The 10 Best Financial Tools for Startups in 2022

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Financial tools for startups

Financial management for startups is crucial for more established businesses. This entails keeping track of:

Incoming and outgoing expenses
Source of incoming finances
Cash flow
Income statements
Recurring pattern of expenses as the startup scales

The tools used in financial planning enable startups to keep up with their finances to determine their financial health and aim towards sustainable development. Startup financial models need to be accurate for investors to find the startups worthy of funding. These models track and analyze investment, income, cash flow management, payroll expenses, and a lot more. Financial planning and analysis or FP & A tools for startups efficiently track expenses via advanced digital tools that monitor all aspects of financing to pave the way to attain set goals. These tools also come in handy during audits and in preparing tax returns.

How to choose financial planning software for startups?

1. Integration

The ideal financial management software will integrate with all tools in the existing tech stack to facilitate cross-departmental collaboration; thus, integration establishes ease of working. Ideally, the software should integrate with HR, travel software, tax payment providers, ERP, etc.

2. Cloud-based finance management

Any startup incorporates a finance management tool because it guarantees the complete analysis of financial data from all disparate sources. Such consolidation must then be easily accessible to all, regardless of their location, simultaneously, which is possible if the software uses cloud-based technology.

3. Real-time insights

Records of the past are essential for scrutinizing patterns over the years, but real-time insights are equally important because they allow you to make more effective business decisions. The ideal financial management software will provide real-time data that provides up-to-date market patterns. Hence, you never miss out on current scenarios determining the financial health of your business.

4. Automation of finance operations

Automation is a significant attraction when choosing any good financial management software so you can manage your accounting and financing operations with ease. If workflows are automated, you can save a lot of time manually collecting all the data for different departments, and rest assured that the chances of error will be minimal.

5. Audit trail

The ideal financial management software will provide clear documentation of all transactions, so your reports are audit-ready within minutes.

What are the 10 best financial management tools for startups?

Expensify

Description: All-inclusive expense management platform providing a completely automated solution for startups and individuals

Best for: Startups in all stages and across all industries

Pricing

For businesses, three plans are available at varied prices:

Free

Collect: $5 per user per month with an Expensify Card

Control: $9 per user per month with an Expensify Card

Evaluation of critical criteria:

Integration: Available with accounting tools (QuickBooks, Oracle NetSuite, Xero, Sage Intacct, etc.), HR management (Gusto, Zenefits, Greenhouse, Workday), tax management tools (Tax International, Global VatTax), and Travel providers (Tripcatcher, Locomote, Egencia and so on). Receipt integrations include Uber, Lyft, Grab, Spot HERO, Roomex, etc.
Cloud-based finance management: Several deployment options including Cloud, SaaS, Android, iPhone, Windows, Mac, Chromebook
Real-time insights: Yes
Automation of finance operations: Yes, including automatic transcription of details on pictures of receipts you upload and automatic submission of business expenses for approval and compensation
Audit trail: Yes

Pros:

Efficient tracking of employee spendings
Expensify mobile app is easy to use
Rectifying errors is easy

Cons:

Needs more efficient customer assistance
Sorting old receipts requires more organization so they can be accessed easily.
Significant delay in the credit card sync

Gusto

Description: All-in-one platform for payroll processing, tax compliance, employee benefits management, and more

Best for: Small and fast-growing startups with varying degrees of complexity.

Pricing

Four plans are available at varied prices:

Core: $39 per month + $6 per month per person

Complete: $39 per month + $12 per month per person

Concierge: $149 per month + $12 per month per person

Select: Custom pricing available

Evaluation of critical criteria:

Integration: Available, including accounting tools (AccountingSuite, Aplos, Bookkeeper 360, Freshbooks), expense management tools (Expensify, Receipt Bank), financial benefit tools (Gradvisor and Guideline), legal compliance tools (Secureframe, Data), analytical tools (Dataddo, Pave, The Calculate Hub), and time tracking software (7Shifts, Attendance Bot, Boomr), among others.
Cloud-based finance management: Yes
Real-time insights: Yes, and native time tracking available for payroll
Automation of finance operations: Yes, including the automated compilation of reports and identification of tax credits. Automated payroll procedures like deductions, direct deposits, W-2s and 1099s, automatic 401(k)s, etc.
Audit trail: ACA Reporting, COBRA management, and tax compliance.

Pros:

Intuitive UI
Automated compliance with federal and state requirements
Effective running of payroll

Cons:

The software takes time to load.
Customer service should be more prompt as payroll and tax measures are time-sensitive.
The time clock feature is expensive.

Bill.com

Description: Finance management platform streamlines incoming and outgoing expenses and makes expense management and reimbursement easy through artificial intelligence.

Best for: Small and medium-sized startups

Pricing

For businesses, two plans are available at varied prices:

Corporate: $69 per user per month.

Enterprise: Custom pricing available

Additional transaction fees apply.

Evaluation of key criteria

Integration: Automatic sync available with Oracle NetSuite, Sage Intacct, Xero, and data integration with Freshbooks, Thomson Reuters, SAP, and Sage
Cloud-based finance management: Yes
Real-time insights: Yes
Automation of finance operations: Yes, including automatic data entry and automatic payments
Audit trail: Yes

Pros:

Efficient organization and management of vendor contracts
The accounts payable feature is highly efficient for small and medium-sized startups
Intuitive design

Cons:

Customer service is not prompt.
New interface delays loading of screens
It does not support HEIC files

Freshbooks

Description: Expense management platform for sending out invoices, time tracking, payroll management, tax management, and more.

Best for: Small and medium-sized startups, freelancers, and businesses with contractors and employees.

Pricing

Four plans are available at varied prices:

Lite: $6 per month for five billable clients

Plus: $10 per month for 50 billable clients

Premium: $20 for unlimited billable clients

Select: Custom pricing available for unlimited billable clients and advanced features

A 30-day free trial is available.

Evaluation of critical criteria:

Integration: Available with over 100 apps, including Tally for Roger, CashFlow Frog, Bench, Calendly, PandaDoc, Suite CRM, KEY PAY, TransferMate, and Time Bro, among others.
Cloud-based finance management: Yes
Real-time insights: Yes
Automation of finance operations: Yes
Audit trail: No, but users can view recent payments and invoices with the Relationship Feed feature

Pros:

Flexibility of adding and removing third-party apps according to needs
Ease of creating templates for invoices
Clean interface

Cons:

More features would be desired in the mobile app
The automatic connection with bank accounts with the Expenses feature does not always work.
Changes to the terms of a particular invoice continue to exist even in future invoices.

QuickBooks Accounting for Small Businesses

Description: Finance and account management software that empowers startups to run payroll, manage expenses, and track inventories effectively

Best for: Startups and mall businesses

Pricing

Three plans are available at varied prices:

Simple Start: $12.50 per month

Essentials: $25 per month

Plus: $40 per month

Advanced: $90 per month

Evaluation of critical criteria:

Integration: Available, including Expensify, Fathom, Qvinci, Float, eBay, Zoho Expense, On The Clock Time Clock, Donor Receipts, Avalara AvaTax, Halon Tax, and Gusto, among others.
Cloud-based finance management: Yes
Real-time insights: Yes
Automation of finance operations: Yes
Audit trail: Yes

Pros:

Account configuration is quick because of the prompts/suggestions for categorizing expenses.
Simple setup and easy overall use
Every single detail regarding invoices is available in one place.

Cons:

The online version does not have robust features like the desktop version.
The customer service is not prompt.

Xero

Description: Finance management platform that provides real-time financial reports when needed, along with performance tracking, setting up of lock dates, exporting of reports to a PDF, claiming of expenses, and collection of payments.

Best for: Small and growing startups.

Pricing

Three plans are available at varied prices:

Starter: $22 per month

Standard: $35 per month

Premium: $47 per month

Optional add ons are available with all three plans.

Evaluation of critical criteria:

Integration: CRMs, Stripe, Go Cardless. Bank reconciliation is also available.
Cloud-based finance management: Yes
Real-time insights: Yes
Automation of finance operations: Yes
Audit trail: Yes, in the form of the journal report feature

Pros:

Allows flexibility in terms of the degree of automation you require for your accounts.
Xero eliminates the recurring and time-consuming tasks necessary for accounting and bookkeeping.
Effective budgeting

Cons:

There have been a few instances of bank feeds not working
No built-in HubDoc integration
Inefficient customer service needs to be more efficient

Stripe

Description: Tech company providing economic infrastructure so startups can conduct their business online.

Best for: Startups and growing businesses

Pricing

Two plans are available:

Integrated: 1.4% + 20p for European Cards and 2.9% + 20p for Non-European Cards.

Customized: Custom pricing is available.

Evaluation of critical criteria:

Integration: Available with digital wallets such as Google Pay, Apple Pay, Alipay, and Chargebee
Cloud-based finance management: Yes, startups can accept payments online.
Real-time insights: Yes
Automation of finance operations: Yes, all payments and transactions can be automatically accounted for in reports.
Audit trail: Yes

Pros:

Ease of setting up
Transparent pricing

Cons:

Some advanced knowledge is required for using open API and tools.
Since it wholly facilitates online payments and businesses, offline retail companies cannot benefit from Stripe.

Square Payments

Description: Payment processing platform that provides freedom in the method of payments according to customers' choices along with quick deposits, invoices, payroll processing, and advanced protection measures.

Best for Early-stage startups and enterprises across all industries.

Pricing: A free version is available. More pricing details can be accessed by contacting Square Payments.

Evaluation of critical criteria:

Integration: API, Wix, Ecwid, WooCommerce, and Weebly
Cloud-based finance management: Yes, cloud POS software is available.
Real-time insights: Yes, real-time charts and widgets are available with each transaction.
Automation of finance operations: ACH payments can be accepted by businesses.
Audit trail: Not known

Pros:

Easy to send virtual receipts
Can tracking of sales data and customer rewards
Easy solution for accepting credit card payments

Cons:

Accessing some reports can be difficult
Initial difficulty in navigating the app

SAP Concur

Description: Spend management solution that also incorporates vendor invoices, expense management, travel management, and risk evaluation with the ultimate aim of optimizing startup spending.

Best for: Businesses of all sizes

Pricing: A free trial is available. More pricing details can be accessed by contacting SAP Concur.

Evaluation of critical criteria:

Integration: SAP systems, JPMorgan Chase, travel management tools.
Cloud-based finance management: Yes
Real-time insights: Yes
Automation of finance operations: Yes
Audit trail: Yes, in the form of the changes made to an expense report

Pros:

Uploading receipts for expenses is easy.
Reimbursement is easy.

Cons:

The occasional difficulty in updating account numbers.
Splitting expenses is difficult because the same image cannot be applied to multiple expenses.

ADP

Description: Finance management solution operating on a single database that consolidates and syncs data for HR management, payroll services, analytics, and talent management.

Best for: Startups of all sizes, from 1-1000+ employees

Pricing: Not disclosed publicly but can be accessed by contacting ADP. No free trial or free version is available.

Evaluation of critical criteria:

Integration: HR and business applications through the ADP Marketplace and APIs
Cloud-based finance management: Yes
Real-time insights: Yes
Automation of finance operations: Yes
Audit trail: Yes

Pros:

Ease of use for non-HR and non-payroll professionals
The support of the ADP customer service team stands out, particularly during the Covid-19 pandemic
Consolidation of all data in one place is done well.

Cons:

Having a set functionality of different features to rely on Fixtu can be difficult in the case of ADP because of the markedly more significant degree of customization provided. As a result of this high degree of customization, having anything fixed, set, or permanent to count on is very difficult because it is bound to change very frequently.

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