Tips for Early-Stage Start-ups: Article 1 – Software Solutions
Authored by: Kristin Kenney, CPA, Wipfli LLP
Running an early-stage startup company takes a tremendous amount of courage and know-how… or rather “I’ll figure it out”- how. That is where courage plays in. Often, the founder or founders of such companies are running themselves ragged to turn their dreams into reality. It is awe-inspiring to watch!
This article is the first of a series of articles that will cover various tips for founders of start-up companies to be aware of to get their company off to a good start and avoid adding unnecessary hassle and stress to their already complex endeavor. These articles can also be used as a guide to know when to pull in outside assistance to fill knowledge gaps so founders can focus on the important things, like refining their product offerings, pitching to investors, building their brand, and reaching their target market.
This first article will discuss SYSTEMS:
- Level 1: Early on, many start-up companies will use manual, excel-based spreadsheets to track their finances. However, often, using this method does not provide stable tracking and reporting capabilities that companies need. As a result, it is recommended that companies of all levels, even start-up companies, invest in an accounting software. There are several low-cost software options available in the marketplace that will improve a company’s reporting capabilities, documentation, and reconciliations. Some software solutions even have AI (Artificial Intelligence) built into them that can help a company automate certain processes. Some of these software options provide students with a free subscription for a year, allowing students time to get their ideas off the ground before having to pay for the software solution!
- Level 2: After investing in an accounting software solution, the next step would be to connect that accounting software solution with the other software utilized by the company, to the extent that doing so makes sense. This can include integrating the accounting system with inventory management systems, customer relationship management systems, online ordering systems, and other applications. Depending on the software solutions being integrated with one other, there can be “connectors” that have already been developed by others that can be purchased and installed to enable the flow of information between the various systems. On the other hand, some software may need to have these “connectors” specifically written. This is another thing to keep in mind as companies select the software options that they wish to utilize. Traditionally, the more that different software solutions can be integrated with one another, the less effort and duplication is required as information can be inputted into one software and then flow seamlessly to other software where the information is also utilized.
At this level, it is typically wise to consult with trusted advisors to understand best practices, unless the individual undertaking this task has extensive expertise in such integrations and significant knowledge of the various software involved. Individuals who undertake this process without the necessary knowledge and guidance risk spending significant company time and resources to not obtain the desired results. Sometimes, the cost to unravel and correct a faulty integration can be greater than that of the original planned integration, so these mistakes should be avoided through proper planning and information.
- Level 3: With some cash in the bank, the third and final step in the software journey is to upgrade the company’s software solution(s) to those that will provide it with more sophisticated capabilities and reporting functionality. This can include integrating the accounting, sales pipeline, inventory system, grant tracking software, etc. into one cohesive enterprise resource planning (ERP) system. With a solid business plan and knowledge of the product lifecycle, founders have a clear picture of what type of information is needed from their systems and what they need their systems to be able to do for them. It is recommended that prior to partaking in this journey that companies investigate multiple solutions and work with a systems expert to evaluate software options based on their “must haves” and “would be nice” features so that they can make a knowledgeable choice of the right software solution for them as each company is unique, and as a result, its needs are also unique. The cost of planning is cheaper than the cost of backtracking on a system that does not live up to expectations.
While the cost of implementing such a system can be high, in both time and money, companies can see great rewards of undertaking such a task, including reduced redundancies, enhanced efficiencies, and better visibility into detailed nuances of their business, all of which equip founders and management to better manage their businesses and respond to changing landscapes and trends.
Wipfli LLP is here to help!
Here at Wipfli, our consultants are aligned with nurturing companies at all stages of their maturity. Wipfli has a very robust technology consulting practice, including a team of software experts with significant industry experience, to help companies with all of their system needs. With program developers on staff, Wipfli can build and customize software to meet the needs and demands of each unique business. In addition to partnering with select, premier software companies like Sage, NetSuite, and Microsoft, Wipfli also has a strong software selection team, which helps companies evaluate their software needs and determine which software solution is the best option for them as well as determine how to get the most out of their software solutions.