Accounting for startups
Small Business Guides
6 min read
If you’re in a startup, it can be an exciting world of creativity and innovation. But while it’s great to do something you love, you also need to make a living. So how can you live the dream and ensure your cashflow is well managed?
Startup accounting tips
In this article, a representative from third-party Pinterest marketing solution Shareroot talks to us about their tips for being a successful online marketing product. Find out how they use online technology to control their cashflow and make better business decisions.
Noah Abelson, CEO and co-founder of Shareroot
Q: How do you use software to understand the financial health of your business?
We changed from Excel to cloud software so we could see the latest figures and take advantage of the benefits of the cloud. We make the most of the robust reporting tools within the software. We log in to our accounting software online and it’s super useful to be able to see uploaded receipts, expense claims and bank account and credit card statements.
Q: As a complete third-party Pinterest marketing solution, what’s Shareroot’s number one Pinterest tip for small businesses?
Always be unique and express your company’s personality. Don’t be afraid to be who you are. We encourage a brand to have some fun with what they do and really be individual to stand out. We would also recommend not spending time and especially money on a campaign if you’re not going to see the return on investment for it. Plan your goals and map out exactly what you want to achieve.
Q: What's a good tip for a first-timer in the tech startup space in terms of managing finances?
Move to cloud software sooner rather than later. You just can’t grow if you don’t move to something robust that can handle growing with you. We’ve been adding staff and new accounts and with that comes more complexity. Excel won’t handle growth or complexities like a strong online platform. When you make the move early it will save you so much work in the long run!
Move to cloud software sooner rather than later.
Q: What add-on cloud apps do you use to complement your accounting software?
We use Zen Payroll and it integrates with our accounting software. The reality is, there’s so much value in these cloud apps – and the real cherry on top is that it’s enabling us to do so much more.
Q: How has the software saved you money on the accounting side of things?
Startups have to keep a close eye on budget – and in our case, we wanted a CFO but couldn’t afford a full time one. Because we use cloud software, we were able to hire a part-time CFO to work remotely. This is a fraction of the cost that a full time one would have been. The CFO can take a look at the accounts online, from wherever he/she is. I can leave him/her a note in the software and he/she can get back to me instantly. It saves me so much time and we can get really valuable advice that helps us make good business decisions quickly.
Q: How does the software help you achieve long term goals?
The fantastic thing about our accounting software is that it is very user friendly. One of the great things about ShareRoot is that we are a team full of individuals who are all able to handle any task that comes up. Our long term goal is to continue to grow our business with such individuals. Our accounting software allows us to do this efficiently and without having to spend money on someone having to come in full time and solely be in charge of handling our finances.
How does the software help give an accurate idea of expenses versus income?
Our software is able to provide an accurate idea of expenses versus income because the system is easy to read and makes it easy to input our information. Once we are able to plug our numbers in, it becomes very simple for us to see how we are doing with our expenses as well as what we are bringing in.
Q: What are the ways you know you’re hitting your targets?
We are able to determine whether we are hitting our revenue targets because we are able to take a look and plan out what we need to be putting into the system in order to keep growing and thriving. By being able to plot out what our overhead costs are month to month, we are able to determine what numbers we need to hit in order to achieve the growth that we are looking for.
Q: How do you use the software to secure additional funding?
Because the software is easy to use and understand, we are able to provide financial data to potential investors that's clear and easy to read. Because we are also able to financially plan out our models going forward, we are able to provide this information to investors who are looking to for a stable and profitable business to invest in.
Q: How does the software help you plan ahead?
Due to our accounting solution having an easy-to-use interface, we are able to plot out what expenses we will have for the foreseeable future. We can plan what kind of revenue we need to generate in order to ensure that we continue to grow. Because of this, we have been able to set concrete goals in which we have not only been successful in achieving, but have been exceeding!
Q: It’s common for entrepreneurs to often not be well versed in the world of accounting. How does easy-to-use software make this a less scary experience?
The software that we have allows us at ShareRoot to focus on what we do best, without having to spend additional hours working away at our finances and struggling to make everything come together. We are able to put more energy into our work – and because of this are seeing our growth occur at a rate that we've never seen before.
Q: What are the ways that businesses can benefit from Pinterest marketing?
Pinterest brings out the DIY and interest sharing in all of us. As a small business you can benefit from Pinterest marketing by showcasing not only what you have to offer as a business, but also a glance into the culture of your business and what your values are. For instance, at ShareRoot one of our Pinterest boards touches on what brands can do to help market themselves on Pinterest. We also have boards ranging from fashion to travel to a board that includes images of our team around the office.
We believe that if your business can connect emotionally to Pinterest users, you will find that you will not only see these people purchasing your products, but also becoming advocates of your business. Finally, Pinterest allows for pins to have specific URLs. This means that if you are a company that sells products online, you can pin images of your items that can be linked to your online store where Pinterest users can purchase your inventory. And this is only one click removed from the site! How amazing is that?
When it comes to accounting for startups, it pays to use software that’s as adaptable as you are. Just like Shareroot, make sure your startup is doing all it can to stay lean and competitive. When your business can be nimble and take advantage of time-saving business tools like cloud accounting software, it’s more likely to be around long term.