With accrual accounting, the challenge lies in capturing all revenue and expenses in the correct period, even if cash hasn’t changed hands yet. For example, integrating with your CRM can automate customer data updates, ensuring your accounting system always has the latest information. Similarly, integrating with your payment gateway streamlines transaction processing and reconciliation. The best rule of thumb for startup accounting is to hire a professional accountant to help you manage your business’s finances. However, there are several accounting software options available to help you manage your startup finances whether or not you choose to hire an accountant.

Top 10 business accounting software for startups in 2025

It also includes an automated inventory management tool that helps facilitate quick order reviews and seamless communication with suppliers. With a user-friendly interface, it simplifies the creation and customization of invoices, allowing convenient customer payments through a “pay now” option. Seamlessly integrating with broader enterprise functionalities, it unifies essential business processes into a centralized platform. The platform’s seamless integration with other accounting for startups Zoho Suite tools ensures a comprehensive and unified solution for efficient business operations.

• With experience at high-growth tech companies like Sumo Logic and LiveAction, I now help founders steer the complexities of accounting for tech startups.
• Establish internal controls that maintain proper oversight while taking advantage of automation efficiencies.
• These provide strategic financial advice and also help to project revenues, costs, and profit margins.
• But accurate financial reporting is the foundation of everything you do.
• The most effective accounting automation platforms consider these limitations by incorporating intelligent exception handling workflows.
• For more details about Atomic Brokerage, please see the Form CRS, the Atomic Brokerage General Disclosures.

Step 5. Monitor your cash flow

The foundation of startup accounting involves understanding the basic principles and ensuring you have a solid system in place from day one. This means familiarizing yourself with finance terminology, setting up accounting software, and adhering to accounting standards and practices. It’s important to lay this groundwork to avoid future financial missteps. Accounts payable (AP) is the money your business owes to its vendors for providing goods or services to you on credit. Different vendors have different payment terms, so you should use this to your advantage. GAAP is better for running your business, as it helps you match your expenses and revenues with the timing of those activities.

Tax Returns and Supporting Documents

As the business grows, working with an accounting professional can ensure the books and records are maintained completely and accurately. Tabs, with its focus on recurring billing and revenue management for SaaS businesses, excels in handling these complex scenarios. Features like automated invoicing and simplified revenue recognition directly address the time-consuming and error-prone nature of manual accrual accounting, freeing up your team for more strategic work. This not only improves efficiency but also ensures compliance and accurate financial reporting, crucial for attracting investors and maintaining transparency. It automates accrual accounting processes including deferred revenue, prepaid expenses, fixed asset management, and payroll accruals—all within a system that understands the nuances of recurring revenue.

As manual tasks are automated, new opportunities are arising for finance professionals who adapt. Rather than simply processing transactions, accountants can focus on strategic analysis and business partnership roles that complement automated processes. Xero is a cloud-based accounting platform with an intuitive design and automation-friendly architecture intended for small businesses. Xero offers general ledger, invoicing, bill pay, and bank reconciliation functionality to non-accountant founders.

• When looking for the best accounting software for your small business, aim for affordable tools to solve your current challenges and support your company as it grows.
• Choosing the right accounting automation platform depends on your company’s size, complexity, and specific workflow requirements.
• Accrual accounting tracks income and expenses as they’re earned or incurred, even if the money hasn’t changed hands yet.
• Plus, there are some states that require businesses to use the accrual method for their accounting.

You can scan and organize receipts https://jt.org/accounting-services-for-startups-enhance-your-financial-operations/ digitally using apps like Expensify or Shoeboxed. This system backups your important files, and you can easily access them anywhere. Book a demo to see how our apps make your QuickBooks work like magic. And don’t worry, there’s no boring slide decks – because we hate those just as much as we hate manual accounting work. ZarMoney’s invoice-creation options keep invoicing simple while adding a handful of customization options.

Small Business

For instance, you may set up your software to automatically approve purchases for office supplies under $100 while routing marketing expenses over $500 to department heads for review. These expense approval workflows allow founders to maintain oversight without micromanaging every transaction. Follow these steps to start up your accounting processes for a new business. Accrual accounting records income when earned and expenses when incurred, regardless of when the money changes hands. Carefully evaluate both monthly costs and implementation fees to choose affordable software that fits your budget.