Is a Bookkeeper sufficient for a Startup?
Too often new founders think bookkeeping is the same as accounting. When in fact bookkeeping is a part of the entire accounting process. Bookkeeping is merely the recording of financial transactions such as accounts payable and payroll As a Founder, you know how costly it is to innovate and launch an entirely new product let alone an entire business. It’s critical you keep a close watch on the company’s burn rate amongst other key financial metrics. This makes the bookkeeper a necessary part of the early business.
While your bookkeeper can handle the most basic transaction and prepare cash-based financial reports, they lack the expertise to ensure you are GAAP compliant and the ability to handle requests from the executive team and investors such as the runway and burn. The purpose of GAAP is to ensure that financial reporting is transparent and consistent from one organization to another. As a venture-backed startup, this is critical. GAAP specifications include accounting specific principles, such as how to recognize revenue, as well as industry-specific rules that apply to your operations.
Many Founders discover the hassle of switching from bookkeeping to an accounting firm capable of meeting their needs when funding comes into play. The experienced team at Countsy is well versed in the transition and readily equipped to do so. They are accounting experts and will provide historical and projected cash flows that potential investors (such as Super Angels or VC’s) will want to understand. The detailed information they require is precisely what your Countsy team is ready to provide. Working with a professional firm who has experience with scaling companies is essential, in addition to making sure your business is transaction ready at all times.
Bookkeeping is an established profession, and quite necessary in the day-to-day operation of small businesses. But if you need to take the accounting of your growing startup to the next level, be sure to hire an experienced accounting team, lead by a CFO well versed in your industry.