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Should I Use Cloud-Based Accounting Services or an Offline Accounting Service?

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Should I Use Cloud-Based Accounting Services or an Offline Accounting Service?

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img-mark-wald.jpgIn an online discussion forum I participate in, a startup founder recently posed this question, “I'm an early stage startup with minimal, but growing, accounting needs. Should I pursue an agreement with a cloud service, or an offline accounting firm using QuickBooks?  Tangentially, my goal is to be seeking venture capital funding within the next 12 months, and I'm wondering if VC's have any preference?”

Most responses from the community included recommendations for a variety of desktop and cloud accounting software and referrals to a handful of accounting services providers. But the most thoughtful and valuable response came from a fellow entrepreneur.  Here’s a summary of what he said (link to the original discussion to follow):

  • 80 out of 100 CEOs interviewed (by an accomplished business book author) from public and large private companies said that “getting an expert business finance advisor” was the first really great business decision they ever made. You don’t get expert financial advice from cloud services. You get that from qualified, experienced people.
  • VCs invest in the founder and what you’ve accomplished—investors don’t care whatsoever which accounting services platform you use to manage your books.

What excellent advice! Sure, if you run a very small professional services business with simple fee revenue and basic expenses you may have your basic bookkeeping needs met by a cloud accounting platform that mostly automates your expense categorizations well enough that your tax preparer can easily complete your tax return. But if you have plans to scale beyond the garage office and are building a business with any measure of complexity, skip past the allure of an all-in-one automated cloud accounting service and find a professional business finance advisor with real management accounting expertise.

Management Accountants understand the essentials of business operations and focus on running the business most effectively through the intelligent use of management reporting.  Remember, the software itself is largely irrelevant—what’s important is who you have on your accounting services team and how they’re aligning your selected tools and business processes to generate meaningful, timely reports that help you run your business. 

Here’s a link to the discussion thread that inspired my blog post.

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Mark Wald

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Mark Wald

Mark Wald, Managing Director, Supporting Strategies | Santa Monica, LA, and Ventura County, provides bookkeeping and controller services to growing businesses.

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This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.