As an accountant or bookkeeper, navigating the financial intricacies of a startup can often feel overwhelming. Simplifying these processes not only alleviates your burden, but also sets a robust foundation for the company's future and positions you as a true partner and asset to the startup founder.

Key financial focus areas for accountants at early-stage startups

Most of the time, a startup founder won’t be a finance expert — and they shouldn’t be. They’ll understand what’s happening with the business on a fundamental level, but they’ll value freeing up their time so that they can stay focused on customers and products. Here’s where you come in to help. If you are working with early-stage startups as an accountant, your scope will likely stretch beyond that of a typical accountant. These are six areas the founder will likely care about most and where you can be the biggest asset:

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Core accounting & tax - This is typically what the founder will be looking for.

• Basic bookkeeping: Accurate record-keeping is foundational for understanding the startup’s financial position and making informed decisions. The startup’s investor will also expect some level of financial reporting from the founder as well. The startup doesn’t necessarily need GAAP-compliant, audited financial statements at this point, but as the accountant, you should have a basic grasp of their financial picture.
• Taxes: Understanding and meeting tax obligations helps the company avoid legal complications and costly financial penalties. In the beginning, this will mostly be for income tax filings but could also cover sales & use taxes, filing for R&D tax credits, and other tax incentives potentially available for a startup.

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Operations - Founders often want help running their finance operations as well which can include activities below.

• Payroll: Ensuring the team is compensated accurately and on time is non-negotiable. This is a pretty direct reflection of the company's reliability and respect for its workforce.
• Customer payments: Streamlining the process of receiving payments affects the company’s cash flow and, by extension, the business's operational viability.
• Vendor payments: Timely payments to vendors preserves essential business relationships and prevents supply chain disruptions.
• Cap table management: If your customer is an investor-backed startup, the founder might ask for help with keeping a precise record of equity ownership. This can be especially tough in the early years of a startup when there are dozens of shareholders that might include a handful of friends, family, and angel investors.

Depending on the specific industry, there might be an additional item or two on this list that you need to focus on as an accountant. But for the most part, this list of six basic finance functions will cover 90% of what the startup will need help with in its early days, and represent where you can lean in most.

While strategic financial planning isn’t necessarily an accountant's responsibility, it is important to understand your client’s business well enough that you can provide input and basic insights into the business model’s sustainability and scalability. The best outsourced finance professionals will be the ones that can also be business thought partners to founders. You should understand the basic financial aspects of the business, including how they are acquiring and retaining customers, what revenue growth looks like (just a basic understanding of this is okay), and how any hiring, marketing, or vendor spend is expected to impact its burn rate and cash runway in the future.

Focus on setting a solid financial foundation

When considering the right partner for their startup, a founder will look to an accountant or accounting firm that can understand its business model and industry. A founder will also look for a willingness to roll up your sleeves to help establish core financial workflows, such as:

Playing an active role in mapping what the workflows will look like so that it’s clear what the roles and responsibilities will be between you and the founder. For example, maybe a bookkeeper will handle all vendor payments and customer invoicing, but the founder will be more involved in approving major expenditures and will review monthly financial reporting. This could also involve things like aligning on your vendor payment terms or SLAs to ensure timely payments.

Partnering with the founder on what its chart of accounts and cost centers should look like. Having the right setup here can make a big difference in the ability to understand the business well. Think about this as the data structure for understanding the business.

Encouraging the founder to keep clear records of every dollar that comes in and out of the business, and to save and organize all contracts and agreements in a centralized place for easy reference whenever needed. It’s much harder to remember why certain transactions occurred on what terms and to dig through your inbox to find old agreements. This’ll be crucial when preparing financials and during financial audits.

Establishing a shared financial process to manage recordkeeping across the company will make everyone’s life a lot easier as the company grows and scales. Determine clear financial processes from the start, ensuring they're scalable and adaptable to the business's growth.

Remember that at this point, one of your main financial responsibilities as a finance professional for an early-stage startup is ensuring that you’re taking the right small steps to make the future state of the company’s growth a lot less painful. This foresight reduces the need for time-consuming overhauls or corrections down the line. Get things in as best shape as possible at the start.

For founders, simplifying financial operations is not just about reducing their workload; it's about creating a solid foundation for sustainable growth. By focusing on key financial areas and methods for streamlining operations, an accountant or accounting firm can help a startup ensure that its financial backbone is not only resilient and scalable, but relatively easy to manage.