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September 30, 2022
The era of the startup is upon us. The competition is fierce, with more people striking out on their own to create businesses. To succeed, startups need to be efficient and well-organized, especially regarding finances. Excel spreadsheets are an easy way to keep track of your finances in the beginning. However, your business won’t stay small forever.
As your business grows, manual entry of multiple daily transactions becomes time-consuming. Your Excel sheet will swell, and finding a specific transaction becomes a frustrating chore.
Even though startups are a fraction of the size of an established corporation, plenty of startups are opting to move from bookkeeping in Excel to bookkeeping software. Several situations signal it’s time for you to follow the movement.
Excel offers a few benefits to founders who need to record all company transactions quickly. There are plenty of templates that outline the basics of what you need to do your own bookkeeping and generally track daily cash-in and cash-out. These sheets allow for easy editing, are shareable, and are relatively simple input-wise.
However, Excel doesn't offer many benefits when you get to the more complicated stages of forecasting and generating financial statements like balance sheets and cash flow statements. These reports require advanced formula input, which is often a learning curve for non-finance professionals.
In comparison, accounting software automates most of the day-to-day responsibilities of a bookkeeper that Excel does not. Many software options allow you to customize your workflow to fit your company's needs.
Microsoft Excel is a good starting point, but if any situations below feel too familiar, it may be time to switch.
Excel sheets require manual entry for every cell. While you can input formulas with a bit of research and a deeper understanding of Excel, this process is still manual. As your company grows, the number of transactions will increase, meaning more time spent with data entry. If you struggle to find the time to consistently (preferably daily) update your transactions, your company has outgrown Excel.
Even with an Excel bookkeeping template, mistakes happen. Unfortunately, Excel doesn’t have a system to catch bookkeeping-related errors. Spending too much time on one thing means placing attention to other vital aspects of your business — such as fundraising, product development, or team expansion — on the back burner. A few mistakes aren’t unheard of, but consistent inaccuracies will begin to balloon and affect other areas of your business.
Unlike accounting software, other applications that automate different parts of your business cannot integrate with a basic spreadsheet. Even if they could integrate, Excel was not built to sustain massive amounts of data. While the program can support 1,048,576 rows and 16,384 columns, adding too many complex formulas or direct attachments can crash the platform or limit sharing capabilities due to file size.
Customization is an excellent feature of Excel, but it can take an hour or two to set up. Invoice tracking and expense reports take a hefty amount of time to set up, and that’s just the basics. Since startups run a mile a minute, rapid changes aren’t unheard of, specifically during times of growth. If you’re consistently moving from one spreadsheet to another for the sake of organization, then your system is no longer optimal.
Automating anything is always going to take the weight off your shoulders. Regarding bookkeeping, automation makes your life easier and ensures financial accuracy.
1. Error detection – Accounting software isn’t perfect, but most programs have a built-in safety net to catch any errors.
2. Audit trail – Maintaining an accurate record trail is extremely easy. Bookkeeping software automatically secures all your financial transactions, dates, vendor information, and more in one place, making it simple to pull reports or details for audits as needed.
3. Speed – Automating daily tasks speeds up everything from entry to reconciliation.
4. Integration – Most bookkeeping software integrates seamlessly with other automation apps.
5. Consistency – Accounting software completes each task the same way every time, eliminating the chance of error.
If you’re currently using Excel or spreadsheets for accounting and could relate to any of the above scenarios, it’s time to make the switch.
Zeni’s AI-powered software is a great place to start!
Our team specializes in working with early-stage startups, many of which have found that moving over to account software saves them time, money, and stress.
For example, Zeni gives founders instant access to all of their startup’s financial information and transactions. Our AI keeps your financial reports (like your balance sheet and cash flow report) up to date in real-time — no math, formulas, or hours of data input involved.
We even help support your growing business by making the switch to a paid platform less jarring on your budget, unlike utilizing costly in-house bookkeepers or accounting firms. Hiring an entire finance team can cost upwards of $500K annually! That’s why we charge based on your company’s expenses instead of a flat or hourly rate.
Check out what your rate would be on our slider.
Let a team of experienced accounting professionals tackle all of your accounting needs and give you back the time you’ve been sacrificing by using spreadsheets. Book a demo below!