Accounting Systems Guide

Managing Tax & Accounting for Growing Startups

Essential systems, processes, and tools to keep your startup's finances organized and compliant as you scale from 1 to 100 employees.

12 minute read • Updated January 2024

The 4 Stages of Startup Financial Management

1

Bootstrap Stage (0-5 employees)

Financial Needs:

  • • Basic bookkeeping
  • • Expense tracking
  • • Simple invoicing
  • • Annual tax filing

Recommended Tools:

  • • QuickBooks Simple Start ($15/mo)
  • • Wave Accounting (Free)
  • • Receipt tracking app
  • • Basic spreadsheet templates
2

Growth Stage (5-20 employees)

Financial Needs:

  • • Payroll management
  • • Monthly financial statements
  • • Cash flow forecasting
  • • R&D credit tracking

Recommended Tools:

  • • QuickBooks Plus ($45/mo)
  • • Gusto payroll ($40/mo base)
  • • Monthly bookkeeper (part-time)
  • • Annual CPA review
3

Scale Stage (20-50 employees)

Financial Needs:

  • • Advanced reporting & analytics
  • • Budget vs actual tracking
  • • Multi-state tax compliance
  • • Investor reporting

Recommended Tools:

  • • QuickBooks Advanced ($100/mo)
  • • Full-service accounting firm
  • • Dedicated controller
  • • Quarterly CFO advisory
4

Enterprise Stage (50+ employees)

Financial Needs:

  • • Enterprise financial planning
  • • Complex consolidations
  • • IPO readiness prep
  • • Advanced tax optimization

Recommended Tools:

  • • NetSuite ERP system
  • • Full finance team
  • • Big 4 accounting firm
  • • Dedicated CFO

Essential Financial Systems for Every Stage

1. Organized Record Keeping

Document Organization:

  • • Digital receipt scanning (Expensify, Receipt Bank)
  • • Cloud storage with clear folder structure
  • • Bank and credit card statement archiving
  • • Contract and invoice management system

Monthly Reconciliation:

  • • Bank account reconciliation
  • • Credit card reconciliation
  • • Accounts receivable aging
  • • Accounts payable review

Pro tip: Set up automated bank feeds to save 70% of data entry time.

2. Regular Financial Reporting

Monthly Reports You Need:

Profit & Loss

Revenue and expenses by category

Balance Sheet

Assets, liabilities, and equity

Cash Flow

Cash in vs cash out

Key Metrics to Track:

• Monthly Recurring Revenue
• Customer Acquisition Cost
• Burn Rate & Runway
• Gross/Net Margins

3. Automated Processes

Automate These Tasks:

  • Bank transaction imports
  • Recurring invoice generation
  • Expense categorization rules
  • Monthly report generation

Integration Benefits:

  • • Reduces manual data entry by 80%
  • • Eliminates human errors
  • • Provides real-time financial visibility
  • • Saves 10-15 hours per month

Common Financial Management Mistakes

Mistake #1: Mixing Personal and Business Expenses

Using the same accounts for personal and business expenses creates a nightmare for bookkeeping and tax filing.

Solution: Open dedicated business bank accounts and credit cards on day one. Use business accounts exclusively for business expenses.

Mistake #2: Ignoring Monthly Reconciliation

Letting months go by without reconciling accounts leads to errors that compound and become expensive to fix.

Solution: Set a monthly calendar reminder for the 5th of each month to reconcile the previous month's accounts.

Mistake #3: No Cash Flow Planning

Running out of cash because you didn't plan for seasonal fluctuations or large upcoming expenses.

Solution: Create a 13-week rolling cash flow forecast updated weekly. Plan for 3-6 months of expenses in reserves.

Mistake #4: Waiting Until Tax Season

Scrambling to organize a year's worth of receipts and transactions in March leads to missed deductions and high accounting fees.

Solution: Implement monthly bookkeeping routines and quarterly tax planning reviews to spread the work throughout the year.

Recommended Tools by Budget

Budget Option

$50-150/month

Core Tools:

  • • Wave Accounting (Free)
  • • Expensify ($5/user/mo)
  • • Google Sheets templates
  • • DIY payroll if needed

Best for: Pre-revenue or under $100K revenue

Most Popular

Recommended
$200-500/month

Core Tools:

  • • QuickBooks Plus ($45/mo)
  • • Gusto Payroll ($40/mo base)
  • • Receipt Bank ($20/mo)
  • • Part-time bookkeeper ($200-400/mo)

Best for: $100K-$1M revenue, 5-20 employees

Full Service

$1,000+/month

Core Tools:

  • • QuickBooks Advanced ($100/mo)
  • • Full accounting service
  • • Dedicated controller
  • • Monthly CFO advisory

Best for: $1M+ revenue, 20+ employees, raising capital

90-Day Implementation Plan

Days 1-30: Foundation

  • • Open dedicated business bank accounts
  • • Set up accounting software (QuickBooks/Wave)
  • • Implement receipt scanning system
  • • Create chart of accounts structure
  • • Connect bank feeds to accounting software

Days 31-60: Automation

  • • Set up recurring invoices for regular customers
  • • Create expense categorization rules
  • • Implement payroll system if needed
  • • Design monthly reporting templates
  • • Establish monthly reconciliation routine

Days 61-90: Optimization

  • • Generate first full month of automated reports
  • • Create cash flow forecasting system
  • • Set up KPI tracking dashboard
  • • Schedule quarterly tax planning review
  • • Document all processes for consistency

Need help setting up your financial systems?

Our accounting experts can help you implement the right systems and processes for your startup's stage and budget.