Serial founder | ex-CEO | Billion Euro Exit | Advisor | Investor | M&A | Leadership | Technology | SaaS |
** NERD ALERT ** This post is for the nerdy finance bro's and gal's in my LinkedIn network 😂 Why don’t accountants and accounting firms have a productized and standardized approach to serving customers? The obvious answer would be that their business model contradicts this approach, meaning they would spend fewer billable hours serving the customer. I would argue that the change would enable accountants to spend more time with the customer, creating value and looking more “ahead” on numbers and finances instead of backward. As we dig deeper into the operational side of automating back-office systems and processes for our families in Dreamers Collective, it’s clear that there’s a massive win to streamlining and making the interface with the accountants more unified. In real life, we start “bottom-up” (the tech way) with our own designed unified chart of accounts that all our families can use. This chart of accounts comes with a set of guiding accounting principles, sufficient data, and transparency for correct taxation. It's more closely aligned with the way the operational side of the businesses runs and ties 1 to 1 with the asset classes we invest in 💶 Next, now that we’ve further strengthened the data foundation, we’ll be turning our attention to the investment strategies for our families. More to follow on the topic 🚀
Plenty more options for this in the US than Europe I guess. It’s obv different than your situation but I’ve been part of a small fund setup in the US for some years, and ended up with a back-office stack consisting of Allocations (fund admin - filings, entity compliance, and 3rd party reporting), InvestNext (investment and portfolio management platform), and Bench Accounting (bookkeeping, taxes). Bench is accounting on subscription and the only one I’ve tried that *actually 🤌 feels friggin helpful and streamlined with in-house specialists across the board. Not a solution, but those US companies could be a decent blueprint for streamlining back-office functions in fund or investment setups 🤷♀️
From my perspective, standard debet/credit systems are pretty much always geared to hold data related to "production/trading/services" and not investments. The bookkeeping system understands "products in stock" or "hours billed" but not "stocks", "bonds", "withheld dividend tax" or "privately held investments". With a standard bookkeeping system, you will continue to need supporting spreadsheets or custom software to keep track of investments and get both bookkeeping and taxes correct. Still, a uniform chart of accounts is certainly a good step to take. Assuming substantial investments in stocks and bonds, one of the next challenges could be to automate bookkeeping (and reporting) of those assets. That is actually quite doable in many cases.
Here's a finance bros nerd comment for you ✊ A compliant small company finance back-office = point-solutions + subject matter experts. Neither has a vision of the total, especially if you operate in more than one legal jurisdiction. Ask yourself how much you need to in-source and less on improving an interface with service providers who are not interested in eliminating themselves.
At one of my companies, we agreed on a productized model for accounting. Fixed monthly price, all services included. Some months we’d get more value for money, some months we’d have a lot less work for them, but the benefit was that they’d get consistent cash flow, and we’d know our exact cost months/years in advance.
Sounds a lot like portfolio management to me - this is an excellent piece on the matter https://www.value-at-risk.net/
Democratizing payments 🥇 COO & Co-Founder hos Advisoa
1wStefan Rosenlund Interesting points! I actually believe we see more and more accountants and accounting firms going down this route. Atleast, this is our experience through the customers of our SaaS Paypilot (we enable ecom shops to focus on the fun tasks, rather than the ‘boring’ tasks, which means handling errors in transactions and automation of both bookkeeping and bank reconcilliation, among other features). Usually, we work closely with these ecom stores’ CFO/financial controller/accounting firm when setting up their accounting automations, and I feel like the focus on digital and automated processes following some internal bottom-up principals and rules is growing rapidly ‘out there’. You can already see companies like Zignifikant, &Peopl and Scaleup Finance putting a massive effort into these areas - and it goes without saying that it just brings TREMEMDOUS value to all parties involved. However, I agree we still see the opposite direction too, especially from some of the bigger firms, and in my opinion too often, considering the age we live in. But luckily we also have those who builds around a productized and standardized approach when serving their customers - and I believe we will see even more, in the future 🙌🏼