Today we look at 4 different ways startups and entrepreneurs can manage their finances with the aid of an online accounting software.
If you ask any entrepreneur about what keeps them up at night, sure enough, woes about accounting, compliance & finance will top their list.
Especially in businesses that are scaling up, founders need to take on several roles and often find efficient financial management a challenge.
When you’re starting a small business, there are a lot of costs to consider.
From the tools of your trade to marketing tools (like a website), office or coworking space to technology, to invest in a talented workforce, the costs can be overwhelming.
Thus, it’s understandable to try to defer some of those early startup costs by having notions such as “I’ll do that once I have money coming in!”
“I’ll invest in that when things really start to ramp up!”
“It would be my priority after I’m profitable.”
And besides the cost problem, let’s be honest: It’s just not exciting to invest in certain tools, because you can simply make do with your Excel spreadsheets until you have so much money flowing that you need a better tool.
The folks over at MSG91, one of the top 5 enterprise messaging solution in India right now too had similar notions with respect to how they manage their accounting.
But as their business grew, so did their accounting woes.
Soon, they shifted the gears and transitioned to a cloud-based accounting solution which offered them both the transactional and analytical capabilities in a single tool.
In no time they realized how online accounting is a boon for startups as it empowered their accounting department into taking care of their finances, creating a roadmap based on the financial insights and stay compliant without any worries.
But before we continue, let us first level-set on why you need an accounting software and then we will come back to how it can be beneficial in your entrepreneurial venture.
You Don’t Want to Be a Startup That Fails
Let’s get the truth out of the way. It’s a cold, harsh fact about startups: Most of them fail. In fact, according to a study, around 90 percent of startups fail in the first five years!
It may be that too little money comes in, or that too much is drained away by out-of-control expenses.
If you start out in control of your revenue and costs, you stand a way better chance of NOT being one of those startups that are doomed to fail.
By investing in the right accounting software and you’ll easily:
A. Stay on top of invoicing in a timely, accurate fashion.
B. Stay tax compliant and file your GST returns without any hassles.
C. Easily take the big picture decisions by making sense of your numbers thanks to easy to understand financial dashboard.
Now that we have come in terms of the fact that an accounting platform will absolutely help your accounting in abundant ways.
Let’s just look at 4 different ways you and your startup stand to benefit from it:
1. You are likely to master your capital.
….You can only measure and master what you can see!
Cash flow drama is probably the most familiar and visceral experience for most startup entrepreneurs.
To help your startup grow, you first need to master cash flow. And it’s next to impossible to master what you can’t measure.
If you’re not tracking your expenses and your costs, you’re just looking at your balance needle teetering between the safe blue and the dangerous red — with no insight into how to control it.
Online accounting software gives you control over your cash flow. You can easily track and measure income and expenses.
It’ll even help you understand and solve the problems that are in the moment such as-
Falling short one month? It’s time to start hustling into getting more clients.
Seeing too much money draining out? Time to take a step back and evaluate the leaks to cut costs.
2. You are likely to be more objective.
Being an entrepreneur is a passion project. You love what you do.
Odds are, you have dreamt about this and planned each course of action for a long time before making the first leap.
But that same passion can sometimes cloud your judgment. You may simply live in denial about the realities of your income and expenditure.
Part of becoming a mature business owner is learning how to look at your business performance without bias. Let the facts speak for themselves.
Again, an accounting software will help you do just this. You’ll see what services are bringing in the most money. And you’ll be able to see where you’re spending (and perhaps wasting) the most of your resources.
Learning to view things objectively can be an incredibly valuable perspective to gain. And odds are you are likely to get that with a tool that gives you easy, accurate and actionable facts.
3. You’ll be on a system you can scale with.
Sure, you can start out with Excel.
Most young-blooded newbie entrepreneurs do that initially.
Here’s the problem though: You’ll reach a point it no longer works. You’ll have too many invoices to send and track, and too many entries to register. And as you outgrow your spreadsheet cells, you’ll be faced with a difficult decision: Which software should I use?
At that crucial juncture of your entrepreneurial journey, you should be making choices that serve you better, both today and tomorrow and in the long future.
A cloud-based accounting software does just that by allowing your business to easily upscale according to your requirements as and when required.
From being able to easily maintain multiple companies within the same organization, to handling the reports from multiple branches when the time comes.
An accounting platform will make sure you are covered on all fronts and keep growing without waiting and wasting time looking for new options according to requirement.
4. You will save a lot of money.
If you’re just starting a new venture or are a startup with the limited funding you are on a tight financial leash.
By adapting to the online accounting the upfront business costs can be drastically reduced.
You would no longer need to worry about expensive version upgrades, maintenance costs, and server failures if you bring your finances to an online accounting solution.
With a cloud accounting software, all you pay for is a subscription fee based on the features and number of users for that billing period.
On top of that, a subscription plan includes updates, backups, bug fixes, a continuing round the clock support, be it for your accounting queries or for the times you want to request a new feature.
And the best part? Online accounting software Giddh, nurtures the startup community of the country by giving a 1-year free subscription to all the startups.
You already love what you do. You don’t really need to be convinced about becoming more passionate about technology, consulting, or whatever the service you provide is.
But to be a successful entrepreneur, you also need to train yourself to be passionate about managing your money.
Managing your finances really doesn’t have to be this unnatural “other” thing you do. Integrating an accounting platform to your business will surely help you integrate success to your business.
So, whether you’re a bootstrapped startup or you’ve secured funding, pay very close attention to proactively managing the finances of your business as it ebbs and flows.