Startups in the UK are lining up to upgrade to accounting software, having observed early movers gain access to better profitability, thanks to improved efficiency and productivity. Some startups have quickly adopted accounting software after losing their edge over a competitor who migrated to accounting software before they thought of it. Others have upgraded at the suggestion of their bookkeepers and accountants; some after reading about it in management how-tos and others might have had a taste of it while working with an accounting-software-enabled supplier or client.
Running a startup looking to establish a reputation in the short term and eyeing growth, expansion, and perhaps looking to attract investors in the long term, you need all the tools you can get your hands on to achieve these goals quickly and cost-effectively. Accounting software can help you drive efficiency, improve productivity, streamline client relations, and increase professionalism. These factors make you better placed to achieve all the short-term and long-term goals you have for your startup.
Provided you give accounting software access to employees with the highest amount of data entry burden, you’ll notice that these employees are definitely able to get through a higher workload in a fraction of the amount of time.
With accounting software, data entry is much less tedious and time-consuming because the user just needs to snap and upload pictures of bills, receipts, and invoices to the software. The system uses Optical Character Recognition technology to create a digital data entry that can be extracted or copied and pasted as desired.
Startups can link their business bank account to their accounting software for data to flow seamlessly from the company’s bank account to their accounting books. With the human element in transaction entry eliminated, you get error-free data.
The seamless flow of data also means that you get live access to your start-up financial status at any point in time. No more working out of a weekly or monthly sheet that is technically outdated a few days after it is generated.
Additionally, you can access this live data anytime and anywhere via a partner app on your smartphone. An accounting dashboard gives you a snapshot of all the key performance indicators unique to your startup.
With so much data coursing through the system, and accounting software’s inherent smart tech abilities, it is also able to identify supply chain leaks.
Streamlined client relations
Just like accounting software has enough data ammunition to allow it to catch your supply chain leaks, it is able to also spot your most lucrative versus least lucrative clients, even more so if you run a bookkeeping agency.
Another benefit to outsourced bookkeepers is the business health checker, which allows them to evaluate the state of a client’s books instantly, giving them a good idea of how to approach pricing.
The data entries created by the system are automatically categorized using generic segregation, such as dates and types (invoice/ bill/ receipt/ currency, and so on). The user will get automatically-created folders containing entries sorted in this generic manner for easy access, as desired. Moreover, for corporate SOP compliance, a copy of the source document is retained with every entry.
Moreover, all the data is stored in one place and is easily searchable by keyword.
Accounting software also eases your invoicing process. It is not uncommon in startups for invoices to be forgotten, or late, but this interferes with cash flow and profitability. Similarly, it is very common for invoices from startups to be unstandardized, but this makes you look small, unrefined, and unprofessional. All these problems get fixed when the invoicing process is automated. The user gets prompts when invoices are due, is notified when a client opens or pays an invoice, and is alerted when invoices become overdue.
An undersold and underappreciated benefit of accounting software is its ability to tell you how upcoming tax laws are going to affect your profitability. This allows you to make calculations on how to adjust pricing in order to maintain or increase profitability on the heels of the new law. Some companies might want to gradually increase pricing in the run-up to the new tax law. Some might want to increase pricing in such a way that access better profitability (since prices will increase everywhere following the new tax law’s implementation). Others may want to increase pricing corresponding to the tax increase.
Whatever their strategy, it helps to be /able to plan ahead and to communicate with clients about increment pricing linked to increased taxation, ahead of time. Communicating ahead of time allows you to maintain transparency, allows the client to plan their cash flow, and gives you time to fire-fight or offer discounts if clients resist a price increase.
Takeaway: Adopt accounting software to give your startup the necessary ammunition to navigate today’s business environment. Opt for a free trial if you want a hands-on experience before making an investment.