Starting a small business today is so much different than it was in 2002 when I started my firm. Here are just a few of the differences:
• I had an actual office. You don’t need an actual office to start a business now.
• I had a fax the size of a Fiat.
• I had a Gateway computer with a single monitor and no applications were cloud-based.
That last one is a game-changer for small businesses today. My computer had all native installed applications whereas now there are very few applications installed directly onto a hard drive. You simply open Chrome or Safari and log into the application you need. The ease and availability of web-based applications and large players in the accounting/finance space make it difficult to pick and choose the right applications for your business.
What is an accounting system?
• An accounting system is designed to classify your company’s revenues and expenses so that you can review useful reports to make sense of your company’s health.
What an accounting system isn’t?
• Accounting is not a badly designed Google Sheet and a folder full of receipts. It might feel like accounting, but it’s not.
Here are some considerations as you think through your accounting system must-haves:
Cloud-based document storage:
• Our customers are big fans of the Google Suite applications for document creation and document storage.
• You can also check out ShareFile, Box, and Dropbox for cloud-based business document storage.
Cloud-based accounting system:
• Yes, you definitely need an accounting system, and in our opinion, cloud-based is the way to go. The cloud-based systems sync with your bank account, bring in your transactions in real-time, send out your invoices, and collect payments all in one place. If everything is done accurately, it makes your tax preparation process easier and you can send out 1099’s to your vendors with no problem.
• The biggest player in this space is Intuit with its QuickBooks Online application (this also happens to be the application we support in our firm).
• It goes without saying that you need business bank and business credit card accounts that are separate from your personal accounts.
Cloud-based accounts payable system:
• Gone are the days of writing checks. You need to utilize cloud-based payment system if you can’t charge everything to a business credit card.
• For business bill-pay, we like Melio. You can also choose to use your bank’s bill-pay system, but please keep in mind that if you plan to outsource your accounts payable function, the bank bill-pay can be cumbersome.
• As we mentioned above, make sure this system syncs to your accounting application. You shouldn’t have to re-enter the transactions into your accounting system.
Cloud-based document signatures:
• If you prepare proposals or contracts that require signatures, you need an application like DocuSign or Pandadoc. We have used both and they’re both very easy to use.
Being “in the cloud” isn’t a differentiator these days, it’s just table stakes. You need to make sure you are playing in the same sandbox as your colleagues and clients, and these are just a few ideas as you build your accounting and finance infrastructure. If your new small business needs assistance with building its infrastructure further, reach out to us and ask about our Start-Up Consulting engagements. We would love to assist you!