There are a lot of statistics around about start up business failures. Nobody starting a new business wants theirs to be one of the failures.What can you do to help your start up business survive?
I read an interesting article in a business magazine a couple of weeks ago, which stated that “4 out of 5 new start ups fail within the first three years, 4 out of 5 who use a computerised accounting system survive.” I can’t prove that astonishing statistic, but there is a clear message there for new businesses.
If you don’t look after your finances,
then your business is much more likely to fail
One really good way to make sure that you are paying enough attention to your finances is to invest in accounting software.
Why get accounting software?
If you enter all of your income and expenses into accounting software, it means you are able to keep track of how much money you have. If you know how much money you have, you can make sure that you don’t run out!
Accounting software can help you to understand what you are spending your money on, which product lines are more profitable, and which business ideas are draining your money away.
What to look at when choosing your accounting software
There is a huge amount of choice out there. How do you figure out what accounting software is best for you?
- What do you need it to do for you?
- Will it still be appropriate when your business grows?
- Is it compatible with what you are currently using? Or with what your accountant uses?
- How much does it cost?
- Do you want online software?
What do you need it to do for you
Analyse your business needs. Are you a products business that needs help with tracking inventory? Do you want it to create your invoices? Do you need payroll functionality?
Will it still be appropriate when your business grows
Does the software have optional add-ons which you can get when your business needs them? Are you able to add extra users? Is there a limit to the number of transactions you can process? Can the software do multi currency if you are planning to expand internationally?
Is it compatible
If you’ve been tracking your income and expenses in an excel spreadsheet or in different software does it support uploading them? Does your accountant use a particular package that would be suitable for you – and maybe save you money off your accounting fees?
How much does it cost
You can get some basic free packages, or pay literally millions of pounds for one. You will likely need something in between. Make sure you shop around to find one that suits your business without breaking the bank.
Do you want online software
This subject deserves a whole blog post of its own. There are a lot of companies that now provide online accounting software, which you (and your accountant) can access from anywhere. Some of the functionality is excellent (such as linking with your bank account), but you can sometimes find online packages are slower to use. You usually then pay a monthly fee instead of having an upfront cost, which could help if initial cashflow is tight.
Make sure you keep it up to date! Paying for accounting software won’t do you any good if you don’t use it.