Startup CPA Startup Accounting, Tax, Finance, & Consulting For Entrepreneurs

As CPAs, we have a deep knowledge of the unique needs of startup companies and we understand the latest AI and accounting automation tools. Our professional accounting team works extensively with AI-enhanced financial platforms like Brex, and Ramp. We’ve served as beta testers and on customer advisory boards for the most significant AI tools for startups, which means we not only understand AI tools, we helped shape their development. Study the market, assess the competition and consider whether to open an office, work from home, or start your business in a different area with more opportunities. You often can begin your auditing business on a part-time basis while you build clients. Sharing an office with other professionals provides strong prospects for clients in-house.

The first-time audit: Signaling a new stage

I say “exclusively” because I have seen startups achieve great success in a fully remote setup. Still, the early days of startups rely critically on serendipitous conversations and ideations — and that can only happen when employees are colocated. Successfully growing a startup is a marathon (see mistake No. 2). Short-term wins offer little beyond dopamine hits and the stroking of egos.

Side Note: What is the Difference Between a Bookkeeper and an Accountant?

Companies that focus there can ride waves of market growth while avoiding fierce competition, by turning potential competitors into actual customers. Some of the most valuable companies in the world have taken this approach (including the two most valuable) and it has paid dividends (literally). Swedish startup Oxide AI offers Oxogen, an AI investment insights platform that uses AI to provide individualized financial analysis and research. NeuralShift also ensures data security and compliance to safeguard private data during processing. Its AI-powered methodology improves accuracy, streamlines legal procedures, and facilitates quicker decision-making in legal operations.

Some aspiring entrepreneurs combine auditing with other services like accounting, consulting, retail sales, Internet marketing or IT services. Make sure that the prospective auditing firm has a strong and loyal client base, and audit the firm’s finances or franchise agreement carefully because it will be one of the most important jobs you ever do. The upshot is that financial statement audits are seldom “one and done.” Instead, they are a commitment that requires an ongoing investment of time, resources, and labor. Through this investment, EGCs often experience improvements in many areas including record retention and segregation of responsibilities. By following these tips, growth companies may position themselves for a successful first audit and the ability to take on the demands of an effective ongoing audit process.

Not only are these necessary for running a highly functioning business, but companies that have a good accounting system, process and data de-risk VC due diligence (and improve the odds of surviving an audit by the IRS). At BackingCorp, we offer Startup Compliance Auditing Services to help emerging growth companies (EGCs) stay on track with regulatory compliance requirements. We understand that compliance can be a complex and time-consuming process, particularly for startups and small businesses with limited resources. Our team of experts can help ensure that your organization is meeting all regulatory requirements, including those related to financial reporting, data privacy, and other key areas. We are one of only a few outsourced accounting firms that specialize in funded early-stage companies – we only offer financial and tax services to fast growing startups in the Pre-Seed, Seed, Series A, Series B and Series C stages.

If that requires pivoting from what you know and are comfortable with, so be it. One of the easiest ways to get discouraged while running the startup marathon is to compare your rough drafts and works-in-progress to polished success stories. All difficult tasks (be they entrepreneurial, creative, educational, etc.) require iteration and more iteration, revision and more revision. The mistakes along the way are countless, sure, but they are startup auditing firms also priceless. Comparing a work-in-progress to the finished products we see every day is not only demotivating — it’s also disingenuous.

Bookkeeping

• Yes, venture-backed high-growth businesses should have as close to GAAP financials as possible.
• Yet while there are many times a team needs the space to think, build, and iterate without undue pressure, there are just as many instances that benefit from the structure and direction provided by arbitrary deadlines.
• There is a big difference between being at a local minimum and being at a global one.
• Context-switching carries a real cost, and early-stage employees who fail to delegate responsibility often end up performing all tasks poorly.
• Your employees will see through the euphemisms, rendering your sugarcoating fruitless, and they will respect you less for your lack of directness.
• Manage lengthy information requests more effectively by tackling submission deadlines collaboratively.
• If necessary, engage reputable accountants to handle recognition and documentation appropriately.

When working with a non-Big Four, make sure to do reference checks, and to consider industry specialization and familiarity with your particular business model. If you’re a SaaS company, look at a firm closely to make sure that they’ve worked with other SaaS companies in the past. And more importantly, have they worked with other SaaS companies that have grown fast or scaled through product-led growth? If your company is focused on enterprise sales, then you’ll want a firm that can recognize and analyze enterprise contracts. Think about domain, but think about your go-to-market strategy too, and find a firm that aligns in each category.

Customer moment: How Hathora uses Treasury for growth-focused cash management

This is a massive tax credit that your company should take advantage of. Tax season, two dreaded words for anyone, nevermind for a founder. However, if you are organized from the start, know what documents to have and keep good records, it may not be that bad. You could always hand it off to the professional certified public accountants (CPAs) if you just don’t want to deal with it.

• We set startups up for fundrising success, and know how to work with the top VCs.
• Being disingenuous about the state of the business or the rationale for business decisions will hurt your company over the long term.
• The upshot is that financial statement audits are seldom “one and done.” Instead, they are a commitment that requires an ongoing investment of time, resources, and labor.
• Most companies work with Graphite for long periods of time, as our service is extremely scalable and cost-efficient.
• Since 2016, we’ve provided hundreds of growing companies a dedicated team of experienced startup accountants and CFOs who serve as their complete or supporting in-house accounting & finance department.
• We are one of only a few outsourced accounting firms that specialize in funded early-stage companies – we only offer financial and tax services to fast growing startups in the Pre-Seed, Seed, Series A, Series B and Series C stages.
• These safeguards reinforce financial integrity internally and provide external auditors assurance.

Whereas a traditional small business focuses on their bank account balance, startups focus on the KPIs that help them raise their next round of funding. Choose an advisor who “gets” early-stage, Silicon Valley-style businesses. Accounts payable (AP) is the money your business owes to its vendors for providing goods or services to you on credit. Different vendors have different payment terms, so you should use this to your advantage. But remember, in accrual accounting, if you use a service/get invoiced by a vendor, you’ll see it on your income statement even if you haven’t paid them yet – thus, making your operating loss different from your cash burn. So we don’t recommend that level of complexity for your seed stage model – just the IS and the cash position (maybe working capital or inventory).

Networking with businesses who use your kind of auditing service and asking clients directly for referrals also work well when promoting professional services. Professional certifications, testimonials and transparent backgrounds are important when you’re asking people to trust you with confidential information and the financial details of a business. If you plan to offer financial auditing, CPA accreditation is required by most states. If you plan to conduct energy audits, accounting and Certified Professional Environmental Auditor certifications will make your service more attractive to business clients. Other certifications include Certified Internal Auditor, Certified Information Systems Auditor, Certified Fraud Examiner and Certification in Control Self-Assessment.

During diligence your company will probably face a lot of short turnarounds, and having an accountant supporting you during these urgent requests for financial information can be invaluable. In addition, other emergencies can require assistance from accounting. For example, human resource situations that involve terminating employees can require calculating severance and running payroll, and your accountant can help during these difficult circumstances. We typically recommend that bootstrapped companies, or ones that have raised less than a quarter of a million dollars in funding, DIY their basic financial work until it becomes too burdensome for the founder to handle. Of course, having the right systems set up can dramatically lower the amount of effort required; we’ll get to those systems in a moment. As founders and dollars race to build in competitive, high-growth markets, opportunities often exist in “hidden layers” of industry.