How to Establish Accounting for Your Startup

You can read more about our ratings for various business accounting software here. You should be familiar with more than one software as some of your clients may have a preference in terms of the accounting software that they’d like you to use. Top angel investors and VCs refer Kruze because they trust us to give the right advice. Our clients are portfolio companies of top technology and Silicon Valley investors, including Y-Combinator, Kleiner, Sequoia, Khsola, Launch, Techstars and more.

Our bankers have years of real-world experience to provide guidance across a number of industries. You’ll start making real progress, and experience first-hand what it’s like to put your ideas into the world. Every business should have a website, and it’s worth spending a bit of money to set it up right. Startup Tandem is a group of entrepreneurs, like minded with one common goal – to provide valuable services at an adequate price. Our outsourced bookkeeping options are efficient and keep your books in order. Healthy unit economics and a monthly forecast ensure you’re prepared for fundraising and board meetings.

Why FinancePal Is a Trusted Accounting Solution for Startups

Startup accounting matters because it’s a central pillar of strong financial management. As a founder or small business owner, you have clear growth goals. Being the best bookkeeper in the world won’t help you if no one knows who you are or how to find you. The best thing about bookkeeping is that there’s always a demand. As long as there are businesses, there will be a market for people who can help them track their money.

However, not all founders are trained finance professionals – software and financial packets are only half the story. Kruze’s accounting team knows how to explain what financial statements mean and how important metrics impact a startup’s strategy. Reconciliation is an especially important part of bookkeeping for funded companies, since investors (and potential acquirer) expect accrual accounting and financials that are close to GAAP. Kruze helps set up connected, automated systems that help do much of this work automatically. But, we go the next step and have our experienced team do several levels of reviews to help catch anything that the automated systems might miss.

The Founder’s Guide to Startup Accounting

Learning the basics, and asking for the right kind help when things go sideways, will go a long way toward getting your startup’s finances in order. Some of the best accounting advice for startups is to know your basic accounting terms. Opening a bank account for your startup is fairly simple and takes just a few steps to set up.

In doing so, you can get a good idea as to the range bookkeepers charge for services. Our practice is built on best of breed cloud accounting software like QuickBooks, Xero, Netsuite, Gusto, Zenefits, Expensify, Avalara, Brex iand Bill.com. Technology makes us more efficient, saving our clients money and letting us offer higher value services like FP&A modeling, 409A valuation and venture debt consulting. Companies that are planning on raising venture capital need good bookkeeping services – VCs, strategic acquirers and IPO underwriters want financials that are done right – the 1st time. Not every startup will be ready to hire an outsourced bookkeeping service on day one.

What is bookkeeping?

If you end up using your personal credit card for business expenses, get into the habit of reimbursing yourself. It may seem silly when you’re just a one-person business, but again, it will help if you ever have to prove to the IRS that you take your business seriously. As you can see, there is a lot that goes into maintaining accurate books and financial records. With all the responsibilities you already have as a business bookkeeping for startups owner, taking on these financial responsibilities may become overwhelming, especially if you have not overseen business finances before. When you’re setting up your business’ accounting, you should also research tax obligations to determine how your choices could impact you when taxes are due. For example, you may be responsible for paying sales and use taxes, and if you don’t, you could face penalties from the IRS.

Whether you have a CRM solution like HubSpot, Salesforce, etc. or a WMS solution like Softeon, you can likely feed data from your software and apps into your ERP. With this information, your accountant can also dig down a little deeper into your operations with unit economics. Your accountant will combine your financial data with inventory and operations data to determine per unit values for each of these and other indicators. This can help you identify areas where you can optimize your product offerings to meet and exceed your goals.

They should also be competent with accounting for distributed teams. This will mean being experienced with managing payroll, vendors, and clients across different tax jurisdictions, as well as being proficient with regional excise, property taxes and tax credits. This method of accounting isn’t straightforward, especially when it comes to recurring payments like subscriptions and rent.

With a constantly shifting financial position, it’s easy for team members to get carried away with company purchases whether it’s for equipment or business travel expenses. An accountant can help you develop best practices for managing company credit cards. It’s common for small business owners to overpay both federal and state taxes because they don’t understand the tax codes and which tax credits and deductions they may qualify for. Managing your bookkeeping and accounting right from the start will allow you to keep better control of your finances. You’ll also know when you’re overspending and when you need to increase sales. Unlike certified public accountants, bookkeepers don’t file tax returns or audit financial statements.