How to Choose the Best Accountant for your Startup

Here you are – you need an accountant for your startup. After all, accounting helps you make the daily business decisions required to make your business financially function and grow. Welcome to startup accounting 101 – accounting tips for startups that will help you choose among the best accounting firms for your startup business.

Why is accounting important for the startup of a business?

Without accounting, you might not actually have a business. A business without accounting might only be an idea, and a bad one at that!

Whatever your business goals, you need revenue to survive. Often, entrepreneurs that are just getting started like to perform all the business functions themselves. It saves them money and simple bookkeeping software makes this possible, but most times it comes at the expense of time and energy that could be used elsewhere in the business. Accounting gives you the heads up on revenue timing, cash flow planning, and a snapshot of the business’ overall performance. An accountant manages and oversees your finances, tax preparations, recordkeeping, and can pinpoint inconsistencies and problem areas in your money management practices that can set your small business on a trajectory to success. Accounting can help you figure out how to make your business more successful and save you time so you can focus on running the business.

Accounting for startups includes:

  • Organizing your financial records
  • Giving you an accurate reflection of your financial position
  • Allowing you to compare your business with the competition
  • Identifying your strengths and weaknesses
  • Tracking debts
  • Helping make your business solid, stable, and a good prospect for investors
Whether your goal is to break even, change the world, or get your weekends back, startup accounting is a big step that can have an impact on the trajectory of your business.

How much should startups spend on accounting?

Since accounting is critical to your business’s success, we don’t advise that you spend the minimum, but like many businesses starting out, budgets can be tight! Your search will primarily depend on your budget, the volume and type of transactions that need to be performed, and the bookkeeping methods already in place. You may narrow down your options by how the accountant would like to be paid (flat fee, percentage, by the hour), and if that’s something that is doable at the current stage of your business.

Finvisor has been supporting startups and small businesses since 2014. Our varied team gives us decades of accounting experience. We have all the accounting technology, tools, experience, and expertise necessary to help you get where you need to go, all this without breaking the bank.

Our team scales with your growth, so you only spend what you need to to ensure that your business is on the right track. We are ready when you need additional services, tools, and support.

Is an accountant the same as a bookkeeper?

Bookkeeping for startup businesses entails processing transactions and keeping daily finances documented and organized. Startup accountants, however, will provide you with financial analysis based on your bookkeepers’ data. You’d call an accountant for help with startup accounting strategy, tax filing, and forecasting. In some cases, an accountant might oversee the work of a bookkeeper.

What to look for in a startup accountant

Startups typically need a lot of help and energy to reach the next stage. You need solid accounting skills, therefore, look for experience above all. For this you can look to a variety of professionals:
  • Certified Public Accountant - CPA
  • Certified Management Accountant - CMA
  • Non-certified Accountant

What qualifications/licenses are needed?

No official qualifications are obligatory to pursue a career in bookkeeping for startups. When it comes to accounting, however, look for a CPA specializing in startups. The CPA Certified Public Accountant credential will help you reach a qualified accountant or team that can help provide accounting services for startups.

How important is small business experience?

A small business has unique challenges, requires drive, dynamic decision making, and generally finds it more challenging to recover from strategic errors than a medium or larger sized business. For this reason, an accountant or firm with startup experience is essential.

Should accounting experience be industry-specific?

It’s helpful to have a team that understands your business. While understanding your work doesn’t change your figures, an accounting service with knowledge of the ins and outs of your industry may be better at providing the insights that are most valuable to you. A firm like Finvisor that works with venture-backed companies has the background of working with the most cutting edge businesses and industries, which allows that expertise to transfer to your account.

Do they need to share the company’s risk tolerance?

Your accountant service should provide forecasts and analysis based on careful, comprehensive data reviews. Predictions, accuracy, and timeliness are the most important factors to consider. The risks you take based on an accountant’s accurate information are up to you and your business.

How important is it to have an entrepreneurial spirit?

As a start-up, it can be helpful to have people around that understand and share your entrepreneurial spirit. Finvisor loves to help businesses in this all-important start-up stage!

Why is communication style important?

Your financial data will be much more useful if you can act on it without frowning. Having an accountant who can communicate clearly with key people in your business will make it easier to move your business forward.

Do they need to be familiar with your accounting software?

Modern accounting software and accounting apps for small businesses are capable of complex accounting and reporting. They also facilitate mobility and security, which are critical for modern businesses. If your accounting software lacks in any of these departments, your accountant may suggest an affordable upgrade that can save your business time and money. Otherwise, you may find that your accountant already uses financial accounting software ideal for startups and compatible with your setup.

What to look for in a startup accountant

The best way to know the value of a potential accountant is to consider what they have done for others. Check out reviews online and ask for client references. Their experience and how much they understand your stage of business will tell you a lot about whether they will be a good fit. You can do a background check on the accounting firm and look them up online to uncover any complaints or blemishes on their record. The right candidate will ask the detailed questions to truly understand what you would like to get out of the partnership. You should feel at ease when making your decision.

Should I ask for professional references?

Any business can say they have experience. Whether clients say that their experiences were good is another matter! This is why Finvisor provides professional references, making it easy for potential clients to hear why other businesses choose us.

Does it matter how they charge for their services?

While it’s easy to fall into the trap of paying too much for accounting, beware that spending too little can also be bad for business. Finvisor ensures affordable pricing that is easy to understand and consistent. Our accountants aim to help you make money with our expert financial analysis.

Are fixed monthly fees important for a startup?

You can predict how much you will spend with monthly fees by the type of professional you hire and how advanced the tasks will be. It’s natural for a good accounting firm to want to operate in a way that is good for your books and facilitates your decision-making. Consider also whether your accounting firm is willing to change their fees quickly to reflect your changing needs.

How do I find a startup accountant?

Since experience is critical when choosing an accountant, peer referrals and small business network recommendations are among the best ways to find the startup accountant that is right for you. You can also browse the various CPA directories that are available to the public.

Peer referrals

With peer referrals, businesses and individuals you trust can put you in touch with companies that can help you. Businesses like yours are in great positions to recommend accountants that will accommodate your needs.

Small business network recommendations

A small business network is an excellent place to hear more about services that have helped other small businesses like yours. A great way to do this is to attend small business events hosted by local organizations.

How to hire an accountant for startups

An ideal accounting service for a startup will scale with your business. You should be able to hire an accountant to handle your immediate needs with the option of increasing or reducing support as you wish. Modern businesses need to be dynamic and your accountant should be equally flexible.

Finvisor’s team can offer you decades of relevant experience. We are reliable, flexible, and help you focus on your core duties based on the information we provide. Contact us to hear more about how we do business – or to hear from our happy clients!

To learn more about what we do, or to request a quote, contact us at hello@finvisor.com or 415-416-6682. We’re here to help you navigate deferred revenue journal entries so you can make the most of your assets!

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*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*

  • Last Modified
  • June 19, 2023

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