{"id":5564,"date":"2018-08-14T14:52:27","date_gmt":"2018-08-14T06:52:27","guid":{"rendered":"https:\/\/skale.today\/2018\/08\/14\/accounting-for-your-business-type-tips-for-the-tech-industry\/"},"modified":"2018-08-14T14:52:27","modified_gmt":"2018-08-14T06:52:27","slug":"accounting-for-your-business-type-tips-for-the-tech-industry","status":"publish","type":"post","link":"https:\/\/www.skale.today\/content\/2018\/08\/14\/accounting-for-your-business-type-tips-for-the-tech-industry\/","title":{"rendered":"Accounting for Your Business Type: Tips for the Tech Industry"},"content":{"rendered":"

Technology is changing the way we live our lives, it is also disrupting our businesses. The tech industry comprises numerous subsectors; computers and networking, semiconductors, financial technology, software and internet and the internet of things. Each subsector has diverse product and service offerings and various revenue recognition issues. Each subsector is also evolving, fast.<\/p>\n

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What is a Tech Company?<\/strong><\/h2>\n

\u201cYou are a technology company if you are in the business of selling technology. If your product consists of applied scientific knowledge that solves concrete problems and enables other endeavors, you are a technology company,\u201d says one global tech expert.<\/p>\n

A tech company can be defined by the products or services it sells.\u00a0This means renowned tech companies such as Airbnb and Uber do not qualify. They are tech-driven, but their true industry is hospitality or taxis.<\/p>\n

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Tech is Different<\/strong><\/h2>\n

Technology companies are different from other types of industries in a number of ways;<\/p>\n

  • Different motivations<\/li>\n
  • Different time frames<\/li>\n
  • Different business models<\/li>\n
  • Different scalability<\/li>\n
  • Different KPIs<\/li>\n

    Choosing the most suitable accounting software<\/a>\u00a0for your tech business should take in to account these five features when you are exploring the market. These differences should also guide you in your timing of upgrading all your\u00a0accounting software<\/a>. Try scanning the tech news to see what business software your competitors are using.<\/p>\n

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    Tech Start-up or Tech SME<\/strong><\/h2>\n

    If you work in technology, or\u00a0live in a tech hub such as Silicon Valley or Hong Kong you probably know someone who is in the process of conceptualizing their own startup. A start-up is often misunderstood as a new SME but there are significant differences between the two.<\/p>\n

    For years, investors treated\u00a0startups as smaller versions of large companies but there are substantial ideological and organizational\u00a0differences between startups and small businesses<\/a>\u00a0which necessitates different funding strategies and KPIs.<\/p>\n

     <\/p>\n

    Start-up vs SME<\/h2>\n

    A startup can be defined as a\u00a0\u201ctemporary organization designed to search for a repeatable and scalable business model.\u201d<\/a>\u00a0A startup in the tech industry should be short for \u201cscalable startup,\u201d which\u00a0searches to not only prove their business model, but to do so quickly, in a way that will have a significant impact on the current market. This means that a \u201cscalable\u201d startup has the intent to become a large company, unlike an SME.<\/p>\n

    A scalable startup founder doesn\u2019t just want to be their\u00a0own boss; they want to take over the world. From day one their intent is to grow their startup into\u00a0a large, disruptive company. They\u00a0may believe that they have come across the next \u2018big idea\u2019 that will disrupt the industry, take customers from existing companies, or create new markets.<\/p>\n

    This is in contrast with the\u00a0definition of a small business<\/a>, which the U.S. Small Business Administration describes as \u201cindependently owned and operated, organized for profit, and not dominant in its field.\u201d<\/p>\n

    The driving forces\u00a0behind the two business models are also different. The intent of the startup founder is to disrupt\u00a0the market with a scalable and impactful business model; whereas the intent of the SME owner\u00a0is to be their own boss and secure a place in the local market.<\/p>\n

     <\/p>\n

    A Tech Start-up Is Temporary<\/strong><\/h2>\n

    Nothing is permanent. A startup founder has three main functions:<\/p>\n