One of the fundamental ways to ensure a startup will thrive is to have a solid handle on your company’s financial information. Whether you’re a two-person team or you’re growing rapidly, the need for a clear monetary roadmap is essential. If you run a startup in the SaaS space, then you already likely know about the positives of using cloud based accounting software, as its benefits are probably comparable to the service you’re already developing. Yet if you happen to fall into another area of the tech world, you might be wondering why making a switch to a SaaS product would be beneficial for you.
The basic benefits of cloud based accounting are very straightforward, and whether you’re interested in utilizing this solution in your company or you’re creating SaaS accounting software of your own, you’ll find greater success if you keep the following information in mind.
Cloud-Based Accounting Software 101
Flashback a few decades for a moment and remember the time when any type of software had to be purchased and installed using a CD. For years, accounting products were sold and utilized in this way, making them have a very “one and done” type of appeal. Companies could purchase their preferred software, install it locally, and not have to worry about much else for a short period of time. In most cases, there were upgrades that you would have to pay for and receiving tech support often came with another separate price tag.
Since the development of SaaS as a whole, many of these factors have shifted and now, startups can utilize software in a different way. Cloud accounting has become a popular option due to the wide range of benefits it has over the software methods of years past.
What You Should Consider
Selecting the best cloud-based accounting software for your startup isn’t a decision to make lightly, and with the ever-growing list of products on today’s market, it’s something you’ll want to seriously think about. How do you know exactly which SaaS solution will meet your needs? Evaluate some of the following when making your decision:
- What is the initial cost involved in the purchase? Most cloud based accounting solutions function under a fee per month model, but you’ll want to explore if there are additional costs for upgrades or tech support.
- Is this software easy to use while being powerful enough to meet all of your needs? If you require payroll capabilities, inventory management, and more, will this one solution do it all in a format that doesn’t require a huge learning curve?
- Consider your needs now as well as what’s to come – you want your software to be able to grow with you as your company expands.
If you’re looking to be agile and low-friction, this needs to be a part of your strategy. There are a lot of options, but some standouts include QuickBooks Online, which airCFO prefers, and Xero, which we often recommend to our clients.
Why Opt For Cloud Accounting?
Even in the tech startup space, there can be a mindset of sticking with what you know and not wanting to reinvent the wheel when it comes to certain aspects of your business. If that resonates with you, you might wonder why opting for cloud based accounting would be a smart move. These are just a few of the benefits that companies can enjoy:
- On average, a startup could save up to 30% across a ten-year span by utilizing cloud based software. This includes factoring in a relatively low start-up cost, not having to purchase upgrades as they come out, and saving an immense amount of money by not needing your own in-house server.
- Most cloud based accounting software is scalable and can grow to meet your shifting needs. If you don’t have product inventory yet but will in the future, you won’t be stuck looking for new software once the time comes.
- The security of SaaS products as a whole can’t be beaten, and when it comes to valuable information like company financials, utilizing a cloud-based option just makes sense.
While we’ve briefly reviewed the accounting basics for you to consider, it’s important to remember that while you can always change the products you use down the line as your company expands, it’s often easiest to stick with one option that is flexible enough to meet your needs now and into the future.
If you’re in the SaaS startup space and are developing your own accounting solutions, keep the above points in mind when creating your product. By knowing what people are considering when making a purchase, you’ll be that much farther ahead of the game.
Others who are in need of their own cloud based accounting software may want to consult an experienced group for advice, and that’s where airCFO can help. We understand the accounting needs of startups and can guide you to the solutions that will best meet your company’s vision.