Accounting For Startups: How Technology Has Changed The Industry

The proliferation of the internet and the rapid development of technology throughout the world over the last 25 years has undoubtedly had a profound and fundamental effect on the very way that we as a species live.

Similarly, it’s effect on accounting for startups has been just as deep and far-reaching. Cloud computing, social media, and accounting software have not just changed how accountants conduct their bookkeeping activities, but also how they interact with startups.

It is here, in the relationship between the accountant and the small business owner, that the most drastic change to accounting for startups has taken place. After all, the fundamentals and principles of accountancy remain the same, even if the medium through which the accounting is conducted has altered.

The modern accountant must be much more than a simple “bean counter” for their clients in the 21st century. They must also adopt a number of other roles for startups that would have been completely foreign to accountants in the near past.

Likewise, the client’s role has dramatically changed, as the much of the work of an accountant has been demystified through modern technology.

Finally, due to the internet, the pool of accounting firms available to each startup has also increased significantly, meaning that choosing an accountant has become a new challenge in and of itself.

The Accountant As Business Advisor

Through the development of accounting programs such as Xerp and Quickbooks much of the simpler more rudimentary tasks of the accountant have been streamlined and can now be completed with greater ease and speed.

The classic, cliched image of the accountant sifting through shoe boxes full of receipts is definitely no longer an accurate stereotype.

This frees up the accountant’s time for more complex and demanding work. They can now adopt a more analytical and consultative role more akin to a business advisor than a bookkeeper.

This is invaluable to the small business owner, as an accountant will now offer advice regarding business plans, business structure, and many other aspects of business that may seem confusing to a startup.

The Small Business Owner’s Role

In the modern era, many clients are much more hands-on in the day to day accounting of their business.

The advent of cloud based accounting programs and social media means that clients can access the details of their accounts at any given time, and also contact their accountant through either Skype, email, or over the phone virtually twenty four hours a day.

This means a more collaborative and transparent relationship between accountant and client.

The small business owner can now keep a closer and informed eye on their businesses finances in an up to date and accurate manner.

Fragmented/Diversified Market

With the universality of the internet, the selection of accountants that a small business owner has access to has multiplied exponentially.

In this environment, trust is paramount. With the varied selection of accountants available, a small business owner has practically an infinite choice available at their fingertips.

You should only deal with an accountant you can trust implicitly.

The development of technology has ensured that accounting is constantly in flux. It is up to both the accountant and the small business owner to keep up to speed. Good luck!