5 Ways to Increase Your Start-up Valuation with Cloud Accounting

Cloud accounting is a great tool, not only for large businesses and organizations but also for start-ups. It is the process or financial strategy which helps businesses to store, monitor and process confidential financial data, without investing in expensive in-house IT server infrastructure. In the case of start-ups, Cloud accounting solutions bring in a whole plethora of benefits which help the emerging business to grow and optimize the efficacy of its operational protocols, while also increasing its valuation. Cloud accountings dynamic advantages like real-time data access, scalability, and flexibility make it a great choice for developing start-ups.

The basic fundamental of any start-up is its affinity for innovation and creativity. A start-up which implements Cloud accounting protocols with business strategy benefits in more than way. It can help start-ups with limited resources and /or knowledge to properly manage their financial aspects without much of a hassle. Here are a few advantages of implementing Cloud accounting techniques, which helps to drive up a startup’s valuation.

1.Impressive Data Flow and Access Management

Unlike large business and corporations, start-ups lack the necessary IT resources like skilled IT personnel, specialized hardware, and top notch security systems to properly set up and manage an in-house data servers. Without a significant amount of funding, start-ups can not afford these basic business requirements and resources, which made them ill-equipped to face the immense competitiveness in todays world. But with Cloud accounting solutions, they can now provide the same standard quality standards offered by a large business, which helps increase its valuation to capitalists. It dramatically reduces the edge large corporations had over start-ups before and has also enabled them to access advanced financial management tools without having to fork out a significant amount of money.

2. Better Cash-flow Management

It is gravely important for every emerging start-up to have proper cash-flow management, without which they cannot attract funding from capitalists. A start-ups effectiveness to manage cash-flow is a huge determining factor for its valuation for capital investments. With traditional accounting methods, calculating financial data and predicting and managing future expenditures. Almost all investors and investing firms gauge the long-term business viability of a start-up with its cash flow statements which makes it a very important part of a start-up’s daily operations. Cloud accounting solutions take this into account and offer start-up owners with the ability to automatically sync and update their cash flow and other financial data, which further allows entrepreneurs and business owners to put up real-time liquidity options which have a profound affect on the start-up’s future growth.

3. More Time To Focus On Core Business Development

One of the biggest advantage that Cloud accounting solutions bring to the table by eliminating the need for an in-house IT infrastructure and the resources and time required for its upkeep. This time can now be spent on other business operations and aspects. This again drives up a start-ups valuation by demonstrating its ability to adhere to its budget and derive maximum benefits and profits, which it can utilize elsewhere to grow and develop the business.

4. Increased Collaborative Opportunities

Quick and decisive financial and operational business is what makes a successful start-up. Cloud accounting solutions offer just that with real time data update along with anytime and anywhere data access through secure channels. This enables business owners, partners, investors and other parties involved the business of a start-up to collaborate seamlessly without having to be present at the same place or continent either. Involved personnel can access data through highly secure channels through any web-enabled mobile device and communicate with other stakeholders and this deft and agile business communication advantage is very attractive to investors as well.

5. Better Data Management & Security

In earlier times before cloud computing and cloud-based accounting systems came into existence, large established business and corporations were the only one who could afford stringent data security and monitoring services. But start-ups with their limited resources and budgets couldn’t afford to properly secure their data until cloud based solutions took the world by storm. Now they can utilize a cloud accounting services to implement top-notch data security and management protocols, which rival those of big data corporations. It also offers start-ups with additional data management benefits like regular scheduled data backup, redundant access protocols, multiple firewalls, encrypted data storage, and much more, which again drives up its valuation in front of investors.

It is no mystery that capital investors have a very short attention span, and if they dont see what they like, they and their investment will simply walk out. But if start-ups can properly demonstrate the efficiency of their accounting and other business operations properly, especially with the added benefits of cloud-based accounting systems in place, it attracts investors more towards the growing business. In summary, Cloud accounting offers start-ups a cost-effective and overall efficiency to increase its valuation and attract more investors and funding.