Innovation in finance: Lessons from a VP Finance

When I started in finance, my peers thought I was taking a huge risk. We were just on the brink of machine learning, Artificial Intelligence (AI), and Robot Process Automation (RPA). And so, over dinner, they would laugh and say that innovation and automation in accounting would see me out of a job within three years.

Fast forward to 2022, a decade or so later, and nothing could be further from the truth. 

The reality is that automation in accounting and innovation in finance has proven to be far more expensive, have a lower return on investment (ROI), and is far more complicated than the world thought it would be. 

In some instances, it is actually more cost-effective to hire an entire team long-term, than it is to pay an external company exorbitant fees to implement RPAs that then have to be constantly maintained and customized to adapt to each business and customers’ needs and demands.

The problem is that while full automation of accounting sounds easier, it has proven to be very challenging.

At every twist and turn in your business, the return on investment (ROI) of your next move needs to be considered. Unless you are a sizable business pulling in $10 billion a year and have a surplus of cash to burn, every piece of technology – from Enterprise Resource Planning (ERP) to reporting tools and automation) needs to be carefully considered and evaluated against a robust business case. 

This means that for smaller companies, there’s a tipping point - a before and after where automation actually does become more effective than hiring. In other words, leaders in growing businesses need to work out: How far can your current business scale without having to double your finance, reporting, and tax teams?

For software and SaaS businesses, Paddle can actually mitigate this issue from much earlier in the process – and help you scale up to and beyond this tipping point more efficiently. And it’s a huge part of why I joined the team. 

There are innovative software companies out there with great software to share with the world. But instead of doing so: 

• Product and engineering teams spend their days working out how to connect, build and maintain payment and billing systems. 
• Accounting and finance teams spend their time processing transactions and managing chargebacks or managing sales tax compliance and looking out for new regulations. 

Even for a small start-up, why would you use valuable resources on these processes (rather than growing a great product and financially secure business) when there is a single vendor that can do it for you? 

Paddle’s technology does a lot of the heavy lifting – and automates much of the process – but there are also whole teams of people working hard behind the scenes for our sellers, so their teams don’t have to. 

So, what has this taught me about finance automation? And if I knew then what I do now, what would I have said to my friends 10 years ago when both Paddle and my Finance career were in their infancy?

Automation in finance and accounting has and will continue to change the game. But not in the sense that it replaces your finance team. Quite the opposite. When the business chooses the right tools for the job, your finance is freed from managing the systems intended to make life easier, scanning the horizon for upcoming sales tax regulations, and gathering evidence for audits and empowered to focus on high-level projects that drive innovation and growth – like avenues for funding, and efficiency in resources and tooling, as well as helping everyone across the business understand how finance relates to their function. Your finance team is an integral part of how a business innovates, scales, and expands efficiently.