I’m a CPA, and in the past I’ve worked at Deloitte Tax and I was the Controller of a 120+ employee startup. Our COO Scott Orn is a Kellogg MBA, former VC Partner at Lighthouse Capital Partners, and before that was an investment banker at JPMorgan’s technology group. Our tax leader is a CPA – and is an expert on R&D tax credits (a great way for unprofitable companies doing a lot of engineering and R&D work to reduce their burn rate). Our Vice President of Financial Planning and Analysis has an MBA from Wharton and used to be a VC, and an exec at several companies that raised a ton of venture funding.
- Second, being a licensed CPA firm, you can grant us the legal right to perform business tasks on your behalf.
- Not only can we answer those questions, but we do it in a timely fashion, so you can focus on the day-to-day.
- Pricing your abilities based on knowledge is not only good for your business but is ultimately valuable for your clients as well.
- CPAs specializing in forensic accounting assist with disputes or litigation.
- An accountant must have a bachelor’s degree, but they’re not required to have a certification or license.
Early-stage companies are not all the same – a SaaS business is very different from a biotech company, and a hardware company is not at all similar to an ecommerce company. Some CPAs are specialized in particular verticals – ours is high-growth, VC-backed companies. From SaaS to healthtech to hardware to ecommerce, we have specialized CPAs and accountants on staff who can help your company navigate the VC landscape and manage your growth. For the most part, a simple online presence is relatively easy to start with minimal start-up costs. And while an online presence won’t guarantee an increase in exposure, not having one can have a negative impact and can discredit you to a potential client. In many cases, website and social media become an augmentation to your word of mouth referrals.
Especially when the experience sets for an accountant is specific and narrow. And credentials such as CPA, EA, attorneys, and state certifications (when required) are all still attractive to firms looking to hire. Accounting and bookkeeping services (as well as other service lines, such as simple tax preparations) are almost universally charged as a fixed fee, and there is a market expectation for that pricing structure. An accounting firm can do almost everything a CPA firm can do with one exception – audits and assurance services. So, if that is a part of your goals or your target market, then it’s probably wise to think about the steps needed to become a CPA. Additionally, you’ll have to think about the day-to-day needs of running a business, including managing risk, basic administrative tasks, and general questions of how and where you will meet clients.
Accounting Services
So, the simple answer to the question is, yes—many accountants can and do work from a home office. When compared to traditional small businesses, early-stage technology startups have nuances that they need to consider when putting together their financial statements and chart of accounts. Often, I find that entrepreneurs have used a financial model to assist them…
The difference between a CPA and a general accountant boils down to certification and skill set. Here, we break down how a CPA can help you and how to go about finding one who’s a good fit for your startup. While the cost savings of doing your own books may be appealing, the reality is that not using a professional bookkeeper for your startup may cost far more than you save in the long run.
Here at Thomas Huckabee CPA, we understand the challenges startups’ face and how important it is to acquire users and paying customers as quickly as possible. As a startup founder your main focus is usually on marketing, operations, getting traction and understanding if you have the right ‘product market fit’. By hiring an outsourced accounting firm you can focus on your core business activities which include building your product, developing relationships, creating partnerships, and marketing and sales.
Even if the firm is starting up, its partners should provide references and previous work experience pertinent to the industry and experience. Even if this is the firm’s first time working with a particular industry, determine if the firm has worked with related sectors and can apply that experience to the needs of the business. Startups often face unique accounting and financial challenges at every stage of their growth.
Who are the best CPAs for startups?
They have been responsive, flexible, and incredible partners to work with since our Seed round, and we have scaled with us even as we more than 6x’d the company. Seeking the help of a startup CPA can be a great way to help you navigate the financial and business challenges and avoid costly mishaps so you can concentrate your efforts on other important tasks—strategy, growth, and scaling. Plus, there are specific times when it makes sense to consult with a CPA—for example, to help you handle growth transitions, such as hiring employees or taking on more office space. They can look after specific details (payroll, employee tax management, property tax, utility payments, and so on), leaving you with time to look at the bigger picture of the way your business is thriving. CPAs typically cost about 15% to 20% more than their unlicensed counterparts, due to their additional training and continuing education requirements. They can interpret your financial records for everything from making sure you pay the right amount in taxes, to making strategic business decisions based on your financials.
However, industry and consulting firms list accounting firms as one of the single most profitable small businesses a person can start right now. First, if you have a VC-backed startup, chances are you can expect growing pains. Whether it’s from an M&A, a new loan, or a complete comprehensive financial record for a new board member to feel at ease. No matter the scenario, there will be myriad due diligence experts with seemingly endless questions – and if you think the questions will be worded in plain English, think again. On the surface this may appear as tedious busywork, but given tight deadlines, it can quickly become a full-time job just to qualify for a round of funding that will keep the lights on for another month. Not only can we answer those questions, but we do it in a timely fashion, so you can focus on the day-to-day.
If an emergency or urgent need arose, how responsive would the firm be? Availability needs to be the first topic addressed when establishing an agreement with a new firm. Some partners handle sales and new business at many firms, then pass actual work on to others. In addition, if you’re considering going public, it’s a smart move to have your accounting in order before you file your registration statements. Because your CPA would be handling sensitive business data, it’s essential that you ask the right questions before you hire them, rather than finding out they aren’t a good fit for you when it’s too late. Sign up below to receive our free eBook on accounting, finance, and tax topics that every startup needs to be aware of to help avoid surprises and headaches down the road.
Any CPA you work with should have experience working with businesses in your vertical. They should be familiar with the financial modeling, tax requirements, and reporting for your industry. They should also have knowledge of your internal operations and other nuances to help reduce your tax liabilities or mistakes that could trigger an IRS audit. If you don’t legally need an audit but would still like an analysis of your financial records, you can opt to instead have a review, which is considered a moderate level of assurance.
What does a CPA do?
If you are trying to reach out to potential investors or raise funds then you will need to have high-quality financial statements which are essential for tax reporting and providing updates to them. One of the best changes in innovative accounting firms is structuring fees based on the firm’s value to the business or entrepreneur. Suppose a firm can provide a fee structure that best fits the model and value provided to the entrepreneur or business and serve as a growth partner rather than just another vendor.
- Our startup solutions range depending on what stage you company is in.
- Some CPAs are specialized in particular verticals – ours is high-growth, VC-backed companies.
- However, once the business is up and running, it’s common to be unprepared for typical day-to-day operations.
- Get in touch and we’ll reach out to you to schedule a video call to better understand your tech startups needs and prepare a custom quote.
Companies that have raised seed and venture capital are not like other businesses. They need finance and tax advice from a CPA who understands the unique needs of high-growth, often times unprofitable, companies. Embarking on a new business venture is an exciting and demanding time for a new startup entrepreneur. Most founders have plenty of expertise in the industry field areas, however, accounting and administrative matters may not be their strength. Thomas Huckabee CPA, has been a trusted advisor to hundreds of startups and small companies through their early growth stages. We offer a complete suite of financial, CFO, tax, valuation and consulting solutions for startups at every stage of their development process and they can be customized to fit the exact needs of your business.
ACCOUNTING, TAX, FINANCE, & CONSULTING FOR ENTREPRENEURS
We offer personal service and actionable money saving advice to founders looking for a more hands-on CPA Firm. During this process, your CPA can make inquiries, perform physical inspections, verify balances, and run other tests to confirm your financial statements are free from material misstatements. While passion and hustle can go a long way when starting a new business, smart planning is essential to survival. Poor financial planning is one of the top reasons that startups fail, so the sooner you take ownership of your startup’s financial health, the better.
Already Up and Running
We have a long history with startups and many of our CPAs specialize in specific verticals and business groups. As you wrapped up the 2022 books for your startup, you probably did some high-level financial review and analysis. Looking over key documents like your profit and loss statement, you get a better idea of what’s driving revenue — and where you’re spending. Get in touch and we’ll reach out to you to schedule a video call to better understand your tech startups needs and prepare a custom quote. How available are the members of the firm, even during the busy tax season?
The more effective a business is in this core competence, the more a company saves in time, costs and continues to fuel further growth. For tax planning purposes, your CPA should have extensive knowledge of R&D tax credits and startup tax incentives. If you’re a venture-backed startup, your CPA must have a solid understanding of the fundraising process and cap table management to manage your financial statements. We also pride ourselves on being tax-nerds, and being up to date on tax laws and credits that can help our clients lower compliance costs and reduce their burn rate.
Given that Kruze’s CPA services are priced similarly to many of the low-cost, “automated” bookkeeping services, a better question is why wouldn’t you use a CPA when you can likely get one for about the same cost as a basic bookkeeper? Business owners love Indigo for the clarity and simplicity we bring to the process of reducing your tax burdens. Niches, like many things, are often dependent on location, interest, and understanding where there is a need across different businesses.
Focus on growth knowing that a team of professionals is utilizing years of experience maximizing your refunds, proactively developing a tax strategy, and standing by to liaise with the IRS in the event of an audit. However, it’s important to remember that you have to target businesses where you have the right location and the right skills. If you can fill them, then you have a specialization that is highly valuable to that market. Many – if not most – firms will start as generalists and then slowly make their way a more niche practice. Others realize they have, say, many construction clients and then move to the particular niche.
At any moment, executives or team members may own public or private stock in any of the third party companies we mention. It’s better to have a separate legal entity than to not and better to have separate federal filing than to not. That said, even if you don’t think you need one – or the website says it isn’t a requirement– most businesses are probably better off acquiring an EIN. Each year we assemble a panel of advisors from throughout the profession that have a wide array of knowledge and expertise. If you want to save yourself time, money, and major headaches, consider using Bench alongside a CPA.Then you can get back to building your business empire.