt at the beginning of 2016 and there was no Dummies’ Guide to Setting Up a Finance Function that I could refer to. However, my training and experience as a Chartered Accountant had prepared me for the mammoth task.

What are you aiming for?

Living in an age of digital advances, I realised that this presented an opportunity to find new ways of working. To that end, I established UrbanVolt’s finance function on two main principles:

Paperless: UrbanVolt’s aim is to reduce businesses energy consumption and reduce the effects of climate change. As such, I wanted to contribute to this environmentally-friendly ethos by having a paperless finance function; and
Built for scale: the founders inspired me with their ambitious vision and I realised that this required financial processes built for scale.

However, for a truly paperless finance function that is built for scale, I had to embrace cloud technology.

G Suite

With this in mind, I convinced the UrbanVolt founders that G Suite should be the primary office application for all employees. I had spent the year prior to joining UrbanVolt working at Google and became familiar with the application. I was surprised that G Suite had similar functionality to Microsoft Office, but being on the cloud allowed Google to enhance the functionality by introducing collaborative tools. This enabled several users to work on the same document, at the same time, from anywhere in the world.

G Suite significantly increased UrbanVolt’s productivity. The team can work on documents together in real-time, negating the need for multiple document versions and enabling them to meet deadlines for key client deliverables.

Cloud accounting

The next step to setting up a digital-age finance function was to find a cloud accounting package built for scale. After extensive research and trials, I finally settled on Xero. I liked the user-friendly interface, automation capabilities and the reporting functionality.
I was impressed by Xero’s open API, which enabled the development of a third-party add-on marketplace. If the required functionality didn’t exist within Xero, there was an add-on that would provide that functionality. This turned out to be very important for scaling the business.

It should also be noted, that all the underlying transactional data is stored within Xero in the cloud. Having all the data in one place in the cloud makes it easier for compliance, reporting and ultimately, remaining paperless.

E-signatures

As part of my paperless initiative, I introduced e-signature for all UrbanVolt clients. At the outset, the common belief was that clients preferred a wet ink signature on a physical document. This assumption could not have been further from the truth.
From a governance perspective, one of the key benefits of an e-signed document is that you receive an audit report providing the following details:

  • Who: records the person(s) who signed the document (including their email address, title etc.);
  • What: the document is given a unique reference;
  • Where: the IP address of the device used to sign the document is logged; and
  • When: the exact date and time the document was signed is also recorded.
The addition of the audit report makes it impossible for an e-signature to be forged.

Cybersecurity

Running your business in the cloud has many benefits. However, cybersecurity was always at the forefront of my mind. I became obsessed with ensuring that UrbanVolt’s data was kept secure.

I had learned at Google that an organisation could have the best IT security systems and policies in place, but your organisation is only as strong as your weakest user. I embarked on a mission to educate the team on IT security and data protection. At a minimum, I ensured that the team was aware of:

  • The importance of password complexity and how to use two-step verification
  • Locking PCs and laptops when away from your device(s); and
  • Mobile device security.
It is important to get this embedded within an organisation at the outset, especially if you want to avoid a GDPR breach which could carry a significant financial penalty and the loss of your clients’ trust. Cybersecurity continues to be an obsession of mine. Having recently set up Dappr, protecting client data and retaining their trust is of paramount importance.

Set the culture

Finally, if you’re one of the first employees, you are in a very privileged position to help set the culture of the organisation for future recruits. So try to keep it positive by embracing work flexibility (which is easier when your business is in the cloud) and focus on outputs rather than inputs.

Did it work?

UrbanVolt now serves over 270 clients across Ireland, the UK and the US. The company has also secured nearly €100 million in various forms of financing over the past two years. All this activity was aided by having a digital finance function – and this is why I set up Dappr, with the mission of helping SMEs achieve similar success with a digital finance function.

Michael J. Walls is the Founder of Dappr and Chartered Accountants Ireland’s 2018
Young Chartered Star.

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