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New tool takes on month-end close automation challengeby
The founder of Chaser has launched a new venture that ultimately aims to automate large swathes of the month-end close process – starting with the automation of intercompany recharge calculations.
Mayday, the second accounting tech startup from former Chaser CEO David Tuck, has today announced the launch of Recharger, a new cloud tool that automates intercompany recharges – costs and revenues recharged between connected entities of the same business.
Tuck, who previously founded and ran cloud credit control tool Chaser, has joined forces with serial startup chief technical officer James Griffin as co-founders of Mayday to tackle what he sees as an overwhelmingly manual and labour-intensive process.
“The aim of Mayday Recharger is to do for intercompany recharges what cloud accounting systems did for filing VAT returns and reconciling bank statements,” Tuck told AccountingWEB.
The Recharger product works by users creating a personalised set of recharge rules, much like bank rules on Xero, which decide how they want particular transactions to be treated. These rules are based on factors such as account code, tracking category or supplier contact. Once the rules are set, they can be used for all subsequent transactions.
When the user is ready to run calculations, for example at month-end, Mayday Recharger automatically pulls through transactions from the user’s accounting system via an Application Programming Interface. It then applies the relevant rules ready for the user to review the application of the rules, make any adjustments and finalise – much like running a VAT return from within a cloud accounting system.
According to Tuck, depending on the size of the business, this could reduce the time taken down from two or three hours to two or three minutes a month, allowing finance teams to run recharges monthly and keep management information up to date.
“At the moment, most finance teams have to export the information to a spreadsheet, run down it manually, then recalculate using Excel which formulates what the recharges should be,” he said.
Mayday Recharger is currently just available for Xero users, but the Mayday team is optimistic that the product will be expanded and made “as agnostic as possible” over the coming months.
A rising tide floats all boats
Following his departure from Chaser in 2020, Tuck has held a number of consulting positions at technology firms in the accounting or fintech industry while planning his next move.
He believes the increasing number of larger cloud native businesses that have scaled up and matured using cloud accounting solutions from the word go presents a huge opportunity for vendors to provide tools to help such businesses. He aims to use the automation of intercompany recharges through the new Recharger tool as a beachhead into providing a broader swathe of month-end close automation tools.
“A rising tide floats all boats,” said Tuck. “We’re 15 years into SMB cloud accounting and the number of more sophisticated businesses that want to do finance properly, with cloud software like Xero or QBO, without having to pay huge amounts more by moving to grown-up products is growing.
“Xero has more than three million users and the top 10 or 20% of those are not small businesses anymore,” he continued. “Many of this larger user base want to prolong their use of Xero or QuickBooks Online for as long as possible. I’ve heard a lot from accountants saying, ‘We love Xero or QBO but we wish it could do more things on top of it so we wouldn’t have to contemplate moving on’.”
Cracking the month-end
The Mayday product ultimately aims to be a natural destination for businesses that have been on cloud accounting packages for several years and have scaled up and grown more sophisticated with more complex requirements, but without switching out the underlying general ledger tool for more comprehensive tools such as NetSuite or Sage Intacct. And part of this for Tuck is cracking the month-end – a process he is all too familiar with as a former finance director and financial controller at several companies.
“Running month-end is always the set piece for a professional finance team,” he said, “be that in-house or an outsourced team charging four figures a month to deliver a finance function plus management information. The team has to get everything posted, management reports out, and when everything’s done start all over again.
“A one-to-five-person business doesn’t think much about month-end,” Tuck continued, “but when you get bigger than that, have a greater body of stakeholders and are forced to care about more things than ‘is the bookkeeping accurate?’, the processes start to get painful. There’s nothing out there that tackles this effectively – makes that process less painful in the way that cloud products and their ecosystems have done for bank reconciliations or VAT returns.”
Mayday Recharger is available for Xero users worldwide from today (20 April 2022), starting at £30 per month for businesses with two connected entities, with further entities charged on a sliding scale. For more information on Mayday Recharger and further pricing details, visit https://www.getmayday.com or find them on the Xero App Marketplace.