Best Accounting Software for Startups

Accounting is simply made easier with the right software—especially for startups. A comprehensive accounting software helps startups with accurate financial projections, streamlines efficiency, and helps them stay compliant with taxes and other industry regulations.

Startups are often saddled with tight budgets and employees who may not have the expertise desired in accounting or CFO roles. That said, there’s also the need for startups to have accurate financial projects so they can raise the necessary funding and scale. Again, the right accounting software solution can help.

In this post, we’ll cover why startups benefit from specialized startup accounting software, some of the top accounting solutions for startups to date, how to select the right solution for your startup and more. Read on to learn more or contact Graphite Financial today for more information.

Why Startups Need Specialized Accounting Software

Why do startups need specialized accounting software? Not only can the right solution streamline efficiencies and prevent errors, but it can also help fill in the knowledge gaps that some of your employees may have when it comes to managing the finances of your early operation.

Startups require a significant deal of flexibility. The right solution can automate certain financial practices, accurately manage cash flow and provide robust real-time reporting—all aspects of a startup that are important to its current model and attracting investors so it can continue to increase financial transactions and grow.

Compared to traditional spreadsheets, accounting software significantly reduces the risk of errors, automates repetitive tasks, and provides a clearer financial picture to support decision-making.

In a nutshell, the key benefits a startup can gain from using specialized accounting software include:

• Flexibility
• Automation
• Robust financial reporting
• Ability to scale

Key Features to Look for in Accounting Software for Startups

If you are looking for the best startup accounting software, there are various features that you’ll want to prioritize when making your selection. They include:

• User-friendliness: Remember, your employees in the early days of your operation are likely not financial experts. The easier a solution is for them to use, the better.
• Integration with other tools: Look for software programs that can easily integrate with CRMs, payroll and existing banking and accounting systems.
• Scalability: Any program you select should be able to grow as your startup grows.

Top Accounting Software Solutions for Startups in 2024

Now that you know what features to look for in accounting software for your startup, it’s time to explore the available solutions. Here’s an overview of the accounting software solutions that we recommend for startups:

QuickBooks Online

QuickBooks is arguably the leading name in accounting software. QuickBooks Online is a cloud-based program that helps startups manage all of their financial needs. It can automate tasks, connect and integrate with other applications, create robust financial reports and even help with inventory management. Because it’s cloud-based, it can be accessed by users anywhere there’s an internet connection.

Additionally, QuickBooks Online is fairly flexible in terms of accounting tools and comes with various pricing tiers so you can start with what you need and continuously upgrade as it suits your startup.

Rillet

Rillet is an ideal software solution thanks to its curated dashboards that allow you to track multiple metrics and compare your performance over time and with other industry peers. It’s also ideal for creating reports for investors and automating various aspects of financial reporting. It’s an ideal solution for SaaS startups, as it can easily automate revenue recognition, prepaids, cash reconciliation and more. Rillet is also known for its user-friendliness.

Xero

Another program known for its ease of use, Xero is particularly well suited for smaller startups. A cloud based accounting software, some of the key features of Xero include automation, centralized record-keeping, robust reporting capabilities and a mobile app to easily access the program when you’re on the go. Another nice thing about Xero is that you can try it before you buy it. Xero offers a 30-day free trial so users can experience it first.

NetSuite

NetSuite is an ideal accounting program for startups that are doing business internationally thanks to its multi-currency support. Some other key benefits of NetSuite include advanced accounting features, including project management, inventory management and CRM. NetSuite is another solution that offers a variety of pricing tiers, allowing startups to start at a lower level and upgrade as their operations require more advanced accounting features.

Challenges Faced by Startups When Choosing Accounting Software

Selecting accounting software for your startup isn’t always as easy as it may initially seem. Some of the common challenges that startups face when making their selections include:

• Budget constraints
• Limited accounting expertise
• A desire for solutions with enhanced automation features
• Selecting a solution with the right types of features for your startup’s financial health

How to Choose the Right Accounting Software for Your Startup

Noting some of the common pain points that startups face, there’s a series of steps you should take to select the right accounting software for your startup. Here’s a look:

1. Assess your startup’s specific needs so you know what features you’re looking for in a solution.
2. If possible, test before buying. Some programs, like Xero, offer free trials so users can get a true feel for the software and its functionality before investing in it. Even programs that don’t offer free trials usually allow for some sort of demo. Take advantage of these opportunities.
3. Think of the long haul. As a startup, you’re in things for the long run. That said, make sure you’re selecting a solution that’s designed to meet your needs in the present and the future.

Integration Opportunities for Your Startup’s Tech Stack

Integration with your startup’s other business tools is key for improving functionality, streamlining efficiency, complying with regulatory requirements, improving collaboration and having access to a wealth of financial data in a central hub.

Look for programs that can easily integrate with CRMs and payroll systems. API capabilities with financial tools such as Brex and Ramp are a plus too. The ability to integrate with such tools and provide real-time insights is key to providing a snapshot into your startup as it stands in the here and now. This real-time synchronization can also help reduce errors.

Set Your Startup Up for Financial Success

Selecting the right accounting software isn’t as cut and dry as it may initially seem – and it’s important to make an informed decision on your solution that can help your startup in the present day and into the future. You really can’t downplay the importance of the right solution when it comes to streamlining operations and ensuring scalability. Look for programs that incorporate automation and integration with other business programs to further help save time and enhance efficiency so you and your employees can spend more time working on growing your startup.

Explore Graphite Financial’s Startup Accounting Services

For more information on the best accounting software for startups and startup accounting and bookkeeping services, contact Graphite today. As a leading startup accounting services firm, we specialize in tailoring unique solutions specific to the startups that we work with. We have a depth of knowledge across many markets and industries and are standing by to lend our expertise in supporting your startup’s finances. Contact us today for more information and to schedule a free consultation.

FAQs

What is the best accounting software for early-stage startups?

While there are many accounting software options that early-stage startups can select from, the best accounting software tends to be the one that’s user-friendly, scalable and can easily integrate with other business tools. There are several options that startups may elect to choose from for this.

How do I choose between QuickBooks and Xero for my startup?

Xero tends to be ideal for smaller startups, while QuickBooks is popular for all types of startup sizes. Do your homework on each solution and carefully assess its unique features to determine which option would work best for you. What’s nice about Xero is that it comes with a free 30-day trial to help you determine if it’s the right solution for your startup.

Can free accounting software like Wave handle my startup’s needs?

Free online accounting software can be ideal for basic needs, but it’s not likely to meet your needs as your startup grows and scales.

What integrations should I look for in accounting software?

Look for integration with CRM tools, payroll, banking platforms linked to your business bank account, and other financial tools.

When should I switch from QuickBooks to NetSuite?

One of the biggest benefits of NetSuite is that it’s ideal for international startups due to its multi-currency support. So while some startups may never need to switch from QuickBooks, those that eventually go global and have more complex accounting needs may benefit from moving to NetSuite to support their operations.

How can accounting software improve my startup’s cash flow management?

Accounting software can play a significant role in streamlining cash flow management. One of the ways it can do this is by automating invoice creation and distribution. It can also achieve this through accurate payment and expense tracking, and with robust financial reporting features.