Financial management is an essential component of running a successful business. Despite this, many startups and small-to-medium-sized enterprises (SMEs) struggle to manage their finances effectively, leading to high failure rates. Muhammed Shafeekh, the CEO of Finanshels, a Finance management AI company, recently shared his perspective on the changing landscape of accounting and the challenges that SMEs face in managing their finances.
The Challenges of Starting and Running a Business
Shafeekh shared his personal experience as a founder, and how financial burden can cause entrepreneurs to go into debt and crisis. He highlighted that many founders put all their life into starting a business, and failure can lead to devastating consequences. He mentioned, “It is not much talked about, but there is a dark side to running a business when it fails”
He believes that it is not the problem with the founders but the finance operations as a whole. Accountants run stills on conventional models, just counting beans rather than becoming business advisors. Therefore, he stressed the need for improved accounting practices to address the high failure rate of SMEs in the Middle East.
The Importance of Financial Management and Improved Accounting Practices
According to Shafeekh, proper financial management is critical for the success of any business. He points out that many SMEs in the Middle East fail due to poor financial decisions and inadequate financial management. He states, “If you look at the statistics, 50% of SMEs fail in the Middle East, and 82% of them fail due to poor finance management.”
To help SMEs address these issues, Finanshels is developing a digital platform that enables business owners to monitor their financial health in real-time using a dashboard and chatbot that can provide immediate answers to financial queries. The platform aims to provide a comprehensive financial management solution that empowers SMEs to make better financial decisions and avoid the pitfalls of poor financial management.
Finanshels’ Business Model and Services
Finanshels’ business model is based on a subscription model and provides tech-enabled services to help founders and CFOs improve their financial performance. Shafeekh believes that the future of accounting lies in automation, with accountants transitioning from number-crunchers to business advisors. He states, “In the next decade, 90% of accountants’ operations will be automated, and accountants will become business advisors.”
Expanding the Reach of Finanshels
Finanshels is focused on creating at least 1,00,000 sustainable businesses in the Middle East and helping them grow. The company’s expansion strategy involves leveraging macroeconomic trends in the region and speaking to as many founders as possible to identify new opportunities for growth.
The Changing Accounting Industry
The CEO noted that the accounting industry is changing rapidly, and becoming more automated. He believes that accountants will become business advisors rather than number crunchers in the future. He said, “In the next decade, 90% of accountants’ operations will be automated.”
The Role of Technology in Accounting
In terms of technology, Shafeekh explains that Finanshels is using generative AI and Google products to automate heavy operational and human-intensive processes. He believes that technology can revolutionize the accounting industry, but cautions against becoming too reliant on it. Shafeekh emphasizes the importance of balancing technology with human expertise to achieve the best possible outcomes for businesses.
Shafeekh’s insights provide a valuable perspective on the future of accounting and the importance of proper financial management for SMEs. Finanshels’ digital platform and services offer a promising solution to the challenges that SMEs face in managing their finances, and the company’s commitment to sustainable growth is a testament to its mission to empower businesses to succeed.
