Many first-time founders struggle to find the right accounting software for their startups. It isn't just about tax compliance—it's about finding a tool that truly supports your financial management needs.
Your startup needs accounting software that integrates with your existing tools, offers robust features, and scales with you. It should be intuitive and easy to use, even for founders without an accounting background.
Your focus should be on building your company, not navigating a labyrinth of financial details.
How to choose the right accounting software as a startup?
Effective accounting software is crucial for your startup's growth and financial health. It's not about flashy features or generic solutions - it's about finding what works for your specific needs.
Here are five key questions to help you identify accounting software that will drive your business forward:
1. Do you plan to raise capital?
If the answer is yes, accrual accounting is non-negotiable for providing the financial reporting investors demand. Accrual accounting encompasses deferred revenue recognition, prepaid expense amortization, and fixed asset depreciation schedules.
QuickBooks, Xero, Bench, Digits, and Finta require manual work in external spreadsheets for revenue recognition and other accrual processes, making it expensive and time-consuming.
Puzzle provides fully automated accrual and cash accounting with user-friendly in-app revenue recognition. All schedules are simultaneously maintained within the platform, eliminating the need for external spreadsheets.
We help founders save up to 6 months of financial preparation time for fundraising. The integrated features ensure compliance with tax regulations and provide a complete picture of your financial health, all without the manual, slow processes associated with traditional accounting methods.
2. Is your business growing fast? Is your market changing quickly?
Founders need to monitor their finances frequently - ideally daily or weekly. This regular oversight allows for agile decision-making and effective financial planning.
Traditional accounting solutions like QuickBooks, and bookkeepers who rely on them, typically generate summary financial statements at the end of the month. They're giving you last month's news, not today's reality.
Fast-growing companies need real-time financial insights. Monthly statements don't cut it when markets shift daily.
Puzzle's accounting software is built for speed and scale. We keep pace with your rapid growth, giving you the data you need, when you need it. Because in today's market, yesterday's numbers are already old news.
3. How is your bookkeeper minimizing the risk for human error?
Automation and AI can significantly reduce accounting errors. Puzzle's accounting software leverages these technologies by automating accruals and using AI for language parsing and categorization.
While QuickBooks offers flexibility similar to a spreadsheet, this openness can lead to accidental mistakes. Puzzle, on the other hand, has a more structured approach. Transactions first go through our rules engine. Then, AI assists in categorizing transactions and suggesting appropriate categories.
AI is used solely for categorization after rule-based processing. By combining automation with targeted AI use, founders can get a more accurate, efficient accounting solution, reducing the risk of human error in the process.
4. What reports do you use to gauge your financial health?
When asking this question, startups typically want:
- High-level financial statements
- Key performance metrics
- Detailed transaction records
- Cash flow analysis
- Revenue stream breakdowns.
Puzzle's accounting software is the key to unlocking those insights. It lets you dive deep into your financials, from high-level statements and metrics all the way down to individual transactions. You can see who spent the money or which customer paid you. This level of detail is crucial for businesses to understand their financial health and key business drivers.
Puzzle makes it easy to track expenses, monitor cash flow, and analyze revenue streams. Plus, you get access to advanced features for financial management that'll make your life as a founder so much easier.
5. What are the best solutions for managing business finances?
Effective financial management is crucial for any business, especially startups. While outsourcing might seem tempting, it can increase risks of errors, unnecessary dilution, and complications during potential M&A processes. Inaccurate financial statements submitted to investors or the IRS can have serious consequences.
The best solutions for managing business finances typically include:
- Robust accounting software
- Real-time financial insights
- Automated expense tracking
- Integrated payroll management
- Accurate financial reporting tools.
Puzzle's accounting software offers all these features, allowing you to maintain control of your finances without the risks associated with complete outsourcing. It provides the tools you need to manage your money in-house, ensuring accuracy and reducing risks.
By using a comprehensive accounting software solution like Puzzle, you can effectively manage your business finances, make informed decisions, and focus on growing your company with confidence in your financial data.
Founders, try Puzzle today, for free!
