Why are Bookkeeping Programs important for Startups?

What are the functions of Bookkeeping Programs?

  • Bookkeeping Programs are vital to managing the financial aspects of your startup or new venture.

  • With one data entry, you can create a number of different documents, and link them with each other. Old methods of spreadsheets or journals and ledgers are slow and time-consuming. All the calculations are pre-programmed in the software, you will just have to enter the data.

  • Searching for records is easy with accounting software. There will be a tracking ID for each transaction. With that ID, you can retrieve any document related to that ID.

  • There are different levels of controls and security in bookkeeping software. An employee can be authorized to log into certain areas, while restricting him/her from retrieving information from other areas. You might set it so that few people can enter the data and change it, while others have only the authority to see the data, but can’t change it.

  • The software has an inherent audit system. This means it can help you to locate how a mistake was made.

  • Analysis becomes easy. You can quickly see many key details; such as did your business make a profit last month.

These are the basic functions of bookkeeping programs; more expensive systems offer many more features.

Tips to choosing bookkeeping programs

  • Make a list of features which you want in your Bookkeeping Program. There are many accounting software systems available. Short-list those which fit your budget and requirements.

  • Determine whether the software provides cloud storage and/or local storage. Do you need remote Internet access? What types of backup are required?

  • Mobile access is one factor to consider. Through this, you can connect to your system with your phone or tablet.

  • How will the software be updated? How do you pay for that?

  • Speak with your fellow startup CEOs about their experience with Bookkeeping Programs. Find out what software similar firms are using for accounting.

Setting Up

  • Use an accountant (a CPA in the USA) to help you set up your chart of accounts, make the first data entries and train your bookkeeper.

  • Most probably you will not need a full time CFO for at least the first year of your business. However using an Interim CFO to talk through your situation once per quarter is good practice.

  • Startups that will raise money from investors must have their financial books audited on an annual basis.

References

 

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