Situated along the upward slope of the digital transformation S-curve, tech companies bring new technologies to market and make existing niche technology mainstream. Some really innovative tech startups sit over the development horizon and drive industry change. Like other ventures, tech startups have to track expenses and pay tax — and if you’ve been wondering how to find the best accounting software for tech startups, you’re in the right place.

In this article, we’ll explore five vital features to look for in accounting software, and we’ll tell you why each feature is important. 

Accounting features to look for

The right accounting software can help you stay on top of your company finances — but it can be hard to know which accounting program or app to choose. Let’s review five of the most important accounting features to look for in a finance-centric app.

1) Profit and loss

Also known as income statements, profit and loss reports summarise a company’s incoming revenue and outgoing costs and expenses over a set period of time. The revenue you bring in is known as your ‘top line’. The cost of the goods you sell, your operating costs, the taxes and interest you pay, and any other one-time payouts are rolled into your expenses. In a nutshell, the difference between your revenue and your outgoing expenses is your profit — also known as your net income, or your ‘bottom line’.

Profit and loss statements are a vital financial document because they paint an at-a-glance picture of how your business is doing. You can use a profit and loss statement to help prove your company’s creditworthiness.

2) Expense monitoring

Expense tracking can be time consuming and tedious — especially if a lot of small expenses go out of your business current account every month. Nevertheless, it’s important to keep track of your outgoing expenses to ensure you’re not paying out more than you should, or that you haven’t been charged more than once for the same product or service. Outgoing expenses that suddenly increase without good reason could be an indicator of fraud, too.

Automatic expense tracking is an essential feature in any accounting software. It not only saves time, but also improves accuracy, so you can get a clear overview of what you’re spending every month.

3) Real-time tax tracking

If you don’t track your business taxes — which could include corporation taxes if you run a limited company — you might get a shock at the end of the year. Tax tracking starts with a good understanding of your unique tax obligations; if you’re not sure what they are, you’ll find helpful information on the GOV.UK website. Don’t forget to research tax bands, National Insurance contributions and payments on account.

Arguably one of the best ways to save for sSelf-a Assessment tax payments is to put money aside as you go along. Look for accounting software with a tax estimating feature, and use that feature to channel a proportion of your monthly business income into a designated tax account. 

4) On-the-go invoicing 

Invoicing is a regular task in any business setting. Some companies use word processing software to create invoices — Microsoft Word or Pages, for instance — while others use cloud-based accounting programs. Occasionally, sole proprietors write invoices by hand, but handwritten invoices can be hard to keep track of unless they’re scanned.

Mobile accounting software with on-the-go invoicing can be tremendously helpful. If you’ve forgotten to send a client an invoice — or if you’re on the road and want to provide your client with an invoice right away — you simply use your app to generate and send a professional-looking document. If your accounting software automatically tracks incoming payments associated with invoices it creates, so much the better. 

5) Accountant connection

Some business owners calculate taxes, create expense reports and track profit and loss all by themselves. Others monitor incoming and outgoing payments, but leave more complicated tasks to an accountant or a bookkeeper. If you start off as a sole proprietor and later decide to incorporate, you might also choose to change your accounting practices.

Accounting software with data sharing can be very helpful if your business finances get more complex. Apps like Countingup, for instance, let you send bookkeeping data directly to your accountant — quickly, accurately and without duplication errors. When you use Countingup in this way, you can still monitor your incoming and outgoing payments — but you transfer financial reporting obligations over to a professional.

Stay on track with Countingup

From online events platforms to SaaS, cybersecurity and beyond, tech startups weave innovation into daily life. If you’re a tech company founder, you probably spend your days speaking to investors, testing cloud-based solutions, writing emails, cultivating your social media presence and marketing your business. Somewhere in the midst of that milieu, you also need to find time to do essential accounting tasks — but when?

That’s where Countingup comes in. Countingup is a business current account and an array of accounting tools rolled into one neat app. When you subscribe to Countingup, you get a business current account and a Mastercard, which you can use to separate your company and your personal finances. You can view incoming funds, monitor outgoing expenses and generate profit and loss reports at the touch of a button.

To learn more about Countingup, or to sign up for a three-month free trial, click here