It’s Time to Smart Up Your Startup
Few people—CPAs being an exception—go into business jazzed about accounting. But because most—CPAs included—go into business to make money, accounting discipline is necessary.
For many startups (or mom-n-pop businesses) without venture capital funders or angel investors, accounting is an Excel spreadsheet, scanned receipts, emailed invoices and a credit card. But even the sole proprietor looking to grow a sustainable business knows those band-aids do not make for reputable business relationships in the eyes of potential suppliers or clients. Accounting records from current inventory to accounts payable need to be accessed as quickly and easily as the sales rep’s calendar…and need to be just as accurate.
You wouldn’t think of scheduling a meeting with the prospect you have been chasing unless you were sure you could make the appointment, on-time and prepared. But manual accounting practices can be difficult to organize because they require significant data entry and recordkeeping. The sheer heft of the task means it may be pushed to a lower priority, especially in a small outfit, delaying response to investors, auditors, creditors, and ultimately hurting the business’s opportunities for growth.
Here are five reasons you need accounting software.
- You find accounting boring. We hear you: You just want to expand your client base. But you need up-to-date, reliable financial information to meet your objectives and set goals. Accounting processes affect company productivity and decision making across functions.
- You think accounting is paying the bills and making deposits. When invoices come in, you’ll put them someplace accessible so you remember to pay them on time (or ask to push the terms out if cash flow is a problem). When payments come in, you’ll happily and immediately deposit them. Ostrich, take your head out of the sand! Accounting software embraces supplies on hand, automatic replenishment, manufacturing plans and processes, inventory and fulfillment, and more.
- Your current accounting process takes too much time. You need to maintain an audit trail, but because you’re doing it manually, your records may be incomplete or in error. And given that you have no central online resource but use disparate systems for different accounting needs, your data may be wild with inconsistencies. An integrated system will flag duplications and mistakes for attention and correction.
- Your business deserves better than Excel worksheets, a shoebox of receipts, a green eyeshade, and all of your fingers and toes exposed. You know it does.
- You’re thinking ahead. A strong, sustainable business takes planning. If you design prototypes/build relationships/drive to client sites/manage a shop floor all day, the last way you want to spend your evenings is entering digits and creating formulas in a spreadsheet.