Choosing The Best CPA For a Startup: 5 Criteria

If you have accounting software like Xero, QuickBooks, or Bench (that’s us!), already in place, check that your prospective CPA knows how to use them. A finance toolkit for a SaaS startup looks different than that of a mobile app business, for example. https://www.bookstime.com/ If your CPA is comfortable with the software, they’ll be able to immediately begin working with it to analyze your cash flow, inventory management, and pricing. This also means that a CPA’s pricing scale is typically higher than a general accountant.

• They’ve dedicated their careers to helping countless startups establish a solid financial foundation for growth.
• This select group of early-stage companies is developing a variety of solutions across audit, AI, risk reporting, education, and environmental, social and governance (ESG) issues.
• So many startups continue to handle accounting themselves because many cannot afford a full-time CPA.
• We also use different external services like Google Webfonts, Google Maps, and external Video providers.
• To get an accurate number, be sure to track all of your expenses related to acquiring new customers.
• There is no definitive answer to this question since it will vary depending on your business, industry, and marketing goals.
• In addition to acquiring new customers, it’s also important to focus on retaining the ones you already have.

An accountant doesn’t necessarily require licensing, so many bookkeepers and tax prep firms aren’t suited for startup accounting. CPAs, on the other hand, have extensive experience and rigorous certification standards. Then follow these 4 accounting tips for startups and small businesses from our Sacramento CPA firm. In addition to acquiring new customers, it’s also important to focus on retaining the ones you already have. This can be done by providing excellent customer service and offering loyalty programs or discounts.

What Should I Look For in a Startup CPA?

Since there are multiple stages of startups, this is an easier criteria for choosing between a CPA or CFO service. (For example, if the business is growing rapidly or you’re actively seeking a seed round of funding). An outsourced CFO includes all of the benefits of a CPA, with a bit more detail. Where a CPA firm provides services and delivers reports/advice, a fractional CFO builds out (or handles) the accounting system, tracking and reporting of your business.

Thus keeping the startup in mind, it’s best to look for services that charge you monthly. It’s better to find a service provider rather than hiring a full-time CPA in-house because paying them a full-time salary, health benefits, and other things will be very expensive. Specifically, ensure that your CPA understands SaaS (or whatever industry verticle you belong to) and has startup experience. Things are already pretty streamlined in big companies and other consulting firms. In addition to being a forthcoming self-starter, the CPA must understand the industry differences in financial modeling, assumption setting, key industry valuation metrics, etc. Does the firm know and understand the industry and the level of support needed?

Experience In Your Business Vertical

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. 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. A CPA, however, must meet the educational and experience requirements of the state they live in and pass that state’s rigorous Uniform CPA Exam, which covers cpa for startup accounting topics and general business knowledge, to become licensed. 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. The current downturn may be a short downturn or a more long-term correction. However, every startup can benefit from taking steps to become more efficient, obtain financing, and avoid overreacting.

This blog series provides a deeper look at the five companies in the 2021 cohort. Each year, the AICPA and CPA.com invite early-stage companies worldwide to apply to participate in our Startup Accelerator. The program, launched in 2017, invests in and helps early-stage startup companies grow throughout the accounting ecosystem so they can help transform the accounting profession. The program also provides us with direct line of sight into emerging trends to help round out our overall mission to build an innovation ecosystem. 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.

Deductions And Credits That Can Help Small Businesses and Startups Save Taxes

A full team of experienced CPA professionals can help to provide detailed reporting and advise, or our Outsourced CFO team is there to ensure you get the most out of your financial data and use it to propel your business forward. Schedule a time to get the conversation started about where your startup is headed. A CPA needs to show greater involvement or perhaps even do a bit of handholding to the first-time founders and startup owners.

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. Zeni is a full-service finance firm that handles all your startup’s bookkeeping, accounting, and CFO needs. Communicating very clearly with all stakeholders is critically important in a tough economy. Founders need to maintain a regular dialogue with their VC investors, their board of directors, customers (if applicable at this stage), and their employees. All of these groups want your company to succeed, and they can all provide ideas, encouragement, networking opportunities, and even funding options.

We work with SMBs and startups and have a team with over 40 years of SMB and startup experience. Whether you are moving from excel to QuickBooks or from QuickBooks to fully automated software, the CPA needs to know the ins and outs of your startup’s financial structure. The CPA should be comfortable working with different accounting software.

Early on, these factors cause many founders to see the need for a financial professional — beyond basic bookkeeping. Here is a small checklist of things to look for when hiring a CPA for your startup and small business. The accounting and finance profession of the future will look very different than it does today. We’re already having to adapt to changes related to regulatory compliance, task automation, AI, blockchain, and more.