Yes, functional currency would be crypto for a crypto first company.

If we take example of a SAP or XERO like software, a conventional company uses integrations/receipts from banks, sales platforms, physical receipts etc. In a crypto first company e.g. a crypto game dev company - the sales are in crypto, the funding via tokens is via crypto, the platform fees (defi apps) is in crypto - so a SAP/XERO like software is not build for purpose - hence my question that is a crypto first accounting/expense/reporting software needed.

Volatility will still remain if you use current mechanisms depending on how you book these assets on your balance sheet. Which more depends on how the taxman classifies them going forward.