From XU Magazine, 
Issue 25

Invoice automation for multinational tech start-ups in Africa

Iridium is a South African accounting, advisory and automation firm serving six core industries: retail, hospitality, e-commerce, digital marketing, manufacturing and tech start-ups.

A common challenge for tech start-ups across Africa: their fast growth makes expense management a tall order

Tech start-ups often have big teams of 150-200 people. As the organisation grows – and growth can be fast – they start to put more and more processes and controls in place. They also tend to become multinational businesses: whenever they move into a new region, tech start-ups usually create a new company in that area, especially when they have a team there. So, the process for expense management becomes a very sensitive one that needs to be taken good care of. They definitely need comprehensive and granular financial controls.

Paper- and email-based approvals slow down operations

Before we mastered this challenge for our clients, most of them used primarily paper: they printed everything out and then waited for people to sign off the documents. Approvals were also requested via email, which the responsible person would reply to by writing “Approved”. That was it, their approval system. Either way, it was really slow and literally relied on approvers being in the office with the document in front of them.

For companies of this scale, it’s essential to use cloud systems that ensure simultaneous and easy access to data from any location. Process automation is vital for tech start-ups because they grow continuously, which means doing things manually is simply impossible. To keep on top of the accounting tasks, they need data digitisation tools to convert bills and purchase orders from paper as well as capable apps for the automation of approval and audit processes. Personally, I’d say it is even more important at the moment that accounting and other software supports mobile devices and the BYOD approach.

Iridium’s trusted app stack for tech start-ups

We developed a unified model that fits most tech start-ups in Africa as they all tend to have certain characteristics: a number of entities in various regions as well as a large team with several departments and projects. In general, they use Xero tracking categories – typically 2 of them: department and location or department and project. Our standard app stack includes Xero, ApprovalMax, Expensify and Receipt Bank. By implementing this app stack everything can be moved to a digital environment and manual tasks are completely eliminated. It enables a properly organised, much faster, efficient and transparent process.

Thanks to this app stack, our clients don’t need to print out documents and sign them physically. So, approvers don’t have to be at their desk when a request comes in, a massive benefit. Another major advantage of this approval workflow is the enforcement of our approval matrix based on the company’s rules and guidelines.

Setting up spend control for large teams

Our first ever client was Zoona. Lots of people in Africa don’t have a bank account, making money transfers a challenge. Zoona has solved this problem by establishing a network of money kiosks across the whole of Africa. By using such a kiosk and a mobile phone – and that’s any mobile, not necessarily a smartphone – anyone can make a money transfer, or receive one.

When Zoona came to us, they had 5 different companies and over 150 staff members across five countries. Obviously, managing approvals without a good process was difficult for them. We moved them from a desktop accounting solution called Pastel (the African version of Sage) to Xero and implemented ApprovalMax, Receipt Bank and Expensify.

Another good example is Yoco, a point-of-sale payments provider for small businesses that are growing across Africa. When Yoco came to Iridium, they were already a multinational company with about 150 staff members and an approval process that had a lot of room for improvement. But with the right app stack, we managed to set up an efficient workflow for them as well.

When it comes to their authorisation workflow, companies often think they know what they’re after. But as you unpack the one they’ve got, you start seeing gaps in the process. I usually ask them to document their approval process with an Excel spreadsheet before we implement ApprovalMax; that’s when they start reformulating it as they go. This shows that a lot of tech start-ups don’t really have a clear idea of proper approvals after all. They do realise the importance of implementing a good process though. In most cases, their approval process actually gets refined and improves a lot when ApprovalMax is introduced.

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