No Accounting for Startups

Someone needs to be make insanely insanely simple accounting software for startups. I just don't see it out there. I don't want a bunch of crazy financial info and options. I want to tell you what I spent money on, when, and what it was. I also want to tell you how much came in, from what, and when. That's it. Anything else is generally a waste of my time at this point.

Really sound advice.<p>When I started my small business many many years ago, I kept records/folders like a big company, maintained books like a big company. This was what I had read in books on how to run a business.<p>Couple of years later, I read a book on simplicity/time management. This changed everything. I slapped on my face and got rid of almost all useless formalities of running my business.<p>Even though I support SQL-Ledger (open source) as part of my business, my own use of accounting software limited to bare essentials.

This is a very insightful piece (typical of this author).<p>One inherent limit does exist, though, concerning startups that get VC funding. A routine provision concerning the "information rights" that VC investors insist upon receiving states that the company shall provide periodic financials in accordance with GAAP. This means very formal and audited statements.<p>For startups that do an early Series A round, then, there will always be a strong tendency to focus on the conventional financial statements, regardless of the business model. Not that this is bad in itself, but it is a fact of life for such companies.

This is really great advice. My first start-up was seed funded by some 'big-business' people. They told us we had to spend a lot of time writing up business/financial models, including 5-year plans(!?!). As a result, we spent very little time developing and iterating on the actual product. We had a feeling this didn't make much sense, as our idea evolved every day or so, and thus so did the business 'plan'. But we didn't have the confidence or experience to stand up to the people who gave us money.<p>On my current project, we are frequently testing all types of methods and keeping/improving what works. It makes so much more sense.

This makes me much happier about all the times I sat through board meetings wondering what the hell the point of most of the financial reports were.

"Pay attention to the right metrics" is always good advice.

<a href="http://www.xero.com" rel="nofollow">http://www.xero.com</a><p>We have been using Xero for our business since day 1 about 3 years ago. Web based, has an API, multi-currency support, automatic bank feed downloads (depending on who you're with) and other great features make it a very solid offering.<p>It has made accounting an "it-just-works" aspect of our business. It's been wonderful and I would <i>strongly</i> encourage any startup to check it out. I can reconcile our transactions in about 2 minutes a day (literally). I cannot sing high enough praises for something that has saved me so much time and somehow actually made accounting fun.

Can anyone recommend a good online accounting application for small businesses in Europe? Most of the ones that are mentioned here are quite USA centric. Tax requirements in Europe are a bit different, which I guess also presents a problem as they differ from country to country.<p>I'm trying to find something that works with the Danish tax system (where I currently live), and the only one I have found so far is: <a href="http://www.e-conomic.com/" rel="nofollow">http://www.e-conomic.com/</a>, but it seems a bit heavyweight for my needs (small freelancing business.)

I wonder whether anyone has devised a similar set of metrics for scientific research. That would be a very interesting discipline to follow.

I'd be even more drastic.<p>I'm a huge fan of objectives, key results.<p>There's a decent description of this approach from Pincus himself:<p><a href="http://www.nytimes.com/2010/01/31/business/31corner.html?pagewanted=2" rel="nofollow">http://www.nytimes.com/2010/01/31/business/31corner.html?pag...</a>

He keeps saying that a cash flow statement is unnecessary but then includes it in his requirements? I agree income and balance statements are useless for startups, but a cash flow analysis will tell you precisely when you won't make payroll.

I'd like to ask what is everyone using for accounting? Anyone have an elegant solution? Does anyone's web app hook into one of the online accounting apps using the accounting app's API?

I just found <a href="http://outright.com/" rel="nofollow">http://outright.com/</a> Looks promising. It's free and it imports my Freshbooks invoices.