The early stages of a venture capital startup are both deeply exhilarating and profoundly daunting. Every day involves dizzying amounts of decision-making as partnerships and projects form and coalesce. It's often the make-or-break time in a startup's life- impressive results are demanded in a relatively short time, investors want proof of accomplishment, and all the puzzle pieces need to fit. The reality is that no matter how ultra-tech a startup is, it will face many of the same structural logistics that plague any business. Offices need to be managed, staff needs coordination, payroll and benefits need to be calculated and paid, all while the bills keep coming in. This takes time and energy away from the primary goal of getting up and rolling.
In a startup, accounting is certainly one of the functions that takes up valuable resources, when the focus needs to be on rapid growth and development. Yet this crucial function cannot be given short shrift or approached halfway. Solid accounting practices need to be in place at the start. Accounting needs to provide timely and accurate budgeting, expenditures and forecasting in order to keep the ship on course and growing. A DIY spirit is most admirable in any startup, but not at the risk of taking on way too much initially- there are a million other things to be concerned about at this stage. Giving the accounting tasks to a virtual accounting service is a very effective solution on many levels, and there are excellent reasons to do it.
By using a virtual accounting service, startups often have access to a team of seasoned accounting pros, each with their own strengths and areas of focus, instead of a single individual. This strength in numbers is of particular importance in the energetic arena of venture capital, and it guarantees there will be someone on the team with the expertise and experience to answer whatever questions may arise. The team structure also makes virtual accounting a very flexible, contoured solution. A virtual accounting service can add or subtract a team member within the workload, tailoring the team as a company experiences growth spurts or lean periods.
A virtual accounting service can provide instant, 24/7 access to needed financial data from a secure internet connection and can recommend the functions, software and apps that will keep all accounting and bookkeeping cutting-edge current and globally accessible in real time. With virtual accounting, a startup needn't spend time hiring, training and overseeing its bookkeepers, nor need it worry about losing instantaneous access and control of its bookkeeping.
Many virtual accounting services use a secure server and provide countermeasures to insure that data is secure and loss-free. A "cyber insurance policy" is often taken out on a startup's data. Offsite backup is an additional measure- information may be stored on a server in a data center while copies of the data are placed on servers in other data centers. Between the cyber insurance policy and various offsite backups, a loss of data is virtually impossible.
Virtual accounting employees are usually heavily vetted and are trained to work together to serve a client's needs. Potential employees often undergo extensive background checks and usually have a solid degree of experience in accounting and/or bookkeeping. Many virtual accounting services also require the signing of a nondisclosure agreement.
In a company's early stage, it often makes strategic sense to look realistically at what functions can be done in-house and what should be outsourced. To help lighten both the burden and overhead, startups are increasingly outsourcing key operational tasks and turning to virtual accounting services to help free up their valuable internal resources and enable them to focus on developing a world-class business.