Business Startup Accounting and Bookkeeping Services Made Easy

Starting a new business can be a thrilling experience, but it's essential to get the accounting and bookkeeping basics right from the start. One of the most critical decisions you'll make is choosing the right accounting method for your business.

Cloud-based accounting software has made it easier than ever to manage your finances. This type of software allows you to access your financial records from anywhere, at any time, and can help you stay organized and on top of your finances.

As a small business owner, it's not uncommon to wear multiple hats, but don't let accounting and bookkeeping be one of them. Outsourcing these tasks to a professional can help you focus on what you do best – running your business.

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As a startup, setting up your financial foundation is crucial for long-term success. You'll need to create a chart of accounts to organize all your financial records.

Having a clear chart of accounts will help you track expenses, revenue, and other financial transactions. It's a list of all the places where you'll record financial transactions.

For early-stage businesses, generating financial records can be manageable, especially if you're using accounting and bookkeeping programs that automate a lot of the work. You can DIY your startup's books with relative ease.

You have three main options for handling accounting and bookkeeping as a startup: building an internal team, supplementing internal work with software, or outsourcing to a service provider. Each option has its pros and cons.

Here are the three options summarized:

Kruze Consulting offers specialized bookkeeping services for startups, with a team of experienced accountants who have an average of 11 years of experience.

Their team handles the complexities of early-stage books and sets up clients with good bookkeeping to be ready for VC and M&A due diligence.

Kruze's finance and bookkeeping team combines experienced startup accountants with the best off the shelf, and custom built, accounting software.

They automate everything but have their experts keep an eye on your financials to catch the mistakes the systems make.

Kruze's services include financial planning, business strategy, and tax filing and compliance, all through a single provider.

Their accounting, controllership, and financial planning services cost significantly less than hiring and managing your own departments.

Kruze's team of financial professionals can scale as your startup grows.

Their clients gain a competitive edge by leveraging the best automated fintech and accounting platforms available.

Kruze Consulting has earned accolades for their innovative approach, utilizing both in-house and third-party technologies.

Their thought leadership in AI has been featured in major publications like The New York Times, The Information, and Newcomer.

Kruze's team deals with the complexities of early stage books and sets you up with good bookkeeping so you are ready for VC and M&A due diligence.

Their clients have access to expert advice and guidance from seasoned CPAs and financial professionals.

Kruze's services are designed to save startup founders time and take care of the basic bookkeeping tasks that other services dump onto their clients.

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Recording financial transactions is a crucial task for startups, and it's best done by a professional bookkeeper. This involves categorizing transactions, such as payments to payroll providers, as payroll expenses.

Automated systems can speed up this process, but they're not foolproof. A human bookkeeper or accountant is needed to review the books and catch any errors that automated systems might make, especially when it comes to employee benefits.

A good bookkeeper will also prepare financial statements, such as income statements, cash flow statements, and balance sheets, which are essential for investors, board members, and experienced founders.

Here are some key accounting and bookkeeping tasks that startups need to focus on:

By outsourcing accounting and bookkeeping tasks, startups can gain scalability and flexibility, allowing them to add or remove services as their financial needs evolve.

Maintaining accurate books is crucial for any business, especially for early-stage companies that have or are going to raise outside venture capital or seed funding. It's not just about having a good bookkeeper, but also about having the right systems in place to ensure accuracy.

Companies that raise venture capital need to have accurate books, in fact, a company's executives typically promise recurring delivery of accurate financial records to venture investors in the funding documents. This means that bookkeepers need to reconcile different records to ensure that the money leaving an account matches the actual money spent.

Reconciliation is an especially important part of bookkeeping for funded companies, since investors and potential acquirers expect accrual accounting and financials that are close to GAAP. To achieve this, Kruze helps set up connected, automated systems that help do much of the work automatically, but also has an experienced team that does several levels of reviews to catch anything that the automated systems might miss.

A good bookkeeper will also set up a chart of accounts, which lists every account where you'll organize all the records of expenses, revenue, etc. on your general ledger. This is a list of all the places where you might want financial transactions to be recorded.

Bookkeepers also need to record financial transactions, such as revenue and expenses, into your company's accounting system. This involves categorizing the transaction in a way that makes sense, like a payment to your payroll provider as a payroll expense.

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Here are some reasons why good bookkeeping matters to early-stage companies:

• Know where you are spending your money so you can manage costs, control your burn and look good to investors

• Good books mean you can move fast during VC and M&A due diligence - and being able to share your financials quickly with strategic partners inspires confidence

• A good accountant helps you make sure you're collecting your revenue and not over-paying vendors, reducing your burn rate

• Solid record keeping means you can cut your burn by capturing an R&D tax credit - this could save your startup up to $250,000 a year

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Using a spreadsheet can help you keep track of your personal expenses, such as your daily coffee habit, which can add up to $20 per week.

You can set up a spreadsheet to automatically calculate the total cost of your expenses at the end of each month.

Spreadsheets can also help you create a budget by breaking down your income and expenses into categories, such as housing, transportation, and entertainment.

By using formulas, you can easily see how much money you have left over each month for savings or debt repayment.

For example, if you have a fixed income of $4,000 per month and your total expenses are $3,500, you can calculate how much you have left over for savings or debt repayment by using a simple formula.

Using a spreadsheet to track your personal finances can help you stay organized and on top of your spending, making it easier to achieve your financial goals.

A startup bookkeeper is not just a robot that reconciles accounts, but a trusted advisor who understands your unique growth path. This is especially important for startups that are navigating complex financial situations.

Kruze's finance and bookkeeping team combines experienced startup accountants with the best accounting software, automating tasks but also keeping a close eye on financials to catch any mistakes.

Founders shouldn't be burdened with making sure financial transactions are correctly coded, as automated bookkeeping services can make mistakes. This is where a team of experts comes in, saving CEOs time and taking care of basic bookkeeping tasks.

Kruze is a CPA firm, which means they are held to a higher standard of accuracy and offer a superior range of services compared to small business bookkeepers and technology-enabled bookkeeping service providers.

A CPA firm like Kruze has a team of licensed, trained, and experienced accounting professionals who are knowledgeable about GAAP based accounting, tax rules, and high-growth startup finance.

Here are some reasons why founders choose Kruze:

With reasonable, fixed fee pricing plans, startups can get CPA level expertise for the cost of what most technology-enabled bookkeeping service providers charge.

Outsourcing can be a game-changer for new businesses, offering a unique blend of upside and affordability.

Outsourcing accounting services can save you a significant amount of money, especially for tasks like bookkeeping, which typically range from $100 to $500 per month.

Check this out: Benefits of Outsourcing Bookkeeping and Accounting

Having a virtual CFO can cost between $1,000 to $5,000 per month, but it's worth it for the strategic financial guidance and high-level decision-making support.

You can expect to pay anywhere from $500 to several thousand dollars per month for more advanced accounting tasks such as financial statement preparation, tax filings, and advisory services.

For a small business, outsourcing can be a cost-effective way to get the financial support you need without breaking the bank.

Here are some estimated costs for outsourced accounting services:

By outsourcing your accounting and bookkeeping services, you can focus on what you do best – running your business.

Setting up a business requires some paperwork, but don't worry, we've got you covered. You'll need to file the necessary documents, such as the Articles of Organization or Articles of Incorporation, with the state where you plan to organize.

First, check if your preferred business name is available using the Michigan Search for Business Entity page. This is a crucial step to avoid any potential issues down the line.

We'll help you obtain a Federal Tax Identification Number from the IRS, which will allow you to open a bank account and start managing your finances. This is a necessary step for any business owner.

You'll also need to register your business for sales tax and any other required taxes. We'll provide support in this process to ensure everything is taken care of correctly.

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To set up a solid accounting and bookkeeping system for your startup, you'll want to start with the basics. Incorporate as a Delaware C Corp and set up a standalone bank account to keep your finances organized.

QuickBooks Online is a top choice for early-stage companies, offering a user-friendly interface and comprehensive features that integrate with other business systems. It's effective for most startups, but you may want to consider other options like Xero, Zoho Books, FreshBooks, or Wave, depending on your specific needs.

When choosing accounting software, consider your business needs, budget, ease of use, integrations, scalability, and customer support. Make a list of your must-haves and nice-to-haves to help narrow down your options.

Some popular accounting software options for startups include:

Automating bill pay is crucial for early-stage companies, and options like bill.com, Ramp, and Brex can help you manage your burn and preserve cash. An automated bill pay system integrates directly into accounting software, minimizing data entry and saving your startup bookkeeper time.

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For most young companies, hiring an outsourced bookkeeping firm is often more cost-effective than bringing on a full-time hire.

Look for firms with deep experience in the startup ecosystem, as they'll understand the unique metrics and financial rigor required to attract and retain investors. You want a firm that provides a dedicated accountant for consistency and clear communication, rather than a rotating cast of advisors.

When interviewing firms, talk directly with an accountant, not just a salesperson, to get a clearer sense of the team's approach and capabilities.

When you're running a startup, you need to prioritize your time and resources carefully. Most very-early stage startups don't need a third-party accountant. Assuming you have bookkeeping software like QuickBooks Online set up, it makes sense for one of the founders to DIY the books until the company has raised a reasonable amount of funding.

Typically, this is when a company has raised over $250,000 in funding and has 6+ months of runway. At that point, it's more productive for the founders to focus on growing the business, and let an experienced accountant handle the financials.

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If you plan to raise real Angel and VC capital, you'll need to incorporate as a Delaware C Corp. Venture Capitalists typically don't invest in LLCs and S Corps, so this is your best option.

Incorporating as a Delaware C Corp is a must if you're raising money from professional or experienced investors. This is because they prefer the structure and flexibility it provides.

Venture Capitalists often have specific requirements, and a Delaware C Corp meets their needs. This makes it a great choice if you're looking to secure funding.

LLC and S corp structures are suitable for family-owned businesses that won't be raising VC capital. They offer a more straightforward and cost-effective option for smaller operations.

Hiring a professional can be a daunting task, but with the right approach, you can find the perfect fit for your startup. Consider hiring an outsourced bookkeeping firm, as it can be more cost-effective than bringing on a full-time hire.

Look for firms experienced with venture-backed startups, as they'll understand the unique metrics and financial rigor required to attract and retain investors.

Prioritize firms with deep experience in the startup ecosystem, and make sure they have expertise in supporting rapid growth, handling complex reporting, and setting up new systems.

A good bookkeeper should also know what investors will look for in board meetings or in diligence sessions. This includes having an in-house tax team to handle compliance and diligence directly.

Additional reading: Angel Investors for Small Business

You want a firm that provides a dedicated accountant for consistency and clear communication, rather than a rotating cast of advisors. Ensure there's a backup plan in case your primary contact is unavailable.

When interviewing firms, talk directly with an accountant, not just a salesperson – this gives you a clearer sense of the team's approach and capabilities.

Financial Planning and Management is a crucial aspect of any business, especially for startups. It's essential to have a solid understanding of revenue and finance automation to make informed decisions.

You can automate tasks like billing, revenue recognition, and tax to save time and reduce errors. For example, you can use billing subscriptions and usage-based billing to manage your revenue streams efficiently.

Automating tasks like invoicing, data pipeline, and data sync can also help you stay on top of your finances. You can even use online invoices to send and track payments easily.

For another approach, see: Crm Accounting and Billing Software

To prevent fraud and optimize acceptance, you can use tools like Radar for fraud prevention and Authorization for acceptance optimizations. This can help you reduce financial risks and increase revenue.

By working with an outsourced team of experts, you can gain customized insights into your financial data. They can help you analyze account statements, identify cash flow concerns, and budget for growth.

Here are some key areas to focus on for financial planning and management:

Working with an outsourced team of experts can help a startup make more efficient progress toward key goals.

They can analyze account statements for cash flow concerns, helping you identify potential issues before they become major problems.

In the initial stages, many startups are still learning how to read and take action on financial data.

By outsourcing this work, you can tap into the expertise of professionals who know how to extract valuable insights from financial data.

An outsourced team can also help you budget for growth, ensuring that you're prepared for the financial demands of expansion.

This can be a game-changer for startups that are struggling to manage their finances in-house.

For another approach, see: Venture Capitalists for Startups

Revenue and finance are crucial aspects of any business, and getting them right can make all the difference.

Automating revenue recognition is a game-changer, and Kruze uses automated systems to record revenue. This helps ensure accuracy and efficiency.

Revenue recognition is not just about data feeds, but also requires asking the right questions to get the information needed to produce GAAP revenue. This is where an outsourced team of experts can be incredibly valuable.

Here's a breakdown of the key areas of revenue and finance automation:

In-person payments can be handled through terminal, while fraud prevention can be achieved with radar. Acceptance optimizations can also be improved through authorization.

A customized team of experts can help analyze account statements for cash flow concerns and budget for growth. This can be a huge time-saver for startups, allowing them to make more efficient progress toward key goals.