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5 Tech Tools Every Startup Should Use for Financial Management

kokou adzo

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When it comes to money, there are many things to keep track of as a small business owner. You need financial management tools to ensure you’re making enough money and not forgetting anything. With the right tools, you can save time and money and make better financial decisions for your business.

How To Choose the Right Tools for Your Startup

As a small business owner, you would probably want something free to help you with operations. While you can get free credit monitoring and other apps to manage your finances, most require some outlay. The strategy is to find just one or two paid ones you can afford and run with it.

The following factors ensure the tool will satisfy your current and future needs as your business grows:

  • Ease of use: Look for user-friendly software that’s easy to set up and use. It should allow you to map your processes to manage your finances without hassles.
  • Scalability: Choose software that will handle more users, track new expenses, and manage complex finances as your business expands
  • Integration capabilities: Ensure your software seamlessly integrates with your existing accounting and project management tools to maintain financial consistency.
  • Financial reporting and analytics: Choose software that offers detailed reports, customizable dashboards, and data visualization tools to identify trends and analyze expenses.
  • Security and compliance: Check if the software follows data security industry standards and complies with regulations to protect sensitive financial information.

Essential Financial Management Tools

Most financial management tools offer two or more functionalities; some do it all. However, they typically do one thing very well. Here are five financial management tools that every startup should consider:

1. Budgeting software

A budget is one of the most essential things for any business, large or small. Small companies typically work with tight budgets and limited resources, making every financial decision mission-critical. Conventional budgeting methods help but could be more efficient, flexible, and less prone to errors.

A business budgeting tool will give you insights into cutting unnecessary spending and reaching profitability faster. You can create a budget to determine the sales volume to break even, the reserves you need, and whether you must hire more people. It’s also helpful for setting financial goals and seeing how well you meet them.

You can check out FreshBooks for this purpose. It can help startups and small businesses create a budget and stick to it. It also connects your bank account or credit card to track your expenses.

FreshBooks has tools for businesses at all stages, including startups and freelancers. It allows you to collaborate and share files and updates with your team, clients, and contractors in one place. 

It integrates with over 100 apps, including HubSpot, GSuite, Dropbox, and Stripe. The service has business pricing tiers starting at $30 monthly. You can try any of them for 30 days and cancel anytime without providing credit card information.

2. Accounts receivable software

You must have a good accounts receivable system if you sell on credit. This system will help you track who owes you, how much they owe, and when the payments are due. A good accounts receivable system can help avoid late payments and collections problems.

FreshBooks can also do this, but you can try Zoho Book, a cloud-based accounting platform for, among other things, invoicing. Exceptional features include personalized reminders and customer communications, simplified vendor and customer portals, and inventory management.

It’s designed to be an all-in-one platform that competes with QuickBooks and Sage Intacct. It is user-friendly even for non-accountants and integrates with many third-party apps and tools like PayPal. You can use it free or subscribe for a 14-day trial to paid plans.

3. Accounts payable software

Just as important as keeping track of who owes you money is keeping track of who you owe money to. An accounts payable (AP) system will help you keep track of your bills so you know how much you must pay and when. Aside from the goodwill you foster among your suppliers and vendors, a sound AP system can help prevent late payments and fees.

Xero is an accounting software platform for SMBs and personal finance. Its features include invoicing with quotes, bank reconciliation, purchase order and expense management, and tax management. It is mobile-accessible and integrates with over 800 third-party applications. You can “buy” the Early plan for $6 monthly for four months, then $15 after. Xero offers a 30-day trial.

4. Bookkeeping software

A sound bookkeeping system is essential for any business but vital for startups. That’s because a bookkeeping system will help you track your income and expenses to see how your business is performing. It will also help you prepare your financial statements, which are essential for tax purposes and getting loans or investment capital.

You can try Bookkeeper360 for 14 days. The paid plans are pricey but include useful prebuilt dashboards that provide a snapshot of your business. You can see how much wiggle room you have in your accounts, know what you spend periodically, and much more. Building out this level of reporting on your own would be difficult, but this tool makes it easy to get a system in place for the long haul. It integrates with QuickBooks or Xero.

5. Financial planning software

Finally, sound financial planning software can be a valuable tool for startups. They can help you develop a budget, monitor your income and expenses, and create financial projections for your business. Good tech tools can help you make better financial decisions for your business.

Wave offers a range of features that enable users to search transactions, generate accounting reports, and reconcile data across other Wave products. You can enjoy automatic sales tax calculations, customize payment terms, and gain access to easily understandable cash flow insights. The platform also features a well-organized dashboard with individual tabs for sales, purchases, accounting, banking, payroll, and reports, ensuring a clean and clutter-free user experience.

Before committing to accounting software, shopping around and comparing your options is best. Wave Accounting is free to use forever. It allows you to manage all your accounting processes without paying anything. It’s also user-friendly, so even non-accountants can use it successfully.

Financial Tech Tools Are Essential

Leveraging the right financial management tools is crucial for the growth and sustainability of startups. By selecting tools that offer ease of use, scalability, integration capabilities, comprehensive financial reporting, and robust security measures, startups can streamline their financial operations and focus on their core business strategies. 

These tech tools provide a solid foundation for managing your startup’s financial health. Embracing these tools will aid in making informed financial decisions and achieving long-term success and stability in the competitive business landscape.

Kokou Adzo is the editor and author of Startup.info. He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at Startup.info.

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