Tax Planning and Credits
Every dollar you save in taxes extends your cash-out date!
Most businesses and a lot of startups make one big mistake when it comes to their taxes - they work on them retroactively. There is very little you can do to help your taxes if you are always working on them after the year has ended.
We flip that on its head and help you proactively plan ahead to ensure you’re taking full advantage of any and all applicable tax credits and write-offs.
We work diligently so you pay your fair share and not a penny more!
What startups should expect in an accounting partner
After working with a lot of startups, especially tech startups, we’ve developed a sense for what they need most when working alongside us and other accounting partners.
When VCs, Angels, or M&A opportunities come calling and have specific questions, you’ll want a partner who can provide those in a timely manner. Startups are always working against the clock, trying to make sure they can get the funds they need before their cash-out date comes. This makes it even more important to provide answers to interested parties in a timely manner. Asnani CPA understands this and we are dedicated to providing what you need in the time-frame you need it!
Mistakes happen across all sizes of businesses, but there is nothing worse than trying to convince a VC to invest in your company and then providing books that aren’t accurate. It doesn’t instill confidence and it slows down the process. While accurate books are important to all businesses, it is especially important to startups! That’s why we focus on helping tech startups and normal startups to maintain accurate books.
Accurate books are also great because they help speed up the due diligence process and make it a lot less stressful!
We’ve already discussed how timeliness and accuracy are immensely important to startups, and just as important is reliability. It doesn’t matter if your accounting partner provides accurate and timely books 95% of the time if the one time they don’t is when a VC or Angel is asking for them. You need to have accurate and timely responses 100% of the time.
Reliability is one of the most important things you can ask for in an accounting partner!
Startup and Accounting Expertise
You’ll want to work with someone who understands the specific needs of startups and your precise business plan. The best accounting partners are those who can provide insight and guidance regarding your finances. These insights and guidance are the difference between having a great set of financial models and being able to use them to move the business forward.
When it comes to startups, you have specific needs and goals that you need to be met. We understand that and actively work with you to meet and exceed those goals!
If you opt to choose an outsourced accounting model, you’ll want it to be hands-off as much as possible so you can focus on planning and growing your startup. Setting up accounting practices and getting information will always take time in the beginning, but you should see that time burden begin to lessen overtime. A great accounting partner will be able to take care of all of your needs and provide insight during a weekly or monthly meeting that shouldn’t take up too much of your time.
Startups are high velocity environments where the founders are constantly pushing forward. This means you’ll want a hands-off approach where you can trust your accounting partner and be able to get insight with the least amount of time required possible.
Asnani CPA works with a lot of startups and we know how important your time constraints are, so we go out of our way to make sure every meeting is meaningful and has a purpose. You won’t feel like your time is wasted when working with us!
Cash-out dates and burn rates are one of the most important things for startups. That’s why we focus on providing immense amounts of value that you can carry with you as you grow your startup. We pride ourselves in making sure our pricing is fair and reasonable for your needs. We work hard to meet our clients exactly where they are and provide the perfect amount of support for their financial position. Because of this we are confident we can help your startup, whether you’re just getting started or well on your way!
Make sure you find a partner who provides value and competitive advantages over just hiring personnel in house!
Best practices for startup accounting
If you’re looking for accounting tips for startups, or “how to do startup accounting?”, or “what’s the best accounting software for startups?,” then you’ve come to the right place! We are here to help tech startups, regular startups, and Software as a Service startups (SaaS).
Startups are some of our favorite clients because we can provide an immense amount of value by helping them set up GAAP or Generally Accepted Accounting Practices, running financial models for startups, offering bookkeeping for startups, offering tax planning for startups, and helping with guidance and expertise for startups!
What is the best online software for startups?
This will depend on your specific needs, but we like to recommend QuickBooks Online as it offers competitive pricing and allows you to collaborate remotely with your CPA, bookkeeper, or other personnel.
How to do startup accounting?
Startup accounting has a lot of similarities with normal accounting, but you’ll start to implement more advanced accounting procedures a lot sooner than most normal businesses would. Things like GAAP are important for due diligence and VCs, Angels, and M&A opportunities. You’ll also want to focus on specific things like Burn Rate and Cash-Out date so you can work backwards to help ensure you meet your goals. Depending on your business type you’ll also want to make sure you don’t just blindly do cash-based accounting but look for expertise that can help with accrual type accounting for startups. Working with a professional is strongly recommended as they can provide insight and help across all portions of this process. We pride ourselves on structuring our pricing options to be able to work with startups at all stages, reach out for a free consultation!
Bookkeeping for startups?
Bookkeeping for startups is a bit more involved than for normal companies. You’ll want to avoid just doing cash-based bookkeeping and you’ll want to look at potential deferred revenue to make sure you keep your financial statements up to date.
What financial statements do you need as a startup?
The main ones are:
- Income statement for startups
- Cash flow statement for startups
- Balance sheet for startups
What is the most important part of startup accounting?
This is a subjective item, but one of the most important places to start and end is always with a strong budget. You’ll want to make sure you are working within your means and you can calculate your burn rate and cash-out date to ensure you have enough time and money to accomplish your goals.
Startup Tax Returns
If you’re wondering “do startups have to file tax returns” or “how do you file a tax return as a startup” then know you’re in good hands. Asnani CPA specializes in helping startups, tech startups, and other businesses complete tax returns and actually proactively plan for their taxes! Even if you run a loss you’ll need to file taxes, so make sure you stay on top of this!
Best Startup Tax Credits
Tax credits are an amazing way to decrease your burn rate and extend your cash-out date. Tech startup tax credits, typical startup tax credits, SaaS tax credits, and others are all based on some of the same ones. You’ll want to look at the ERC or Employee Retention Tax Credit, and the R&D (research and development) tax credit. California has some relevant ones too such as the California R&D Tax Credit and the California Sales Tax Partial Exemption. There are a lot of other tax credits available as well with more sometime coming out monthly!
Should Startups outsource their accounting?
Whether you’re looking for outsourced accounting for tech startups, outsourced accounting for typical startups, etc, you’re likely asking the question about whether you should outsource your accounting.
Here at Asnani CPA we strongly believe the answer is yes. Building a startup is hard as it is, but trying to become a financial expert to answer due diligence requests and keep up with GAAP can all make it even more difficult. Having an outsourced accounting partner can help clear up these difficulties and provide even more value! Saving time, money, and stress are the key reasons most startups work with outsourced accounting partners!
Ready for a free consultation? Reach out now!