Accounting Software for Second Stage Companies
If you’re in second stage, chances are you’re already using QuickBooks, and are starting to get frustrated with its limitations. Welcome to the club!
The temptation to switch accounting software to get better reporting is great, and sometimes necessary. Sometimes. It’s also very easy to fall in a rabbit hole chasing the perfect accounting software, and that’s what I want to help you avoid. Here are a few things to consider if you’re itching to switch.
If what you want is easier access to data, simply moving from QuickBooks to QuickBooks Online will allow simpler access to data from anywhere at any time. Granted, the conversion is *not* as easy as QuickBooks would lead you to believe, and I would strongly recommend paying to have it done by a pro. Otherwise, I can pretty much guarantee there will be expletives involved and your bookkeeper won’t be talking to you for some period of time. (Both out of legitimate frustration and because they’re busy fixing what the QuickBooks conversion messed up.) Just ask me for quotes from multiple sources lest you think I jest… That said, the CEOs I know who have been through the conversion are happier to be closer to their financials, even though there are some sacrifices in terms of functionality.
If you are trying to do something QuickBooks can’t easily do, here’s the question I’d start with. Do you really *need* to do something it can’t do? If you find yourself saying something along the lines of, “Yes, my business is different and we need something special to handle our unique situation”, I’d like to challenge that. As a second-stage company, you’re in a tough niche. You’re big enough to be outgrowing your existing software and processes, but not yet big enough to stomach the switch to enterprise solutions. (Cost-wise and/or time-to-implement-wise.) However, it is tempting to bite the bullet and move to a “grown-up” solution because you know you will eventually grow enough to need it.
While it’s true you may eventually need to switch accounting software, it’s to your advantage to wait until it’s absolutely necessary, so you can focus on investing in areas that will contribute more directly to the bottom line. So how will you get what you need in the meantime? Here’s a valuable second stage secret. Most second stage companies are using QuickBooks and making it work just fine. How? By solving simply.
As entrepreneurs, it’s our mission to create something special and unique, which leads quite logically to believing it’s so unique it requires its own solution. Chances are if you’re struggling to get the data you need to manage your company, it’s because some fundamental piece is missing, leaving a gap that you’re inventing things to fix. The gap you feel is real, I don’t dispute that! Over time I’ve learned there are a handful of basic tools that are likely to get you what you need. No invention required – truly!
The thing is, these basic tools are very rarely taught at the level you need as a second stage CEO. Hence the reason you’re experiencing a gap. Fortunately, a guy by the name of Greg Crabtree has written THE book on finance for second stage companies called “Simple Numbers, Straight Talk, Big Profits!” I’ll leave summarizing the book for another article, but trust me when I say it’s an easy read that will generate at least of a couple of “Aha!” moments. Before you create that next new report or look further into changing accounting systems, take a look at Greg’s book. And let me know what your aha moments were! Happy reading!