Accounting technology helps entrepreneurs manage finances
May 22, 2013
Before the recession, many Americans believed that working at an already established company is the best choice for earning a paycheck. But when the economy became more turbulent, many people who found themselves out of work decided to take matters into their own hands by creating their own businesses to support themselves. Now, as the nation recovers, many of these individuals are looking to strengthen and even expand their operations. To support this kind of growth, leaders must implement accounting technology.
In order to cut costs, many entrepreneurs likely forego accounting software in favor of manually entering data into spreadsheets. But while this may seem less expensive at first, the costs related to mistakes can quickly add up, not to mention lost revenue due to unhappy clients. Implementing more advanced solutions guarantees that high levels of accuracy and compliance are always maintained, ensuring that companies will not be unnecessarily hindered by financial trouble.
Small is the way to go
According to Babson College and Baruch College's 2012 Global Entrepreneurship Monitor (GEM) U.S. Report, more Americans than ever before are striking out on their own to work independently and create small businesses. The report's lead author, Donna Kelley, noted that 13 percent of the country's adult population was found to be engaged in entrepreneurship, and many of these people were doing so out of desire rather than necessity. The study also found that 80 percent of entrepreneurs get started with funding from their personal connections, and many also go on to employ family members, part-time workers and non?-paid workers as their companies develop.
For entrepreneurs, having accurate financial management tools is critical, especially as they seek outside services. Forbes noted that freelance marketplace Elance recently announced that its website alone generated more than $200 million for independent workers in 2012, which the firm explained may be related to the rise of startups. The service expects that freelancer earnings will total $1 billion in 2013.
Startups often can't afford to hire full-time staff members right away, so they may need to seek out freelancers to meet many of their diverse needs. But in order to maintain productive relationships and continue moving forward, managers must be able to keep accurate, timely records of payments to contractors. With better accounting software, small firms will be able to reach their goals.