Beyond the Spreadsheet

Board meetings at financial companies where the entire financial presentation is a single spreadsheet, emailed the night before, with no cost centres, no product breakdown, no client-level profitability, and no comparison to budget – are more common than anyone in the industry admits.

The board nods, asks a few surface-level questions, and moves on. Nobody knows which products are making money. Nobody knows which merchants are profitable and which are costing the business. Nobody knows whether the company is ahead of or behind its plan – because there is no plan to compare against.

It's not that the finance team is incompetent. It's that nobody designed the management information architecture. The company grew from zero to processing millions in transactions, and the reporting infrastructure never caught up.

In the early days, a single spreadsheet was enough. Revenue minus costs equals profit. But where things usually get out of control is that payment institutions are complex businesses with multiple revenue streams (processing fees, payment execution fees, FX margins, interchange, monthly fees), multiple cost layers (scheme fees, banking costs, processing costs, compliance costs), and multiple dimensions (by product, by client, by geography, by currency) – and they become so quite quickly.

However, without a designed reporting structure, finance ends up rebuilding the same analysis from scratch every month – pulling data from the gateway, cross-referencing with bank statements, manually allocating costs, and hoping the numbers reconcile. By the time the board report is ready, it's two weeks late and everyone knows it's approximate. It's not detailed enough along the right axis to understand what decisions exactly need to be taken, and where the strategy should be moving.

It starts with cost centres. Every expense should be mapped to a function: operations, compliance, technology, sales, general and administrative. This isn't complicated, but it requires a decision about how the business is structured – and someone needs to make that decision and implement it in the accounting system.

Then product-level P&L. If the institution offers card acquiring, Pix processing, SEPA payments, and card issuing, each of these is a product with its own revenue and cost structure. The board should see the margin on each product – not a blended number that hides the fact that one product is subsidising another.

Then client-level profitability. Not every merchant is equally profitable. Some process high volumes at thin margins. Some process low volumes but generate significant FX revenue. Some cost more in compliance and risk monitoring than they generate in fees. Without client-level data, pricing decisions, retention decisions, and strategic decisions about which market segments to pursue are all guesswork.

Then get into the trouble of allocating the overheads and G&A. It's not a simple task, and it is based on assumptions. But unless it's done, the information on profitability is never accurate enough to support the knowledge of whether a direction, a client, or a product is actually earning or losing. And if the business chooses to maintain something with targets other than the bottom line, that's fine – but it should be conscious and controlled.

Then budget versus actual. A board that sees only actuals has no context. Is €200K in monthly revenue good or bad? Compared to what? A budget model – even a simple one – gives every number meaning. It turns reporting from "here's what happened" into "here's how the business is performing against plan."

Finally, regulatory reporting. The central bank requires periodic reports – supervision reports, prudential returns, statistical reporting. These should flow from the same data as the management reports, not from a separate manual process. If regulatory numbers don't reconcile to management numbers, there's a data integrity problem that the auditor will find.

Poor management reporting doesn't just frustrate boards. It has real consequences.

Pricing decisions are made on gut feel instead of data – leading to underpriced merchants and margin erosion. Unprofitable products or clients persist because nobody can see the P&L. Fundraising conversations stall because investors can't get clear answers about unit economics. Regulatory reports take weeks to prepare and are always slightly different from internal numbers. Auditors spend extra time (at the company's expense) reconstructing the data that should have been available from the systems.

And the biggest cost: the CEO and board are flying blind. Strategic decisions – which markets to enter, which products to invest in, whether to acquire or be acquired – are being made without the financial visibility to make them well.

The measurement system gets built. Take care of this early, if not on day one. Cost centres, product P&L, client profitability, budget models, board reporting packs, regulatory templates. Designed once, even if there's a phased implementation – from a simple direct cost allocation to gradual growth and fine-tuning with allocating the overheads and G&A. Implemented in the ERP and maintained so that every month, the numbers are ready before the board meeting – not after, and approved before they leave the finance function.

Because if the board is waiting for numbers, the operations aren't quiet enough.