Best Accounting Software from Pre-Seed to Series B+

In this article, we'll cover essentials like Xero and QuickBooks for early stages and introduce advanced options like Sage Intacct and Netsuite for Series A and beyond. Additionally, we'll discuss useful add-ons like Telleroo and Dext that enhance financial management as your startup grows.

Introduction

As your startup evolves, so do your accounting needs. From tracking expenses and managing payroll in the early stages to handling more complex financial reporting as you scale, selecting the right accounting software can make all the difference. This guide covers the best accounting software options for startups, from pre-seed to Series B+ and beyond. We’ll also highlight key add-on tools that can streamline your financial processes.

Pre-Seed and Seed Stages: Getting Started with Xero and QuickBooks

At the pre-seed and seed stages, simplicity and ease of use are key. Startups need accounting software that offers essential features like invoicing, expense tracking, and basic financial reporting. Xero and QuickBooks are two excellent choices for early-stage companies.

Xero

Xero is a cloud-based accounting software known for its user-friendly interface and comprehensive features. It offers:

• Invoicing and Quotes: Create professional invoices and track payments.
• Expense Tracking: Easily track and categorise expenses.
• Bank Reconciliation: Link your bank accounts for seamless reconciliation.
• Payroll: Manage payroll for a small team.

Why Choose Xero? Xero’s intuitive design and robust customer support make it an ideal choice for startups with limited accounting experience. It also integrates well with other business tools, offering scalability as your company grows.

QuickBooks

QuickBooks is another popular choice, especially among small businesses. It provides:

• Invoicing: Generate invoices and receive payments.
• Expense Management: Track expenses and categorise them for tax purposes.
• Cash Flow Management: Get a clear view of your cash flow with real-time dashboards.
• Reporting: Generate financial reports to understand your business’s performance.

Why Choose QuickBooks? QuickBooks offers a range of plans, from basic to advanced, making it flexible for growing businesses. It’s particularly strong in financial reporting and tax preparation, helping startups stay compliant.

• Actionable Tips:
  • Start with the basic plans of Xero or QuickBooks to manage your finances efficiently.
  • Utilise the free trials offered by both platforms to determine which one best suits your needs.

Add-On Software for Xero and Quickbooks for Enhanced Financial Management

As your startup grows, additional software can enhance your accounting processes. Tools like Telleroo and Dext are valuable add-ons that can streamline specific aspects of financial management.

Telleroo

Telleroo is a payment solution that simplifies batch payments. It’s particularly useful for managing payroll and supplier payments.

• Batch Payments: Easily pay multiple suppliers or employees at once.
• Integration: Integrates with accounting software like Xero for seamless payment processing.

Why Use Telleroo? Telleroo saves time on manual payment processes and reduces the risk of errors, making it a valuable tool for finance teams.

Dext (Formerly Receipt Bank)

Dext is a receipt and expense management tool that automates the process of capturing and processing receipts.

• Receipt Capture: Easily capture receipts via smartphone and upload them to the cloud.
• Data Extraction: Automatically extracts and categorises data from receipts.
• Integration: Syncs with accounting software like Xero and QuickBooks.

Why Use Dext? Dext simplifies expense tracking and ensures accurate data entry, reducing the workload on your finance team.

• Actionable Tips:
  • Use Telleroo to automate and streamline payroll and supplier payments.
  • Implement Dext to manage receipts and expenses more efficiently, especially as your volume of transactions increases.

Series A and Beyond: Financial Management with Sage Intacct & Netsuite

As startups grow and reach Series A, B, and beyond, the consideration for more advanced accounting and financial management solutions becomes apparent.

This might not be for you if you are below £5m in revenue, but if you are moving towards £10m or above, and you are scaling fast by expanding overseas or have set up multiple operations, you’ll soon have a need to consolidate your financial information.

Sage Intacct and NetSuite are two strong options that cater to these advanced needs. Note that these systems would be a step up from Xero or Quickbooks, and one thing to factor in is the cost of these platforms as well as getting expertise to assist with the migration.

Sage Intacct

Sage Intacct is a comprehensive cloud-based financial management solution designed for growing companies. It offers a wide range of features tailored to meet the needs of more complex financial environments.

• Comprehensive Financial Management: Sage Intacct offers a full suite of financial tools, including accounts receivable, accounts payable, tax management, and more. It provides a unified view of financial data, helping businesses make informed decisions.
• Advanced Financial Reporting: Sage Intacct provides customisable financial reports that offer deep insights into various aspects of your business. This is particularly useful for startups needing to provide detailed reports to investors and stakeholders.
• Multi-Entity and Multi-Currency Support: Ideal for startups operating in multiple jurisdictions or with plans for international expansion, Sage Intacct simplifies the management of different entities and currencies.
• Automated Revenue Recognition: Helps manage complex revenue streams in compliance with accounting standards, making it easier to track and report earnings.
• Project Accounting: Tracks the financial performance of projects, providing detailed insights into costs and profitability.

Why Choose Sage Intacct?
Sage Intacct is well-suited for startups that require advanced financial management capabilities. Its strong focus on financial reporting, automation, and compliance makes it an excellent choice for companies looking to streamline complex financial processes.

• Actionable Tips:
  • Consider Sage Intacct if your startup requires detailed financial reporting and multi-entity management.
  • Leverage the platform's automation features to reduce manual work and improve accuracy in financial reporting.

NetSuite

NetSuite is a robust ERP (Enterprise Resource Planning) system that integrates a wide range of business management functionalities. It is particularly useful for startups experiencing rapid growth and needing a scalable solution to manage various aspects of their operations.

• CRM Integration: NetSuite includes built-in CRM capabilities, enabling startups to manage customer relationships and sales processes within the same platform.
• Inventory and Order Management: Provides robust inventory management features, making it ideal for startups with product-based models. It helps streamline order processing, procurement, and fulfilment.
• Business Intelligence and Analytics: NetSuite's advanced analytics tools provide real-time data and insights, allowing startups to monitor performance metrics and make data-driven decisions.

Why Choose NetSuite?
NetSuite is an all-in-one solution that caters to a broad range of business needs. It is particularly beneficial for scale-ups that require integration across multiple business functions, such as finance, sales, and inventory management. Its scalability and comprehensive feature set make it a strong choice for companies planning to expand significantly.

• Actionable Tips:
  • Opt for NetSuite if your startup needs a unified system that integrates financial management with other business processes.
  • Utilise NetSuite's customizable dashboards to gain real-time insights into key performance indicators and streamline decision-making.

Preparing for a migration to Sage Intacct, or Netsuite

Think of the migration as a project that could be from 2 to 4 months depending on the volume of data, much like a software development project you’ll go through stages of planning the requirements, build, and testing, before ‘go-live’.

Some areas to think about:

The reports - P&L, Balance Sheet, Cashflow are all essentials. If you track by department / geography this can be built into the migration plan to provide multi-dimensional reporting.

CFO dashboards - every executive needs high level metrics, you can assess by entity and as a combined group of companies. You can build in your unit economics such as ARR, LTV, CAC, Churn etc.

Bank accounts - All global bank accounts are to be connected and previous transactions coded and reconciled so the reports are complete.

Accounts payable - Your suppliers will be imported including payment terms.

Chart of accounts - You’ll now create a Global chart of accounts to standardise account codes across all your entities.

Conclusion

Choosing the right accounting software is crucial at every stage of your startup's growth. Starting with user-friendly tools like Xero and QuickBooks at the early stages and transitioning to more advanced solutions like Sage Intacct or Netsuite as you scale can help manage your financial operations effectively. By selecting the appropriate tools for your startup’s needs, you can be on top of your financial management and focus on growth.