Startup Accounting & Financial Guide

Build investor-ready financials from day one

Accounting Basics Projections Tax Strategy Investor Metrics Bookkeeping

103 Accounting Templates Available

Invoices, tax organizers, metrics dashboards, and investor reports—customized for your business.

Browse Document Library

What you can generate with StartupVision

AI-assisted outlines, templates, and checklists to make your books and forecasts investor-ready faster. Always review with a CPA or finance lead.

Financial Statements

Chart of accounts suggestions, example P&L/BS/Cash Flow layouts, and metric tracking prompts (MRR, ARR, CAC, LTV, burn, runway).

Forecasting & Scenarios

Driver-based projection templates (pricing, conversion, churn, hiring) plus sensitivity tables for conservative vs aggressive plans.

Compliance & Controls

Bookkeeping checklists, expense policy outlines, and internal control reminders to reduce audit surprises.

Informational only—this is not tax or accounting advice. Confirm decisions with a qualified accountant or tax professional.

Accounting Basics for Startups

Foundation knowledge every founder needs to manage finances effectively

Cash vs Accrual Accounting

Cash Basis

"Record when money changes hands"

  • Simple to understand and maintain
  • Clear picture of actual cash flow
  • Best for early-stage, service businesses
  • Not GAAP compliant for investors
Best for: Startups under $1M revenue, no inventory, no outside investors yet

Accrual Basis

"Record when earned or incurred"

  • GAAP compliant - required for investors
  • Better revenue/expense matching
  • Required for inventory businesses
  • More complex, requires professional help
Best for: VC-backed startups, SaaS, inventory/product businesses, >$1M revenue

When to Hire Financial Help

DIY (Bootstrap)

"$0-10K/month revenue"

  • Use accounting software (Wave, free)
  • Simple expense tracking
  • Use CPA only for annual taxes

Bookkeeper

"$10K-50K/month revenue"

  • Monthly reconciliation
  • A/R and A/P management
  • Cost: $300-1,000/month

CPA / CFO Services

"$50K+/month or raising funds"

  • Tax strategy and compliance
  • Investor-ready financials
  • Cost: $1,500-5,000+/month

Accounting Software Comparison

Software Best For Price Key Features
Wave Bootstrap startups Free Invoicing, basic accounting, receipt scanning
QuickBooks Online Growing startups $30-200/mo Full accounting, payroll, inventory, integrations
Xero Tech-forward teams $15-78/mo Beautiful UI, 1000+ integrations, multi-currency

Financial Projections

Create realistic forecasts that impress investors and guide decisions

Revenue Forecasting Methods

Bottom-Up Forecasting

"Build from individual assumptions"

  • Start with # of sales reps x deals/month
  • Factor in conversion rates
  • More credible with investors
Example: 2 sales reps x 10 deals/month x $5,000 ACV = $100K/month

Top-Down Forecasting

"Start from market size"

  • TAM x realistic market share %
  • Good for early-stage validation
  • Use conservative %s (1-5% for startups)
Example: $500M TAM x 1% market share = $5M target revenue

Expense Categorization

R&D / Engineering

  • - Engineering salaries
  • - Cloud infrastructure
  • - Development tools
  • - QA and testing

Sales & Marketing

  • - Advertising spend
  • - Sales team salaries
  • - Marketing software
  • - Events & travel

G&A (General)

  • - Office & rent
  • - Legal & accounting
  • - Insurance
  • - Admin salaries

Customer Success

  • - Support team
  • - Onboarding
  • - Help desk tools
  • - Training materials

Burn Rate & Runway Calculations

Burn Rate Formulas

Gross Burn

Total monthly operating expenses

= All monthly costs

Net Burn

Cash out minus cash in

= Monthly expenses - Monthly revenue

Runway Warning Thresholds

12+ months

Healthy - continue executing

6-12 months

Caution - start fundraising process

Under 6 months

Critical - urgent cost cuts or fundraise

Calculate Your Runway with StartupVision

Tax Considerations

Strategic tax planning to maximize savings and stay compliant

Entity Type Comparison

Feature LLC S-Corp C-Corp
Best for Small teams, consulting Tax savings at $80K+ profit VC funding, going public
Taxation Pass-through Pass-through Double (corp + dividend)
Self-employment tax Yes (15.3%) Partial savings No
VC compatible
Setup complexity Low Medium High

2025 Quarterly Estimated Tax Dates

Q1 (Jan-Mar) April 15, 2025
Q2 (Apr-May) June 16, 2025
Q3 (Jun-Aug) September 15, 2025
Q4 (Sep-Dec) January 15, 2026

R&D Tax Credits (2025)

  • Up to $500K/year offset against payroll taxes for startups
  • Must have under $5M gross receipts
  • Qualifying activities: software dev, product design, testing
  • 2025 change: R&D costs must be amortized over 5 years (domestic) or 15 years (foreign)

Consult a tax professional for specific guidance on your situation.

State Tax Nexus Considerations

What Creates Nexus?

  • Physical presence (office, warehouse, employees)
  • Remote employees in other states
  • Economic nexus thresholds (typically $100K+ sales)
  • Inventory stored in state

Common Obligations

  • State income/franchise tax filing
  • Sales tax collection & remittance
  • Payroll tax withholding
  • Business registration & annual reports

Investor-Ready Financials

The financial statements and metrics that VCs and angels expect to see

Required Financial Statements

Income Statement (P&L)

"Shows profitability over time"

  • Revenue by stream
  • COGS and gross margin
  • Operating expenses by category
  • EBITDA and net income

Balance Sheet

"Snapshot of financial health"

  • Cash and receivables
  • Liabilities and debt
  • Equity and retained earnings
  • Cap table summary

Cash Flow Statement

"Shows actual money movement"

  • Operating cash flow
  • Investing activities
  • Financing activities
  • Runway calculation

Key Metrics Investors Track

CAC

Customer Acquisition Cost

Sales & Marketing spend / New customers

LTV

Lifetime Value

ARPU x Gross margin % x Avg lifespan

MRR / ARR

Monthly/Annual Recurring Revenue

Sum of all active subscriptions

Churn Rate

Customer loss rate

Lost customers / Total customers x 100

Gross Margin

Revenue after direct costs

(Revenue - COGS) / Revenue x 100

LTV:CAC Ratio

Unit economics health

Target: 3:1 or higher

Benchmarks by Stage

Metric Pre-Seed Seed Series A
ARR $0 - $100K $100K - $1M $1M - $5M
MoM Growth 15-30% 15-20% 10-15%
Gross Margin 60%+ 65%+ 70%+
Net Revenue Retention 90%+ 100%+ 110%+
LTV:CAC 2:1+ 3:1+ 3:1+

Bookkeeping Best Practices

Establish good habits early to save time and money later

Separate Finances

"Never mix personal and business"

  • Open dedicated business bank account
  • Get a business credit card
  • Pay yourself a salary (if S-Corp/C-Corp)
  • Document all owner contributions

Receipt Tracking

"Capture everything, immediately"

  • Use apps like Expensify or Dext
  • Photograph receipts same day
  • Store digitally for 7+ years
  • Include business purpose notes

Expense Policies

"Set rules before you need them"

  • Define reimbursable expenses
  • Set approval thresholds ($X needs CEO sign-off)
  • Create travel & meal per diems
  • Document in employee handbook

Monthly Bookkeeping Checklist

Week 1-2 Tasks

  • Reconcile all bank accounts
  • Reconcile credit cards
  • Review accounts receivable aging
  • Send overdue invoice reminders

Week 3-4 Tasks

  • Pay accounts payable
  • Review P&L vs budget
  • Update cash flow forecast
  • Back up all financial data

Need Help With Financial Projections?

StartupVision generates investor-ready financial projections, burn rate calculations, and key metrics in minutes. Get the numbers you need to raise your next round.

Generate My Financials Explore All Features

No credit card required - 2 free validations per month