As the founder of a startup, managing your own financial data takes time and energy away from running your business, which is your top priority. Because of this, a growing number of startup and early-stage businesses outsource their bookkeeping.
We are an exceptional financial partner for the initial bookkeeping and accounting requirements of your small business. We can assist startups like yours in many ways. And we offer more in the way of bookkeeping services than most businesses do.
As a brand-new business owner, your passion is probably centered on the accomplishment of your original business concept. When a business is expanding, keeping the books balanced, bookkeeping, and accounting are not always the first things that come to mind for business owners.
Learning how accounting, bookkeeping, and financial reports can help your business will be in your best interest as a company founder. Early accounting can help your company position itself for effective tax advantages. You and your accountant can avoid hassles during tax season with proper bookkeeping. You’ll want to find out more about how you can use these metrics to your advantage if you want to run a successful company in 2021.
In accordance with the growth of your business, we provide flexible pricing packages. Regardless of where you are in the process, your startup is in good hands with our qualified bookkeepers who are keeping an eye on your finances. Get in touch with us right away to find out more about getting started with a group of the most adaptable startup bookkeepers available. We look forward to hearing from you.
What does a startup Bookkeeper do?
We bookkeepers will work with your business to produce accurate, current financial reports that you can use to control the expansion and cash flow of your enterprise. The fundamental tasks that we will carry out are the same as those that any other reputable bookkeeping provider would carry out, but we have created highly automated systems, and our team is skilled in handling the specifics of early-stage, venture-funded businesses.
Our account managers have a wealth of knowledge when it comes to assisting newly funded businesses with their bookkeeping and have years of experience. However, that experience enables our team to provide financial advice and assistance with due diligence that other accounting firms are unable to match. We go beyond simple, outsourced bookkeeping.
We believe the following services ought to be offered by startup bookkeepers to VC-backed, early-stage businesses:
- Recording Financial Transactions:
Your startup bookkeeper’s responsibility is to enter any revenue or expenses into the accounting software for your business. This most likely entails classifying the “transaction” in a manner that makes sense, such as classifying a payment to your payroll provider as a payroll expense.
We a pioneer in using automated systems to speed up this process and make it more affordable for our clients. Traditionally, all this work was done manually. Most of your company’s transactions can be quickly and accurately recorded by us without any involvement from you or your bookkeeper by combining commercially available accounting programs.
- Automation, however, is insufficient:
Early-stage businesses develop quickly, so it’s important to have a skilled bookkeeper or accountant review your books and financial records to ensure that the automated systems haven’t made any mistakes.
Automated systems may make mistakes at certain times, such as when employee benefits are altered. Depending on the stage of your business, our team is skilled at searching for errors.
- Revenue Recognition
A lot of businesses base the next round of venture capital they raise on their revenue growth. A variety of dashboards are frequently used by CEOs in their early stages to visualize their revenue. The difference between the CEO’s stated revenue figure and the revenue that is actually recognized in the financial statements will be investigated by savvy VCs.
It’s not as easy as it sounds to have the financial statements accurately reflect these dashboards! To track the revenue, we employ automated systems. But accurate accounting requires more than just data feeds, and our team is aware of the questions to put to our CEOs to get the details required to generate revenue in accordance with GAAP.
One of the main reasons startups switch to our services as their bookkeeper is incorrect revenue recognition. This is especially true for online bookkeepers with questionable accounting backgrounds who claim to do everything with “automation,” which is actually code for the founder having to code everything correctly.
- Accounting reconciliation:
Companies that raise venture capital must maintain accurate books; in fact, company executives frequently make a commitment to venture investors in the funding documents to deliver accurate financial records on a regular basis. The process of reconciliation is crucial in bookkeeping. At this point, your bookkeeper checks that the various records balance and that the money leaving an account (like the bank account for your business) matches the money that was spent.
Reconciliation is a crucial component of bookkeeping for funded businesses because investors (and potential buyers) demand accrual accounting and financials that closely follow GAAP. To accomplish much of this work automatically, we assist in setting up connected, automated systems. We take it a step further, though, and have our knowledgeable team perform multiple levels of reviews to see if there are any issues that the automated systems might have missed.
- Managing Bill-Pay:
Early-stage businesses must carefully manage their cash burn, and best-in-class bill pay gives founders the controls they need to protect their capital.
- Financial Statement Preparation:
The income statement, cash flow statement, and balance sheet are the three crucial financial statements that investors, board members, and seasoned founders want to see, typically once a month. These financial packets have long been prepared by bookkeepers, but more recent bookkeepers. For early-stage startups, we combine our services with best-in-class ready-made solutions to provide them with affordable, highly accurate financial statements and reports.
Software and financial packets only tell part of the story; not all founders have financial training. Our accounting team is skilled at elucidating the meaning of financial statements and the strategic implications of key metrics for startups.
What should you look for in a Startup bookkeeper?
A trusted advisor who understands their growth path is what startups need more than a robot to reconcile the accounts.
The best off-the-shelf and custom accounting software are used by our finance and bookkeeping team, which also includes seasoned startup accountants. Although we fully automate everything, we still have our experts monitor your finances to spot any errors the systems might make. Founders shouldn’t have to worry about carefully and correctly encoding financial transactions so that automated bookkeeping services don’t make mistakes.
We think it’s our team’s responsibility to help our CEOs save time and handle the fundamental bookkeeping duties that other services dump on their clients. Our team, in contrast to other startup bookkeeping services, deals with the complexities of early stage books and sets you up with good bookkeeping so you are prepared for VC and M&A due diligence – plus you’ll have the financial data you’ll need to grow your business.
Benefits of using our Bookkeeping Services:
When an acquisition is taking place, you don’t want your numbers to be erratic because venture capitalists don’t like it when the numbers for their portfolio companies change. We are completely devoted to startup business models, so we are aware of the subtleties necessary to get the numbers correct. We’re a pioneer in accounting automation, so we’ve seen the errors that automated systems commit. You require accurate books if you want your startup to succeed and become a unicorn.
Early-stage companies have short decision-making cycles. We are aware of the cash burn your business is experiencing and how crucial it is for you to have access to the financial information you need to make informed decisions. Our bookkeepers will consult with you to determine the financial delivery date that best suits your requirements.
- Expert Recommendation:
Our team adores working with startups, and we have the knowledge to support you in making crucial financial choices. Additionally, our recommendations can scale up with your business, from basic bookkeeping to part-time CFOs. We have former VCs on staff to help you get ready for your next funding round, and former IRS agents are on hand to help you as you consider the tax repercussions of selling your business. We also care more, which is another crucial advantage.
CEOs of startups lack the time to proofread their books. Every month, our team performs numerous reviews of the financial records of each client. We also comprehend the complexities (and significance) of issues like revenue recognition, ARR, capitalized vs. non-capitalized development costs, and other related ones because we are familiar with the business models of early-stage companies.
- Reduced Time Commitment:
Early-stage company CEOs are tasked with a huge number of tasks. The bookkeeping shouldn’t be one of them! The goal of our bookkeeping team is to take care of all the details so you can concentrate on expanding your company, finding a product-market fit, advancing your R&D, hiring new employees, etc. We want to make managing your finances as simple as we can because we recognize the strain of operating a rapidly expanding business.
Price sensitivity is understandable in early-stage companies. We provide a range of pricing options to make accurate bookkeeping services more accessible to startups. For more information, visit our pricing page.
Why choose us?
- Know-how and committed assistance: With a focus on assisting you in achieving your objectives, our finance and accounting experts. A dedicated Pilot finance team with knowledge of your sector, organization’s size, and stage is what you need.
- Experts working together under one roof: From operations to strategy, we provide complete financial support. Understand your financial situation, including where it is now and where it needs to go, so that you can make decisions with clarity.
- Partner who develops alongside you: According to your company’s needs, we tailor our engagement and level of support. At every stage of your journey, whether you’re just getting started or scalability quickly, we’re here to partner with you.
Keep an eye out for these typical bookkeeping errors for startups:
It’s not that difficult to do your own bookkeeping when you are small and have a small number of transactions, which is why we strongly advise startups with modest funding to do so. However, if you are handling your own books, there are several common bookkeeping errors you should be aware of.
- Even though cash enters your business, incorrectly recording equity investments as revenue is a bad idea!
- When it comes to procrastination, you must manage your finances.
- Using Excel instead of QuickBooks.
- Note that we find that many “automated” bookkeepers use cash accounting instead of accrual. This is primarily due to laziness.
- Not integrating payroll with QuickBooks for simpler accounting
- Not keeping track of vendor invoices and accidentally paying the same contractor or vendor more than once.
- Forgetting to charge clients.
- If they have stock options, they shouldn’t fill out 409A forms.
- Not filing income taxes.
- Failing to pay the Delaware franchise tax.
1. How should startups handle their accounting?
Reconciling the bank account against QuickBooks is thus one of the first steps when performing bookkeeping for startups. The remaining transactions will need to be entered into QBO after that, and other significant financial statement components will need to be reconciled. Doing “intra-month reconciliations” is something we advise.
2. Is hiring a remote bookkeeper for your bookkeeping a good idea?
Being the founder of a startup, managing your own financial data detracts from running your company, which should be your top priority. Due to this, an increasing number of early-stage and startup businesses outsource their bookkeeping. Cost-effectiveness of hiring a remote bookkeeper. You most likely don’t need a bookkeeper on staff full-time if your company is small.
3. Need accounting assistance for startups?
Even for startups who do require accounting assistance, they usually don’t require a full-time accounting department; instead, the majority of their requirements can be met by a part-time bookkeeper who records transactions and closes the books each month and an experienced startup tax accountant.