Financials are the most important aspect of any business, and knowing which financial services and tools are needed from the beginning to the growth phase can be tricky.
There’s a significant difference in handling money as a startup, compared to how you handle it as your business grows, to when it’s a well-established business.
In this article, we’ll guide you by providing the essential financial services your business needs through its various stages of growth.
1. Startup Stage (0–12 months): Laying a Solid Financial Foundation
At the beginning of any venture, entrepreneurs are often their own finance department. From juggling receipts to manually tracking expenses. The best financial approach would be to lay the groundwork for sound financial habits that scale with the business. Here are three key financial services you need in the startup stage:
Business Banking Solutions:
Start with separating personal and business finances. A business bank account, ideally one with low fees and integrations with accounting platforms, should be standard.
Basic Bookkeeping and Invoicing Tools:
You don’t need an accountant in-house just yet, but you do need accurate records. Cloud-based software like Sage or Zoho allows you to issue tax-compliant invoices, track cash flow, and stay SARS-ready.
Tax and Compliance Support:
You must register your business for tax, VAT, and PAYE once you pass certain thresholds. If you have the capacity, outsourcing accountants can help you stay compliant from the start, especially as penalties for late submissions can be steep.
2. Growth Stage (1–3 years): Managing Money While You Scale
It’s important to know what to expect in your business finances. Once a business finds product-market fit and begins generating consistent income, the financial needs shift from basic survival to supporting day-to-day operations and funding future expansion.
The essential financial services needed at this stage are:
Cash Flow Management Tools:
Managing cash flow can make or break a business. Using tools like Xero can help you track when money comes in and when it doesn’t. This visibility is what prevents payroll headaches or missed supplier payments.
Payroll Services:
Instead of manually handling payroll and making mistakes due to human error, invest in outsourced payroll solutions or cloud payroll platforms.
Short-Term Financing or Working Capital Loans:
Even healthy businesses occasionally need capital injections. This is useful for various costs, such as to restock before busy seasons or take advantage of supplier discounts. Products like invoice discounting or revolving loans from platforms like Lula can be more flexible than traditional bank loans.
3. Expansion Stage (3+ years): Optimising for Scale and Risk Management
At this stage, financial missteps are more expensive now, and small inefficiencies at scale can cost thousands monthly. Key Financial Services:
Advanced Accounting and CFO Advisory:
Scaling businesses need more than basic bookkeeping. CFO-level insights, even part-time, help with scenario planning, strategic cost-cutting, and investment readiness. Virtual CFO services are increasingly common for SMEs in South Africa.
Business Insurance and Risk Mitigation:
From public liability to cyber risk and key person insurance, your exposure grows with your success. Business insurance is not optional. Ensure your equipment, building, inventory, vehicles, and intellectual property are adequately insured. Additionally, ensure that you have coverage for business interruption, data loss, employee injuries, and professional indemnity to fully mitigate potential risks. A claim due to data loss or employee injury could cripple growth if you’re underinsured.
Cross-Border Financial Services:
If you’re exporting products or servicing international clients, you’ll need forex solutions, multi-currency accounts, and possibly tax advisory for cross-border compliance. Platforms like Payoneer and Wise Business offer excellent cross-border services tailored for South African SMEs.
Grow Your Business With Financial Tools and Services
The financial services you use should evolve with your business. A one-size-fits-all approach not only wastes money, but it creates blind spots that slow your growth or expose you to unnecessary risk. Consider working with an expert or mentor, particularly one familiar with your industry, to gain guidance on the best moves to make for your business.
Whether you’re starting from a small room or expanding across provinces, understanding the right financial tools at the right time is what separates thumbsucking entrepreneurs from strategic leaders.
Take time to review your business stage and invest in financial services that support where you’re going, not just where you are.
Financials are the most important aspect of any business, and knowing which financial services and tools are needed from the beginning to the growth phase can be tricky. There’s a Read More
