Forget the old stereotype of a tech boom limited to Silicon Valley. Venture capital has spread itself far and wide, creating blossoming startup cultures in the Silicon Hills (Austin), the Silicon Mountains (Denver and Boulder), Philicon Valley (Philadelphia suburbs), and the North Carolina research triangle — just to name a few.
With tens of billions of dollars of venture capital being invested in startups every quarter, it’s no surprise that these companies need help keeping track of funding and expenses. For professional bookkeepers, startup fever offers a fantastic opportunity for developing a new client base. What do startups need, and how can bookkeepers position themselves to become a trusted resource for startup clients? We’ll take a look in this blog.
Why startups outsource bookkeeping
Most guides to startups advise outsourcing bookkeeping functions, and with good reason. Attempting to perform all bookkeeping tasks in-house can result in problems with knowledge retention and scalability. Outsourcing is generally cost-effective, and can scale rapidly as companies grow from having just a few employees into IPO-ready behemoths. Outsourced bookkeeping also minimizes financial risk — a critical factor when even a small financial misstep could spell doom for a bootstrapped or newly-funded startup.
What’s more, by outsourcing to expert bookkeepers, companies can ensure that they can shop around for bookkeepers who are already using the most advanced technologies and current best practices. Startups are fast-moving early adopters of new technologies, which can be more difficult to keep up with in an in-house environment.
The race for startup clients
Outsourced bookkeepers have responded to the rush of startup clients by configuring services specifically geared to the needs of startups. Rather than just keeping ledgers, modern outsourced bookkeepers see themselves as guardians of their clients’ growth, ensuring that financial decisions are made responsibly and with an eye toward the short- and long-term goals of the startup’s leaders.
Using state-of-the-art software, modern outsourced bookkeepers can ensure that clients always have access to their data, allowing startups more control and understanding than ever before. Competition for clients can be fierce, and the firms that win out are usually the ones that go the extra mile to demonstrate that they understand the startup market and can be instrumental to company growth.
The full-stack bookkeeper
The most in-demand tech workers at many startups are versatile programmers who can write for both the front and back end of software — often called “full-stack” programmers or developers. To get ahead of the competition for startup clients, accounting firms should consider making themselves “full-stack bookkeepers,” offering a range of services beyond basic accounting functions.
For instance, the full-stack bookkeeper should understand and be able to help businesses with initial licensing and registration as a corporation, as well as taxation issues that could impact legal compliance.
It’s also critical for full-stack bookkeepers to keep in the loop about new developments in automation technology and software. Today’s startups expect contemporary cloud platforms and software-as-a-service (SaaS), rather than cumbersome desktop installations that require frequent updates — if you’re a true full-stack bookkeeper, the cloud is your friend.
What’s more, cloud and SaaS software can allow bookkeepers to service a significantly higher number of clients in the same amount of time, maximizing efficiency and profits while offering an unprecedented amount of transparency to clients.
Charting your future
Many startups struggle with the confusing, nuanced requirements of sales tax registration, calculation, collection, and filing. With over 12,000 sales tax jurisdictions, each with its own rules regarding rates and taxability, just staying compliant with this common tax type can become a roadblock for fast-growing startups — especially those experiencing rapid expansion to new states.
By offering your clients sales tax services, including returns filing and cloud-based solutions for calculation, you gain a competitive advantage over bookkeepers with a more narrow range of services.
Avalara is ready to partner with today’s outsourced bookkeepers, giving them the ability to power up their practices with state-of-the-art tools for sales tax calculation, filing, and document management. Don’t wait to become a full-stack bookkeeper — check out Avalara for Accountants today to learn more about how Avalara can help you get a piece of the startup market.