Couverture de Modular Finance That Works for Multi-Entity CFOs with Michael Wood

Modular Finance That Works for Multi-Entity CFOs with Michael Wood

Modular Finance That Works for Multi-Entity CFOs with Michael Wood

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 The Founder Who Learned the Hard WayWood built Receipt Bank from a startup to a £500 million exit to IRIS Software Group in 2024. During that journey, Receipt Bank eventually migrated to NetSuite as they scaled. Wood now says if today's technology had been available then, they would have stayed on their modular stack rather than making that expensive, complex transition.As someone who's lived through a painful ERP transition, Wood sees the opportunity to help businesses avoid this pain. The idea for Translucent centres around the fact that the general ledger is essentially an API layer, and works well for many businesses. There is a constantly evolving app ecosystem marketplace that enables businesses to plug in ones to fit their unique use cases. By providing this multi-entity system, businesses can have multiple Xero entities in the UK and Australia, a QuickBooks setup in the US, and a Pennylane in France. Businesses can use the tools that they know, yet create reports in one place, avoiding or delaying the ERP migration until a much more significant scale than would have been possible before.Translucent's core capabilities include automated group reporting with real-time FX conversion, intercompany reconciliation, treasury consolidation across currencies, and unified search across all entities. The platform operates as a data warehouse that syncs and harmonises information from Xero, QuickBooks, Sage, and Pennylane, enabling enterprise-level consolidation without forcing companies to abandon familiar SMB accounting tools.The market response has been favourable. Translucent achieved 1,000 Xero entities in just 168 days - claimed to be the fastest any Xero app has reached this milestone. The company has raised £7.7 million across pre-seed and seed rounds, attracting notable investors including Craig Walker (Xero co-founder/former CTO) and Gary Turner (Xero co-founder/former UK MD) as board members.The Fractional CFO Movement Is Accelerating This ShiftThe fractional CFO movement is driving a fundamental change in how growing companies approach their finance stack. These strategic partners bring experience from their time at multi-entity organisations, and they're proving that modular finance stacks are not just viable–they're smarter.“Our experience of the market is most people do not want to leave Xero. They want to stay, but they have a problem. That problem may be forecasting, it may be intercompany automation, prepayments, consolidated reporting, working at AP groups, across the group. It can be all sorts of different things, but normally they are running this, you know, these multiple zeros, this multi entity setup, and they have a burning problem. And what we try to do is to help them with that first problem”Unlike permanent CFOs who might default to familiar enterprise solutions, fractional CFOs see the same problems across dozens of clients. They watch companies struggle with ERP implementations, and they are starting to see alternative paths becoming viable, bringing both significant time and cost savings.This positions them perfectly to challenge the old orthodoxy. When a fractional CFO with experience across 20+ implementations says, "you don't need NetSuite yet," that carries weight that transforms boardroom conversations.The Hidden Reality: ERPs Are Failing at ScaleThe statistics behind ERP implementations tell a sobering story that fractional CFOs are increasingly aware of. According to Gartner research, 55-75% of ERP projects either fail outright or don't meet their intended objectives. Only 23% of all implementations are considered successful by organisations' own standards.Major companies are reversing course on massive ERP investments. Lidl scrapped its €500 million SAP implementation after seven years, reverting to legacy systems. Avon's $125 million SAP failure saw 33% of sales representatives quit rather than struggle with the complex interface. Mission Produce lost $22.2 million in gross profit when their ERP implementation left them unable to track basic inventory operations.Cost overruns represent perhaps the most shocking revelation. Organisations experience an average 189% budget overrun, meaning ERP projects typically cost nearly three times the initial estimates. Timeline delays compound the financial pain, with failed projects experiencing schedule overruns averaging 230%.Notably, only 33% of companies report satisfaction with their ERP systems, and 56% of organisations have a "high degree of purchase regret" over their largest technology purchases, with ERPs frequently topping the list.The Rise of ERP Fatigue Drives SimplificationA significant shift is underway as companies experience "ERP fatigue" - exhaustion with monolithic systems' rigidity, costs, and complexity. By 2027, IDC forecasts that 75% of global businesses will begin replacing monolithic systems with modular, API-driven solutions.The symptoms of ERP fatigue are consistent: inability to adapt quickly...
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