Europe’s scaling problem is down to infrastructure, not ambition

This is a sponsored guest post by Søren Lonning, CFO at Pleo

Across the UK, mid-market businesses are hungry for growth. According to new research from Pleo, 88 per cent of UK finance leaders say their business is scaling or planning to scale.

The problem is that, while businesses are ready to scale, their finance systems aren’t. And instead of creating more customers, more market growth and more revenue, they’re inadvertently creating more problems.

New market, new friction

Key to realising the growth ambitions of the UK’s businesses is new markets.

Europe is prime retail for UK innovators, with 61 per cent of finance leaders saying cross-border expansion is critical or highly important to their plans. But just because it’s important doesn’t make it easy: as many as 71 per cent say scaling cross-border feels like launching a new business all over again.

A UK company might operate across five European markets. But this means they might also be dealing with five tax environments, multiple banking infrastructures, inconsistent approval workflows and disconnected data. All of which make maintaining real-time visibility a significant challenge.

This cross-border déjà vu is causing organisations a major headache, leaving many with concerns – and doubts – about whether scaling is worth the risk. This freeze isn’t just bad news for the UK’s businesses either, but its economy.

“The control tax”

To get scaling businesses back on track, the gap between their ambitions and capabilities must be closed. Right now, scaling comes with too much collateral damage and friction, and businesses are scaling… straight into complexity.

Right now, growth comes as part of a trade-off with additional approvals, reconciliations, reporting layers and manual checks. All in an attempt to maintain control. But over time, that creates a hidden “control tax”, where finance teams spend more time struggling to contain complexity than they do enabling growth.

More than half (56 per cent) of businesses currently scaling or planning to in the next 12 months say they are moving faster than their finance systems can keep up. It’s not just the systems that are strung out either, but the teams – with 55 per cent of finance leaders saying they’ve not spent a full uninterrupted day on strategic finance work in the past month.

This results in untapped growth. But on a day-to-day basis, it means reactive, fragmented setups that create noise instead of clarity. Never mind scaling business operations, this is a problem that puts maintaining them at serious risk.

How businesses can get out of strategic debt

Finance leaders are strategic architects of growth. But they’re spending a fifth of their time on finance busywork.

Activities such as scenario planning, personal development, market analysis and strategic modelling are all being pushed aside for low-value tasks such as manual data cleaning, processing and reporting.

The macroeconomic and political landscape has never been more fraught, meaning financial strategy must be fine-tuned with as much expertise, nous and safety nets as possible. But finance teams can’t do this if they’re snowed under with operational demands.

Migrating finance systems from admin-heavy processes to automated ones isn’t a new idea, but it bears repeating. Organisations are not moving quickly enough, and they are falling behind the pace when it comes to an evolving financial landscape and their own ambitions to scale.

For instance, finance teams are discussing AI transformation, but many still rely on outdated systems, and even spreadsheets, for expense and spend management. This disconnect highlights the real issue: businesses are layering innovation on top of fragmented foundations.

Building systems built for Europe

To scale in Europe, UK businesses need a system built for Europe.

Many businesses holding back from growth might suspect they have a scaling problem. But the reality is most likely a visibility problem.

To solve this, finance teams require integrated, automated solutions that deliver clean data, compliance and control, minus the elbow grease typically involved. This wipes out “the control tax” and means companies can focus more on what’s next, without looking over their shoulder.

Crucially, this requires teams to approach integration as a mindset, not an afterthought. To build a system that speaks the language of their other tools, and brings strength in numbers, not admin.

This is how the UK’s business and finance leaders can get back on track. With a system that doesn’t work against the grain, and means they gather momentum, not complexity.

Download Pleo’s Scaling Companies, Not Complexity report.