When Patrick and I joined Entrepreneur First’s BE6 cohort last year, we quickly encountered a problem: Finance teams of startups and SMBs are buried in spreadsheets, legacy banking portals, and disjointed software solutions. Financial statements are pulled together manually and often delivered late after closing the books by an accountant. Finance professionals lack insights into their finances as they happen to make sound business decisions when they are most needed.
In practice, this leads to startups creating business plans only ahead of new funding rounds to fulfil investor demands but not updating those forecasts with actuals on a regular basis…
What we stand for and how we express it
Design is not the art of making things beautiful; it’s the science of making them invisible.
Invisibility is the utmost efficiency a service can achieve, when it becomes so seamless that users forget it even exists. The problems that originally motivated its creation are not only solved, but avoided.
Think iPhone. After switching from Android to iOS, soon I understood what people meant when they said it just works. It does its job without raising any issues. …
Building your own cash flow statement is a powerful method to identify your top business priorities. It reminds you of how much money you have available in each expense category; it’s easy to spot red flags and to see trends in your spending habits that you might want to change.
The cash flow statement provides a snapshot of your current position in the money market. There are two methods to build a cash flow statement.
The direct method requires less time upfront and is generally used in a way that categorizes payments such as rent, bills, and groceries. …
Cash flow statement is the difference between money in and money out of your business. You get this data from listing all your movements of your bank accounts and adding contextual details from your accounting.
Cash flow reports are crucial for any business to do well. Cash forecasts, debt capacity, hiring timelines, and investment plans depend on it. Even banks will require your cash flow statement for reassurance that your business is able to pay back loans or fund its operating expenses.
That’s where the difference between your profit and loss statement, prepared by your accountant, and the cash flow…
Open Banking — the concept of financial institutions such as banks opening up their data for secure, third party access — has been a much-discussed pathway to financial services innovation for years.
Historically, access to bank account information was limited only to the banks that kept this information. With open banking, access to account information is democratised. Consumers and businesses get instant access to and have better control over their data. Open banking allows a licensed third-party provider to view banking transaction data with the user’s consent, in order to deliver a value-adding service or product.
Every day, more than 170 million Single Euro Payments Area (SEPA) payments and 240 million card payments are sent in Europe. And every day, millions of finance and accounting professionals try to make sense of those payments, asking what they were, why they happened, and how to book them.
To make things worse, there are bank transfers, direct debits, debit cards, delayed debit cards, credits, cheques, remittances, and legacy niches. The business payments jungle is opaque and associated with drastically different costs across methods.
The fintech hype makes us believe that neobanks such as Penta, Qonto, Tide, and others swept over Europe, but the numbers don’t add up. Most businesses and startups still bank with traditional financial institutions.
In Germany alone, more than 500,000 new businesses are started every year, with a large chunk of it being growth startups. In comparison with Penta’s 30,000 customers, it seems like many European startups use traditional banks after all. In fact, about 99% of European businesses still bank with incumbent banks.
Finding the right bank can feel like navigating through a jungle. …
This is Patrick’s blog — our Co-Founder & CTO writing about his journey and tech experiences when building Airbank.
There are two things you can never say about SAP:
(1) “It can’t be done.”
(2) “It’s easy to do.”
— Corporate joke
Business finance is one of the fields where old-school software still finds shelter. While adjacent management territories such as marketing and HR evolved from paper wilderness to beautiful SaaS products, finance teams are still buried in spreadsheets, legacy banking portals, and bureaucracy.
In 1954, Peter Drucker famously said that the business enterprise has two — and only two — basic functions: marketing and innovation. Yet here we are, in a world where finance is imperative. So let’s reconcile.
Finance stores (banking), accounts (accounting), and manages (treasury) the firm’s reserves as per regulatory guidance. If you want or not, finance allows marketing and innovation to exist in the first place. And on paper, the rough setup of a finance team should be quite similar in most companies.
However, the perceived importance for the finance function varies greatly. Some businesses spend up to 1.8%…
Cash Management for modern businesses