4 key finance and operations tech tools your company needs to get off the ground
While Lola.com’s team has been expanding rapidly over the last few months, it hasn’t been long since we were in our startup phase. I may be relatively new to team Lola, but I’m no stranger to the challenges that finance teams face at startups.
Spreadsheets are an affordable and flexible tool for getting your finance department off the ground. However, when business picks up, you need specialized tools that can automate and/or streamline repetitive tasks for your team. The last thing your finance department needs is clunky processes that prevent the company from scaling when there is an influx of new business, team members, or funding.
Whether your finance department consists of one person or several, the tech tools you implement today can set your company up for growth tomorrow. But which finance tech tools do you actually need in the startup phase, and which ones will suck your resources without giving you an ROI? I’m sharing the four tools every startup CFO needs to implement in order to automate tasks and scale the business.
4 essential tools your finance department needs to get off the ground
I’m giving you the scoop on what these essential tools are, what they do, and why your startup needs them. I also include several examples of software in each category to help you get started.
1. Accounting software
What does accounting software do?
Accounting software can automate a variety of accounting and bookkeeping tasks including keeping track of accounts payable and accounts receivable, creating expense reports, generating profit and loss statements, and preparing other financial statements.
Why your startup needs accounting software
Yes, you could do bookkeeping and generate financial statements in Excel, but accounting software exists to automate repetitive financial reporting tasks so that your team can spend less time on them. It’s crucial for your finance team to automate processes as early on as possible to facilitate scalable growth for your startup.
What could your team accomplish in the time that they would usually spend on accounting tasks?
Examples of accounting software: Quickbooks, Netsuite, FreshBooks, Zoho
2. Payroll software
What does payroll software do?
Payroll software tracks employee time and attendance, compensates employees on pay day, automates tax withholding for employees, improves compliance, and generates tax forms.
Why your startup needs payroll software
Your startup-sized finance team has better things to do than to learn payroll compliance laws. With payroll software, compliance is taken care of, so you can focus on projects that move the needle forward.
Automated payroll also ensures that employees get paid on time. Employees who don’t get paid on payday won’t be happy, and will be less productive.
Additionally, payroll software is stored in the cloud, so several members of your team can view payroll reports at the same time. This method is much more expedient than having to email spreadsheets back and forth to collaborate.
Examples of payroll software: Gusto, Namely, ADP
3. Billing software
What does billing software do?
Billing software helps your finance team invoice clients, accept payments, and send receipts. Most billing software integrates with accounting software to track and automatically reconcile transactions.
Why your startup needs billing software
As the CFO of a startup, you likely do everything you can to cut down on unnecessary costs like payment processing fees. You might do this by asking your customers to fulfill invoices via check, instead of using payment methods that come with fees. As the company grows, however, you won’t be able to afford to wait weeks for checks to arrive, or to have someone take the time to process them, so you’ll have to bite the bullet and adopt billing software.
Most billing software offers enterprise customers lower processing fees when they reach a certain volume of transactions. Billing software grows with your company and automates payment processing so that your finance team is free to focus on other important tasks.
Examples of billing software: Quickbooks, Bill.com, Chargebee
4. Customer payment processing software
What does customer payment processing software do?
Customer payment processing software accepts payments in-person and online from your customers via credit cards, bank transfers, and other methods. You can even use it to set up subscriptions or recurring payments, which is convenient for e-commerce or SaaS companies.
Why your startup needs customer payment processing software
You can’t run a modern business without accepting payments online. Customer payment processing software helps you get paid faster than old school payment methods.
Examples of customer payment processing software: Stripe, Recurly, PayPal
While your finance team may have started with Excel, it will need to add more specialized tools to its tech stack to automate processes that will take the company to the next level. Invest in payroll, accounting, billing, and payment processing software to set up your startup for scalable growth. The investment early on pays off in multiple ways.
Rebecca Morrison is VP of Finance and Operations at Lola.com, the Agile Travel Management™ company that provides a super simple way to manage, book, and report on business travel. She oversees financial reporting and analysis, forecasting, and budget management.