Machine learning in accounting is changing how startups manage their finances. Learn how it could apply to your business.
February 25, 2021
Most startups quickly find that manual bookkeeping isn’t sustainable as their business grows. By using accounting software to manage your finances, you can reduce the time you spend on repetitive tasks, keep more accurate records, and produce professional-looking financial reports. But which accounting software should your startup choose?
There are three main types of accounting software: Commercial Off-The-Shelf accounting software (COTS), Enterprise Resource Planning software (ERP), and custom accounting software. For startups, COTS is almost always the right choice. Small and mid-sized businesses will find ERP software to be expensive and unnecessarily complex, while COTS still offers all the features you require at the startup stage yet remains cost effective and relatively simple to use. However, if your business grows into a large-scale enterprise, you will likely need to switch to an ERP platform that can handle more complex financial requirements.
QuickBooks is one of the most popular COTS accounting software options with over seven million customers globally. There are two main QuickBooks products from Intuit: QuickBooks Desktop and QuickBooks Online. The desktop version of QuickBooks is hosted locally and installed on a computer, whereas QuickBooks Online is hosted in the cloud on secure Intuit servers and accessible from any computer, tablet, or smartphone with an internet connection. The online version of QuickBooks provides more third-party integration options than QuickBooks Desktop, and it’s better suited for a remote working environment and collaboration with an outsourced bookkeeping solution (freelancers/consultants, independent contractors, or finance firms alike).
Because of the following six key benefits of QuickBooks Online, we recommend that startups choose this platform as their accounting software solution.
Most startups have to work within a tight budget in the early days of operation, so choosing an accounting system with affordable monthly fees is a necessity. QuickBooks is one of the least expensive options on the market, offering pricing plans that start from $12.50 per month with robust accounting features. As your business grows and you need to add more users to your QuickBooks plan, it’s easy to switch to a higher pricing plan without losing any of your data. Unlike some COTS accounting software, QuickBooks does not lock your startup into a lengthy contract: You’re free to switch or cancel your subscription at any time, and you won’t need to commit to paying a lump sum upfront.
Not only does QuickBooks offer affordable plans, it also provides good value for startups. QuickBooks’ bookkeeping features include all the basics most startups need, including income and expense tracking and essential reporting, including your monthly financial statements (profit and loss statement, or P&L, balance sheet, and statement of cash flow). For growing businesses that have more advanced finance needs, you can easily add extra capabilities and features like bill pay (accounts payable), invoicing (accounts receivable), inventory tracking, and sales reporting by upgrading to the QuickBooks Online Pro plan. To see how QuickBooks’ feature set compares with other popular bookkeeping software platforms, take a look at our accounting software comparison for startups.
See also: 8 Best Accounting Tools for Startups
Most startups use a number of finance tools to manage the various aspects of their accounting processes, including payroll software, bank accounts, credit card accounts, and invoice and bill pay tools. Particularly as your business grows, you may need specialized finance tools that can handle a higher level of complexity for each function. Some accounting software options only integrate with a handful of other platforms and limit the other finance tools from which you can choose. QuickBooks Online integrates with over 650 other business tools—including Bill.com, Expensify, Justworks, PayPal, and Gusto—and automatically syncs all your data, so you can understand the full picture of your startup’s financial health and streamline your month-end close process.
Many startups and small businesses alike begin with using QuickBooks Online because of its user experience; QBO is one of the easiest accounting software platforms to implement, and provides users with greater functionality than spreadsheets. More complex platforms like NetSuite or Sage can require several months of setup before you can use the software and cost tens of thousands of dollars for a third-party expert to migrate your data. With QuickBooks Online, you can start using the platform within the first day, and a full data migration and setup only takes a few days (depending on how long your business has been in operation).
The QuickBooks Online interface is user-friendly and intuitive, so even founders with limited finance experience can find the information they need to start carrying out basic bookkeeping. QuickBooks offers video tutorials, including a virtual orientation process and other online lessons, that explain how to use the platform. Plus, you can contact the QBO customer support team for technical support or additional help by email, online chat, phone, or even video chat. It also offers a variety of templates and sample chart of accounts to help get you started. However, as with any accounting software, you’ll benefit from working with a bookkeeping service as soon as possible to avoid common startup bookkeeping mistakes.
When you’re choosing a bookkeeper, accountant, or finance firm to work with your startup, it’s important to know if they have experience with your accounting software. If they aren’t familiar with your chosen platform, you are more likely to end up with errors or missed opportunities in your accounting processes. Especially if you choose an uncommon or brand-new accounting software, it can be challenging to find finance professionals with the right experience to manage the software, and still provide the expert advice and guidance your business needs. One of the benefits of using QuickBooks is that it is a well-established and popular choice among accounting professionals (many have their QuickBooks certification), so it’s easy to find accountants who are experts in using the platform and can help manage your business accounts with proficiency.
Rather than being limited to a specific computer on which your accounting software is installed, QuickBooks Online provides access to your financial records from anywhere in the world, making it well-suited for startup teams working remotely or globally. Your accountants also don’t need to be local or have physical access to your office; they just need a login and password to access your company file, allowing you to choose from a wider range of finance firms.
Cloud storage is also a more secure way to keep your accounting records: Even if your computer is damaged or malfunctions, your important data is stored remotely and won’t be impacted. Unlike working with physical software that may need to periodically updated or reinstalled, cloud-based accounting software is centrally updated, so you are always automatically using the most up-to-date version. This is especially helpful during tax time, to allow your CPA to seamlessly access your books, receipts and invoices, and other important documentation, regardless of their physical location.
Many startups aren’t benefiting from all the advantages of using QuickBooks. Although most business owners can get started with a basic QuickBooks setup, they often don’t have enough experience with the platform to optimize the way they use the software to best support their business finances. With so many demands on their time, many founders also find it challenging to monitor and verify every line item in their QuickBooks account, leading to costly accounting mistakes. This is when working with a finance firm like Zeni that has years of QuickBooks expertise can make all the difference.
Zeni is a full-service finance firm that takes care of all your startup’s bookkeeping, accounting, tax, and CFO needs. To help you benefit from the many advantages of QuickBooks accounting software, Zeni’s team of QuickBooks experts will help set up your bookkeeping system in QuickBooks Online and ensure all your data is correctly imported and organized. We’ll also manage your QuickBooks account to fully support your startup finance operations, from categorizing transactions with departments and classes to syncing your online banking and other accounting tools. And, because Zeni is an Elite Partner with QuickBooks, Zeni customers receive 50% off their QuickBooks Online subscription.
By leveraging a seamless blend of artificial intelligence and our team of human finance experts (made up of bookkeepers, accountants, CPAs, tax advisors and CFOs with 100+ years of collective experience), Zeni performs daily bookkeeping which allows a startup founder to track key trends and insights such as runway, burn rate and OpEx — in real time, every day — via the Zeni Dashboard.