When you’re busy building your start-up, financial management can feel like a millstone – even for small businesses like Satago, who work in the accounting sector.
Read on to discover how the software company tackled its biggest barrier to successful accounting – time – while nurturing investor confidence and acquiring some business referrals in to the mix.
About the Business
Having raised £30,000 through the crowdfunding platform Seedrs, Steven Renwick began building his automated credit control business in January 2013. But it was a subsequent investment of £600,000 through the online start-up and investor community, AngelList, that enabled him to formally launch his product in September the following year.
Satago’s invoice-chasing technology, which is currently aimed at small businesses, works by connecting with a client’s existing accounting software to fully automate the process of chasing their customers for payment. A further component of the cloud-based tool is its ability to highlight the risk profile of outstanding invoices and warn users when they are about to exceed their credit limits.
While Satago might be an accounting tool, it’s also a start-up business whose founder needs to concentrate on bringing it to market rather than getting bogged down with the financial management of his company.
“I had it in my head that all this accounting software was so good that I wouldn’t need an accountant or a bookkeeper – that I’d be able to do it all myself,” says Steven. “But, even with decent software beneath me, I pretty quickly found myself overwhelmed keeping on top of the administrative stuff – the corporation tax filing, annual accounts, VAT returns and so on.
“I actually ended up missing our first filing, which resulted in a fine. It was stressful and I was left feeling both guilty and stupid,” he admits. “I don’t like feeling stupid, and feeling guilty is never a good thing either… The most precious commodity you have as a start-up is the resource and the time of the founders – and I quickly realised I didn’t want to spend my time doing our accounts.”
Cost was a key factor for Steven and his colleagues at Satago; having previously taken a ‘DIY approach’ to financial management, he didn’t have an incumbent accountancy firm against whom to compare KPMG’s fees. But when he heard about the price-point for its Small Business Accounting (SBA) service, he was pleasantly surprised.
This, alongside KPMG’s reputation, was his primary motivation in choosing SBA.
“I’m getting the service at a local accountants’ price… but it’s another tick in the box having one of the Big Four doing our books,” he explains. “We speak with pretty sophisticated investors. So it’s good, when those investors ask who audits our books, that we can say it’s KPMG. It comes with an obvious stamp of approval, having one of the Big Four companies working with us.”
Steven reckons he could potentially capitalise on three primary benefits as a result of using KPMG’s SBA service. As he puts it:
Saving time: “Even if I were spending just two hours a week on financial management previously, it was still too much… Now I can focus on growing Satago.”
Increased investor confidence: “We’re a high-growth company and, looking five or ten years ahead, we might want to go through an IPO. It’s important our investors are confident in the future. If an investor comes down the line to put a couple of million pounds into our business, they’re going to want to see our books, and obtain some in-depth financial analysis on us. KPMG can do this much more quickly [than we can], and it’ll have a stamp of approval on it because it’s from KPMG.”
Efficient, one-to-one advice: “I definitely get the personal touch. I sometimes wonder how she can provide such a quick, professional service because I’m always bombarding [our dedicated accountant] Magdalena with questions!”
With an exciting new invoice finance product due to be launched imminently that could potentially change cash-flow management for small businesses and see an end to late payments, Satago’s business is certainly expanding.
“Our business is growing; it’s going to get more complex, and we’re going to need more support in the future,” reveals Steven. “We’re already working with KPMG on a separate VAT project, and I think the relationship will probably only deepen as time goes on.”
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