Not very long ago, companies would access business software by paying significant up-front fees for the purchase of a perpetual license. They then had to buy the hardware on which to install the software, hire staff to run the software, and pay software maintenance contracts each and every year. All in, this was a massive investment. But the software’s overall value proved to be mission-critical – so businesses budgeted for it accordingly.
More recently, software vendors have been taking advantage of the cloud to flip the perpetual license model on its head. SaaS, or Software-as-a-Service, is a subscription-based model that provides businesses with access to the same mission-critical software. Only this time, it is hosted in the cloud, thus eliminating the need for the costly infrastructure.
Now, sectors outside of IT have been looking at the “as-a-service” model for their own businesses. One of these sectors is outsourced accounting or virtual finance. At Ventura, we’re pioneering the use of several “as-a-service” resources to provide a more comprehensive approach to financial management and strategy for companies of all shapes and sizes.
So…what is Finance-as-a-Service, and how can it benefit your business? Let’s take a look.
Imagine you’re a mid-sized business that’s been around for a few years. Cash flow is a little unpredictable but revenues are steady. You have a bookkeeper on board to record your financial transactions, or maybe you’ve outsourced your accounting to a virtual accounting firm. Your tax returns and annual accounts are taken care of. But you’re missing the intelligence, insight, confidence and strategy to take your operations to the next level.
If that strikes a chord, then you’re exactly the type of company that Finance-as-a-Service can help. FaaS gives you access to a cohesive team of financial experts who leverage proven workflows and cloud-based technology to provide you with a comprehensive finance solution for your business.
It’s the equivalent of hiring an entire finance department at a fraction of the cost.
A FaaS accounting service looks very different from your typical accounting firm. It changes the purchase of accounting services from a ‘billable hourly compliance and reporting model’ to a ‘subscription-based strategic support model’, where services are provided on an as-needed basis for a recurring monthly fee. This allows you to pay for performance, manage cash, and dip in and out of services as you need them. The service scales you do.
Whether you are an SME or an enterprise, switching to a FaaS model can benefit your business in four important ways.
FaaS is built on financial software in the cloud, with all your accounting, invoicing, payments processing, payroll and more consolidated into one platform. This means that all your financial systems are able to ‘talk’ to each other and share data back and forth. Thanks to FaaS, the numbers get updated in real time so you always have the latest figures to inform your decision making.
Putting your financial information in one place and having it presented in an easy-to-read format makes it much easier for you to see patterns and discrepancies in your data, pinpoint bottlenecks and find opportunities for growth. For example, with FaaS you can:
See your cash position at a glance
Monitor the pace of collections and act proactively to nip late payments in the bud
Track performance against forecasts and budgets to keep the business on course
Calculate, monitor, measure and compare key performance indicators against your business goals
Demonstrate profitability to business partners, lenders and investors
By pushing all ‘the numbers’ through an interconnected system, you greatly reduce the opportunity for severe issues to fall through the cracks. Rather, you get a single, meaningful view of the data, across all product streams and departments, so you and your business partners can execute your strategic vision with confidence.
One of the most attractive aspects of FaaS is it’s potential to save you money. If you compare the cost of a FaaS solution with the cost of staffing an entire finance department – or even the cost of hiring a part-time controller or CFO – then the FaaS approach is generally much cheaper.
With Faas, all the financial software you want to use is in the cloud – you do not purchase, download or instal large software programs on your desktops. Everything is deployed and managed remotely. This is a stress-free and cost-effective alternative to traditional financial software installation, where you buy your own IT infrastructure and the software that runs on it, with your own IT and finance department to maintain.
A FaaS model can scale with your business. If your company is growing and you have more employees to manage; if you have a special project in mind or suddenly need a CFO to sit on your board and serve as an extension of your leadership team, then your financial infrastructure can be adjusted within a day. There’s no ringing around to see if anyone can help you with budgeting or meaningful financial advisory, no additional software to buy and no waiting times. Simply adjust your subscription and voilà – you have access to the exact resources you need.
It is precisely for this reason – the agility – that companies are switching to the FaaS model.
FaaS is not just about the technology – above all, it is based on human relationships. When you choose FaaS from Ventura, you get partnered with expert practitioners who have managed finance streams for businesses of all shapes and sizes, from start-ups to publicly reporting global corporations. Our people have transformed the finance back office, optimized working capital, managed acquisitions, spun off businesses and supported commercial decision-making all over the globe.
Our team will slot right into your business to address your finance needs with wisdom and experience. We stay with you for the length of your subscription, which means we have the time to really understand your business and deliver long-term planning and reporting to help you achieve your business goals.
For most SMEs and growth-stage businesses, FaaS offers unrivaled opportunities that can help offload transactional work, increase efficiency, get clear lines of sight, and enable a new era of business growth, all at a fraction of the cost of the traditional accounting department model.
If you want to learn more about how FaaS from Ventura can benefit your business, give us a call!