Financial technology is a key pillar of today’s businesses. Digital access is an important feature for consumers as it comes with a layer of utility that generally makes life easier. For a startup, having these fintech tools at hand can be the key that helps build a solid customer base and propel the business forward. We take a look at the three vital financial technology tools that a startup needs:
- Comprehensive payment processing
Startups, by nature, provide specialized services and/or products that aim to disrupt the existing market and solve challenges being faced by consumers. These products can be consumed by individuals from anywhere in the world as the digital divide continues to be closed. As access to a product or service grows, a startup will need a payment processing tool that can serve its client base.
Convenience is one of the major properties that draw customers to a service. A good payment processing system should make it as easy as possible for people to make payments. It should also allow one to set up a debit order where recurring invoices are dispatched when they are due. This means that a customer does not need to go through long verification processes each time they need to make a payment to your business.
- Expenditure monitoring
In the early periods of building a startup, it is normal (and expected) that the business will be operating at a loss. During the time when the product is still being built, there is little to no revenue for the startup. A significant amount of the available funds also goes into marketing the startup and making it visible to the public.
While a burn rate that is higher than what a startup can bring in is expected, there is still a need to try and slow it down to give the startup a longer life span on the same amount of cash. To achieve this, you need to keep track of the expenses being incurred and see where the bleeding can be stopped. Expenditure tracking also helps to gauge how much the startup needs on a month-to-month basis which informs the product’s pricing. Investors will also be interested in the tracked expenditure as they seek to understand the business and the potential it carries.
- Payroll systems
Startups more often than not start with a small team that can cover the essential parts of the business. Services such as human resource management will need to be outsourced as the startup will likely not be able to carry a high wage bill. An alternative to outsourcing such a service would be making use of software that can handle the basics of HR management.
Such a system can help with the tracking of time worked and time taken off, tax handling, and benefits management among other things. This system could work along with the expenditure tracking software to create a clearer picture of the startup’s financial standing. The best systems in this bracket go as far as filing the necessary tax documents to help you stay tax compliant. The last thing any startup needs is to have its growth hampered by a payroll challenge that affects the disbursement of salaries on time or a missed tax filing that affects tax compliance.
Financial technology tools are important for any business and even more so for startups. As a newly founded business tries to find its feet and perfect its working model, fintech tools assist in painting a clear picture of where the business is and where it’s going. Making use of good financial technology tools helps build your business on a strong foundation.