Accounting for startups

A chart of accounts built for a startup's actual spending pattern, engineering payroll, cloud infrastructure, customer acquisition cost, rather than a generic small-business template. A written accounting policy covering basis (cash versus accrual), revenue recognition, and how equity-related transactions get recorded. Monthly bookkeeping and close from formation forward, so there is no backlog to reconstruct later. Burn rate and runway tracked and reported alongside standard financial statements. Equity-related entries, option grants, note conversions, new round proceeds, kept consistent with the cap table your legal counsel or platform maintains. Underlying documentation for qualified research expenses tracked as part of normal bookkeeping, ready for your tax preparer at filing time.

We start at formation, or as close to it as we are engaged: setting up the chart of accounts, the accounting policy, and the software stack before the first transaction is recorded, so nothing needs retrofitting. Each month runs the same close: bank and card reconciliation, revenue and expense categorization against the chart, burn rate and runway calculated from the actuals, and a standard financial statement set delivered on schedule. Equity events, an option grant, a SAFE conversion, a new round closing, get their own review pass to confirm the accounting matches what the cap table now shows. Once the company approaches a raise or a diligence process, we prepare the historical financials into a data-room-ready format ahead of the request rather than in response to it.

Any US startup that has raised outside money, plans to raise within the next year, or has hired beyond the founders. Pre-revenue is not a reason to wait; the moment a company has taken investor capital or brought on its first hires, the books need to hold up to a level of scrutiny that a founder's own spreadsheet was never built for. This fits venture-backed software and SaaS companies most often, but applies equally to any startup structure, a Delaware C corp, an LLC taxed as a partnership, that expects to raise or exit.

The most frequent issue is books that were kept accurately enough for the founder's own purposes but were never built to survive an outside reviewer, missing supporting documentation, inconsistent categorization month to month, or a chart of accounts that does not map cleanly to how investors expect a SaaS or product company to report. The second is equity accounting that has quietly diverged from the cap table, usually after a note conversion or a new round where the accounting entry was made months after the legal paperwork closed. The third is burn rate and runway calculated informally in a spreadsheet that does not tie back to the actual bank balance and monthly actuals, which erodes trust with the board the first time the numbers do not match.

A profit and loss statement tells you whether the company is profitable. For a venture-backed startup that is usually not the point yet. Burn rate, net cash spent per month, and runway, months of cash remaining at that rate, are the numbers a board actually wants in every update, because they answer the question that matters: how much time does the company have, and does that timeline match the plan discussed at the last raise. We calculate both from actual bank activity, not a projection, and present them in the same board-ready format investors expect to see across their portfolio, so an update does not require translation.

QuickBooks Online and Xero cover most early-stage startups well, with Ramp, Brex, or Mercury handling card spend and syncing directly into the ledger. As transaction volume and headcount grow, NetSuite becomes the more common landing point, particularly once multi-entity structures or more complex revenue recognition enter the picture. We set up whichever stack fits the company's current stage rather than over-building tooling a five-person company does not need yet.

Pricing depends on transaction volume, entity structure, and how much investor-facing reporting (burn, runway, board packs) is included alongside standard bookkeeping and close. Startup engagements often start smaller and scale with headcount and funding stage. Current tiers and the point at which a company moves into a higher plan are published on the pricing page, with your exact scope confirmed in writing before work begins.