In some businesses, the bookkeeper sometimes also acts as an accountant. However, your mileage may vary with this approach, as most people who are hired for bookkeeping positions do not have the qualifications to serve as accountants. A CFO, or chief financial officer, is an executive-level position in charge of financial strategy. Throughout this article, we’ve said that your accountant can give you advice on Certified Bookkeeper many things. Through their experience, your accountant will have seen many different arrangements around financing, accounting methods, startup strategies, and more.

• The success of your startup is based on efficient budget management, balancing the books, and modifying financial strategies when needed.
• You’ll likely need more sophisticated reporting, stronger internal controls, and expertise in areas like tax planning and compliance.
• Your accountant can help you manage your finances to reach that goal.
• Using software that supports accrual accounting and generates GAAP-compliant reports can streamline this process.

Prepare Financial Statements

A good accountant, or your Bench bookkeeper, can help generate these reports and get a handle on your business’s financial health. And don’t just keep these items until you turn your forms over to the tax collector. You’ll want to hang on to most records for at least three years, though there are exceptions where you may want to keep your business’s financial records longer. Our intuitive software automates the busywork with powerful tools and features designed to help you simplify your financial management and make informed business decisions. Lastly, a startup accountant should have some knowledge or experience with your industry. Accounting for a new industry has a learning curve, and your startup does not have the time to wait while your accountant learns your industry’s unique needs.

Stay on top of all income and expenses

Figuring out how much you’re spending on each of them and the return on your investment becomes vital. Startup businesses can get by with the owner or a trained employee doing the bookkeeping to make sure that transactions are recorded properly as they occur. If you can only hire one person to help you with your financials, we recommend hiring an accountant and getting them to help you set up a bookkeeping system that you can maintain. In addition to choosing an accounting method, you’ll need to set up a bookkeeping system to track daily transactions. From payroll taxes to sales tax, failing to plan can result in penalties.

Explore Accounting Software Options

This consistent monitoring allows you to catch any discrepancies, adjust your strategies, and ensure you’re on track bookkeeping and payroll services to meet your financial goals. FinOptimal’s Accruer software can provide automated reporting and deeper insights. Explore FinOptimal’s partnership program or check out our career opportunities. Invoices are documents that list products and services businesses provide to their clients. The client has an obligation to pay the business for services rendered or goods sold.

Cash vs. Accrual Accounting Method

• Different vendors have different payment terms, so you should use this to your advantage.
• Company culture is very important to productivity, so you want to make sure you have someone who can contribute to your team’s cohesion.
• Consult a legal or financial professional for guidance on the best choice for your specific circumstances.
• No other kind of business is guaranteed to be as tumultuous as a startup.
• Please note, our expertise is not focused on LLCs or bootstrapped companies.
• It will be very important if a major corporation asks to acquire you for hundreds of millions of dollars, or if you are raising outside funding from a professional investor.

Startups aim to become big businesses, go public, or achieve another large outcome. As a result, startup accounting can be a bit more complex than that of a small business in the same industry. Smart accounting practices from the start set your business up for financial health. These best practices will help you stay organized, make informed decisions, and build a strong financial foundation. As a founder, you’re likely juggling multiple responsibilities, and it’s easy to let financial analysis fall by the wayside. It’s not just about knowing your bank balance; it’s about using that data to make informed decisions that propel your business forward.

Below, we’ll share some tips and best practices for setting up an efficient accounting system that grows with you. Keep paperwork (or digital records relating to taxable income or expenses) for at least three years. For instance, if you buy property such as real estate, cars, or computer equipment, you’ll keep the relevant records as long as you own the asset. We recommend QuickBooks for startup businesses because it offers a lot of functions at an affordable price.

Keeping Invoices

Knowing what benefits to offer is an often tricky calculus of weighing competitor offerings, costs to you, and costs to employees. You will need to manage human resources, mitigate risks, and satisfy employees, all of which will cost you money. Another issue you may run into as a startup, particularly if you operate with a remote team, is complying with tax laws across multiple jurisdictions.