The Top 5 Bookkeeping Services for Startups
Written by Amanda Bower | Published: December 12, 2023
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If you’re running a startup, you know how unique the dynamic business environment is. But with all the ups and downs, keeping track of your finances and maintaining a solid financial foundation can be challenging.
The truth is that startups face financial challenges distinct from other types of businesses. You need to streamline your financial management, reduce errors, and ensure compliance with legal and regulatory requirements, among other things. This only comes from airtight bookkeeping practices.
So, if you’re considering bookkeeping services for your startup, you’ve come to the right place. In this guide, we’ll explore everything you need to know about them and provide you with a curated list of the best providers to choose from.
Why Do Bookkeeping Services for Startups Matter?
If you’re like most startup decision-makers, you know something about handling things on your own. Startups are notoriously DIY environments, and data shows us startup owners can spend about 40% of their working time on tasks that don’t directly generate income, such as hiring, HR, and payroll.
And when it comes to bookkeeping specifically, research shows that about 64% of small business owners handle this task all on their own. That means leaders are crunching numbers, tracking payments and invoices, managing employee expenses, and reconciling bank charges.
Unfortunately, that leaves a lot of room for error. If you’re ready to ditch the DIY route and get your finances in order, here are a few key reasons bookkeeping services can benefit a startup.
Founders and Key Players Get Their Time Back
As we just discussed, bookkeeping can be time-consuming for whoever handles these tasks, whether a founder or another high-level individual. When you have to put aside revenue-generating tasks to do slower, tedious ones (such as organizing transactions and tracking expenses), it can slow down your entire business, plain and simple.
Bookkeeping services for startups are comprehensive, accurate, and, most importantly, low-touch. This frees up your people to focus on bigger, bolder tasks.
Bookkeeping Can Quickly Grow in Complexity
If you’re a small operation working out of your apartment or a garage, it might seem easy to manage the books on your own. Sure, you need to track spending, monitor your cash, and run totals on the balance sheets, but it’s not too much of a lift…at first.
But as your business grows, those “simple” tasks can suddenly explode in time consumption and importance. When handling more money and transactions are getting bigger, you don’t want a simple math error to run your business into the ground. Expert bookkeepers won’t let that happen.
A Startup’s Resources Are Valuable
Sure, financial resources matter for all businesses. But larger corporate entities might operate with years of runway and tons of financial padding, while startups operate in a different environment.
For example, less than 40% of startups operate with at least 12 months of runway. This means cash flow needs to be constantly monitored and done accurately for a startup to succeed. For this, exceptional bookkeeping services are necessary.
Good Bookkeeping Can Help You Grow
Solid bookkeeping isn’t just necessary for survival; it’s essential for growth. With robust bookkeeping services, you’ll have an excellent handle on volatile cash flows, make accurate financial forecasts, and use your bookkeeping data to guide your decision-making process. This ultimately helps your business expand.
What to Look for in Startup Bookkeeping Services
Being a startup is a roller coaster ride of emotions. It’s thrilling to see your idea take shape, but managing everything on your own can also be overwhelming. But don’t worry, there are plenty of startup bookkeeping services out there that can help you stay on top of your finances.
Let’s explore what to look for in a bookkeeping service so your business can succeed.
Core Bookkeeping Services
Of course, managing the books is the central component of bookkeeping services for startups. This involves monitoring cash inflows and outflows, recording financial transactions, and working with the balance sheets. For startups specifically, the best services will include consistent monitoring to keep you abreast of any notable changes or developments.
Bank Account Reconciliations
Don’t let banking errors get in your way. With bank account reconciliations, your service partner will double-check your books to the bank’s records so everything checks out.
Credit Card Reconciliations
Credit card transactions also need to be recorded properly for everything to be up to snuff. Your bookkeeping partner will happily comb through your credit card statements line by line, so you don’t have to.
Employee Expense Management
Employee expenses shouldn’t burn a hole in your wallet or be a headache. This service typically involves tracking receipts, ensuring employee expenses are reimbursed on time, and checking that all receipts are properly accounted for.
Accounts Payable Management
A/P management is a crucial part of every startup and involves tracking and managing the money your organization owes to other entities (such as suppliers, contractors, and creditors). These expenses are essential to business growth, and your bookkeeping partner will guarantee you never skip a beat regarding debts.
Fixed Asset Accounting
Startup investments don’t just include funding rounds; you also have long-term investments, such as property and equipment. Your bookkeeping partner will ensure they’re always considered within your projections and financial reporting.
Monthly Financial Reporting
Monthly financial reporting is essential for a startup that wants to stay financially on track. That’s why your bookkeeping partner will give you clear, accurate reports so you can keep a close eye on income and costs.
Pick Your Partner: The Top 5 Bookkeeping Services for Startups
Now that you know how bookkeeping services for startups can make a huge difference in your operations and what to look for in a partner, here’s our list of the top services out there right now.
Yes, we’re kicking off this list with ourselves, but only because we’re wildly dedicated to top-tier bookkeeping for startups and think you might want to hear what we have to say.
We’re hiline, and we provide financial services specifically to startups (and other fast-growing businesses), and bookkeeping is one of our specialties. We’re more than just accountants: we’re a comprehensive financial solution and offer services dedicated to helping your startup grow.
Our bookkeeping services provide you with rapid, accurate information you can rely on, and we’ll help you leverage your books to take advantage of financial opportunities. Ultimately, our team provides precise insights and advice to help your team make better decisions.
Zeni offers different startup services, including basic and full-service bookkeeping and a CFO plan.
Kruze Consulting offers bookkeeping for startups and says that “solid financials help de-risk your startup’s next venture capital round.” They’re led by Vanessa Kruze, a “startup expert.”
Bench offers bookkeeping services and says they “give you a team of bookkeepers to do your books and simple software to keep track of your financials.”
Less accounting says they offer “smart bookkeeping,” which is “powered by professionals” and “backed by technology.” They say they’ll reconcile your accounts, “provide you with clean books every month,” help with your records for tax filing, and track your business’s financial health.
Don’t Let Your Books Hold You Back
For a startup, bookkeeping should be an asset, not a drag. That’s because this valuable information can help leaders and decision-makers understand how their business is performing financially and use it to make strategic decisions. Understanding your revenue, expenses, profits, and cash flow can help you make strategic moves to set your business up for success.
If you’re ready to partner with a bookkeeping service dedicated to your success and take your business to the next level, let’s talk.
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