How can I streamline payment processes for my tech startup?

Financial accuracy is essential to your growing tech business. From your early startup days through funding and scaling, you need a clear picture of the cash flowing in and out of your company. At the same time, you don’t want to be slowed down by inefficient tech or laborious processes. Streamlining your payment processes allows you to have the most accurate and up-to-date data possible as you make big decisions, report to investors, and plan for the future. No matter the product or service you’re selling, the systems and technology you use should be able to grow with your business. 

Simple transactions require simple tech 

QuickBooks Online (“QBO”) has all the tools necessary for a startup. It’s a complete general ledger platform that can grow with your business. Routine tasks like syncing bank and credit card transactions, paying bills, and sending invoices are efficiently managed without having to leave the app. This saves you and your accountants hours of manual data entry and it’s accessible with a web browser anywhere, anytime. 

But your startup won’t stay small for long. As you grow, the accounting will become more complex and ancillary apps will need to be added to your tech stack to improve efficiency and maintain accuracy.

Money Coming In: Invoicing and Revenue Reporting

QBO is more than capable of handling large volumes of invoices, but isn’t meant to be a CRM, order to cash system, or subscription management system. It also doesn’t currently have revenue recognition modules or the ability to report tech industry KPIs. When these processes and calculations become too cumbersome for QBO and spreadsheets, it’s time to consider ancillary software.

Add-on applications act as a bridge between your Sales/CRM system and your general ledger. They manage customer subscriptions, serve as a billing platform, support accounts receivable collections, calculate revenue recognition, and summarize tech specific KPIs. At WA, we have experience with the following applications specific to the SaaS and software industries:

  • SaasOptics
  • Connectwise
  • Stripe
  • Chargebee

Your specific timeline for moving to a platform like these is dependent on the type and volume of payments you’re processing. 

Businesses that sell annual software licenses typically have a lower volume of transactions and will be able to use QBO plus spreadsheets for a couple of years.

On the other hand, SaaS companies usually have a higher volume of transactions that are invoiced monthly. They most likely will need to make the transition to an ancillary application outside of QBO much sooner.

Money Going Out: Accounts Payable

The systems you use to manage your accounts payable will also grow and change with your business. In the early days of your startup, you as a founder will easily be able to monitor exactly what bills and expenses are due and when payments are made. The software requirements at this stage are simple and can be handled by QBO.

Melio is a third-party app that has a bill pay system embedded in QBO. This allows the user to pay bills and post payments to the general ledger without ever having to leave QBO, thereby increasing efficiency and improving accuracy.

As you enter the growth phase of your business, accounts payable becomes more complex and you’ll need various levels of approval before your vendors are paid. Adding approval levels to the accounts payable cycle:

  • Plays a vital role in the CFO’s cash management decisions
  • Ensures compliance during audits and due diligence for rounds of funding
  • Minimizes fraud and promotes the accuracy of outgoing payments
  • Promotes budget accountability at a department level

For a more robust approval process, we recommend adding Bill.com to the tech stack. Bill.com automates much of the back-office financial operations. It syncs with QBO, provides high-tech data encryption, and automatically logs all your payment-related activities so you’re always audit ready.

When it’s time to add additional software to your tech stack, it’s important to keep in mind the time it takes to import historical data and the current workflows that will need to be updated. Be sure to gather input from the various teams that will be affected and allow time for training sessions to ensure a smooth transition.

Whatever the stage of your tech business, you have too much on your plate to be weighed down by financial burdens. At WA, our financial services can grow with you. We utilize the best accounting tech to provide you spotless bookkeeping and appropriate advice through the startup, growth, and scaling phases.

Learn more about how we can help streamline your processes and get you closer to your goals here.