Good software can multiply your multitasking efforts!

The what, why, of when of productivity tools for growing your new company

I’ve been working with startups for over twenty years, advising them on all kinds of things from finance and accounting, to regulatory, to HR, and many other issues – even how to get more money! As a result I’ve seen first-hand what works and what doesn’t, especially from a productivity perspective.

I’m constantly being asked “what are the best software tools for my startup?” So I thought it might be good to write out my recommendations, and do so based on a company’s stage in their growth journey.

First, the basics. I recommend that, immediately after getting your first round -- or even before -- you purchase some basic software tools to help manage your funds and basic business operations. You will be growing after all, and you’ll need to keep on top of business things while developing and selling your cool new products! At a minimum, I suggest that you purchase an accounting software platform like QuickBooks Online, and at least four other finance-impacting software products: Bill.com; Expensify, Gusto, and Salesforce.com.

Note: I assume that your startup already has Excel or Google Sheets; you probably used one or the other to create your business case to pitch to investors. So I won’t talk too much about them other than to say that a spreadsheet is a very helpful tool not only for creating forecasts, etc., but also as a tool to transfer data between disparate systems. In my opinion – and I am sure that I will have detractors – Excel is a more mature program with better features for accounting and finance functions.

Part 1: Seed round to $5 million

1.      Accounting – QuickBooks Online

To manage and monitor your money you need a good accounting tool as the cornerstone of your business.

QuickBooks is affordable, has features that your startup needs, and integrates with many other tools like Bill.com, Expensify, and many others. It provides more add-on and third-party integration options—payroll, bill pay, expense tracking, bank accounts, credit card accounts, etc.—than QuickBooks Desktop.

While there are different versions, QuickBooks Desktop and QuickBooks Online (QBO), QBO is clearly the way to go. The Desktop version is hosted locally, so it’s pretty much a single-machine product, whereas the QuickBooks Online version is hosted in the cloud and is accessible from any computer, tablet, or smartphone with an Internet connection. As a result, it’s better suited for a remote working environment or collaboration with an outsourced bookkeeping solution.

QBO is known for its ease of use for founders and non-accounting professionals. You can very easily get snapshots of your financial positions – even if you’re not an accounting wiz.

There are four different QuickBooks Online plans Simple Start, Essentials, Plus, and Advanced. I usually recommend QBO Plus  as the best version for startups. It’s pretty reasonable at about $40 per month (as of June, 2022).

While QBO is a good, fundamental accounting system, it’s best used as a foundation for your financial processing, that other, more specialized tools, e.g., for bill paying, payroll, and other functions, tie into. Read on and you will see what I mean. 

2.      Bills, bills, bills… Bill.com

At this point in your company’s lifecycle you may not have a lot of revenue, but you will have bills. And while paying bills isn’t as fun as creating a cool new app or closing a million-dollar deal, it must get done. Or they send you nasty notes and put notices on your door. Fortunately there’s help.

As its name implies, bill.com helps you pay bills. It’s a simple, intuitive on-line accounts payable processing system that integrates nicely with QBO.

Why can’t I just use QBO to pay my bills?

While QBO can create checks, it won’t mail them for you. Bill.com does so electronically. And it also has an approval workflow, meaning that it can be set up to delineate who has the authority to pay which bills and at what dollar levels. For example, you can set it up so that only the CEO is authorized to pay for the $1 million VxBlock 1000 system that your ten person startup desperately needs. Kidding! (Just saying that you could…)

I pay all of my bills on-line, why do I need bill.com?

Think of bill.com as an aggregator where all of your bills, and their record of being paid (or not) are located in one place. This lets you not only easily pay and track your bills, but also see what you’ve paid and when, so you can see how you’re doing at a glance. My clients love it.

3.      Everyone hates expense reports. Solution: Expensify

Also as its name implies, Expensify is a system that helps employees fill out expense forms. Whether for trips or for credit cards or mileage for local trips and beyond, the Expensify software tool is a huge help to those of us – including me – who hate doing traditional expense reports. Their intuitive on-line interface totally simplifies the arduous tasks associated with expense reports. You simply take a photo of your receipt, and the system automatically captures and categorizes the details and stores them logically so that they can quickly be assembled into an expense report form. All you do is to double-check for accuracy, then sign and submit for approval.

Let’s say that you’re a founder and you want to attend the CES tradeshow in Las Vegas to find partners who will integrate your app with their consumer-based product. You arrive at the convention center in the morning and have a coffee and bagel. A quick snapshot with your mobile phone-based Expensify app puts that receipt into the system. Same with the lunch where you met with a prospective partner. And so on with dinner, drinks, etc.. When you return home several days later, all of your receipts, time stamped and neatly organized, are easily imported into your creatively-named CES 2023 Expense Report form, which you email to your boss for approval. Since you’re the founder you approve the report are then quickly reimbursed via electronic payment.

Super simple. 

4.      You gotta pay your people! Gusto.com

As its name does not imply, Gusto is a payroll processing software platform. Like the others, it’s designed for smaller companies, especially those who do not yet have a dedicated payroll person on their accounting team.

Why can’t I use QuickBooks for payroll?

In this case it’s a bit subjective. To me, Gusto is easier to use than QBO’s payroll service, and Gusto’s customer support is better – at least as of this writing. While the base systems cost about the same, QBO payroll charges extra fees for things like payroll for employees in multiple states (as many companies do these days).

Gusto also has some cool HR features that QBO doesn’t, such as a team directory and org charts, time off requests, online offer letters, secure document signing and more. For a few bucks more you can get add-ons that handle 529 college savings, life and disability insurance, and HSA and FSA spending accounts. This helps your small company attract some serious superstars, which helps you grow even faster.

5.      Track your customers. Track your sales. Salesforce.com

From what I’ve seen, the most successful startups are building their customer base at about the same rate as they’re building their products. They’re getting the word out, piquing interest, engaging prospects, and even collaborating with beta testers. All of which is too difficult to track in your head or on a spreadsheet. So you should invest in a customer resource manager (CRM) at a very early stage in your company’s growth. Salesforce.com  is the de facto standard in this regard and, surprisingly, it’s pretty cheap to get into.

There are also important legal/financial reasons for obtaining a CRM at or before you close your first deal. Regulatory compliance with ASC 606, for example, means that the sales contract that you create with your customer must match the accounting process that you use to fulfill that contract. A good CRM like Salesforce.com can help create the quote that then becomes the contract that then feeds into the accounting system, eg, QuickBooks, to facilitate and document this “quote to cash” process. This will keep you in compliance. Because you do not want to be out of compliance. Trust me on this one.

Thanks for reading! Be on the lookout for the next installment.

Next Up: Part 2 – The best back-office tools for your $5 million to $20 million stage.

Stay tuned.