How do I do my own accounting for my startup?


I am the founder of a very early stage startup, 4 people total, just incorporated with no funding and a minimal amount of money already in. We expect to raise funding in 3-6 months, before then there will likely be no more money coming into the business. How can I save the money it would cost for an accountant and do my own books?


asked Oct 11 '09 at 08:56
Jer Levine
173 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans
  • Accounting is difficult, and requires a lot of learning if you don't know it already. At the same time, it *is* possible to do it right on your own (don't let people scare you into thinking it's not). It's a matter of your aptitude for learning it and whether the opportunity cost outweighs it for you. – Gabriel Hurley 14 years ago

15 Answers


Accounting means two things to me:

  1. Book Keeping - definitely do that yourself and/or have a book-keeper employee (part-time if necessary). It is really important to be able to invoice customers, pay suppliers and know the state of basic cash flow.
  2. Regulatory (or big) accounting - should be out-sourced. For small companies and start-ups look for someone that gives a more personal service and charges a fixed sum for the year including answering simple tax and day-day questions that may arise.
answered Oct 11 '09 at 09:25
Ronnie Barker
313 points
  • +1. No reason not to do bookkeeping in-house, plus you need to have a finger on the pulse of the cash flow. When it comes to filing taxes, it's best to be safe and it's not important that you know how to do every last thing. – Jason 15 years ago


Do your own accounting, but develop a relationship with a CPA firm (to do your taxes at the end of the year). Open a Quickbooks account, create a Charter of Accounts with their help, and then track your expenses over time. At the end of the year, the CPA firm will be able to do your taxes very easily. This will also help you keep track of your burn rate (and runway).

answered Oct 11 '09 at 09:14
71 points


Don't. Accounting service are relatively cheap (e.g. in Europe, you can get an accountant for 30€/hour), and as you are likely to have just a few bills per month, skilled accountant can do the job for you in 15-30 minutes. Just invest a couple of hundred bucks that you need to pay them for six months and spend the time you save by securing your financing or improving your product.

answered Oct 11 '09 at 09:04
171 points


I incorporated 4 years ago and was too cheap to get a book keeper or accountant. At the time I decided to do it myself to save some money. Four years later my book keeping and tax filings were a mesh. This year I hired a person to do the book keeping she charges 35 dollars an hour and was able to fix my previous years mistakes enter this year’s income and expenses in about 12 hours and the accountant charged 800 dollars to file it. (I live in Canada)

The point is you have so many things on your mind and so many things on the go. Spend the 1500 dollars per year and get somebody else to do it. The amount of time it frees up pays for the bookkeeper and accountant. Not to mention that it removes one stress point from your live. It is not worth your time to learn how to do the book keeping reconcile your bank statements, file gst, payroll deductions file taxes. Spend your time on the business that is where your strength.

answered Oct 11 '09 at 10:32
John Soer
596 points


Start simple. Bottom line, you don't need something as complex as Quickbooks and you don't yet need the expense of a pro or the software (at least not until March/April) when getting started (this is what we do by the way).

  1. Keep track of your money coming in and going out.
  2. Manage payroll as Expenses.
  3. Keep everything recorded (use an online service) so that when you need to pay a bookkeeper or accountant, you have everything readily available.
answered Dec 4 '09 at 04:53
Paul O'brien
521 points


One thing not yet mentioned. First, my background is in start-up Accounting - for the past 18 years.

  • Quickbooks is pretty much the de facto standard in small business / start-up accounting packages. All CPA firms from the Big 4 down to regional firms will be able to review your Quickbooks file.
  • Do not use Quickbooks online, if you are planning on growing your company, taking venture money, selling service contracts (with corresponding revenue recognition issues), granting options, etc. Quickbooks online is too limiting.
  • I somewhat agree with the opinions to outsource - but there is a big BUT, do not just dump off your bookkeeping to an outside source / consultant and forget about it.
    • You need to keep your finger on the finances, at the very least do not give the person who is doing your books signing authority on your checking account.
    • Also, you should be receiving the unopened bank statements at the end of each month, reviewing them for strange activity and signing off.
This may seem pessimistic - but fraud and embezzlement does happen.

Finally, once you take outside investment money - everything changes - if you bring in anything other than friends and family funds; you will most likely be required to have an audit - which will require your books to be up to date with GAAP (Generally Accepted Accounting Principles).

answered Dec 5 '09 at 00:19
Rs Holman
596 points


Depends completely on your own accounting skills. Between now and six months from now, you will have taxes to pay, both on any revenue (albeit “minimal”) that comes in, and on any salaries that go out. Certain decision you make now (S corp vs. LLC vs. C corp, for example) may be hard to undo later and have very specific tax implications.

Bottom line: get a copy of QuickBooks (or use the online version -- I haven't tried it but I plan to soon), set up your accounts, and see how much you're comfortable doing yourself. Ultimately it's not an all-or-nothing proposition: you can pay for certain advice as needed, while doing most of the work yourself. Just make sure you're checking with a tax professional at certain key decision points: incorporation, end of year, payroll set-up, etc.

Good luck!


answered Oct 11 '09 at 09:08
784 points


I do the bookkeeping (mostly procrastinated) but will get a CPA before tax time.

A previous venture with just me involved as an S corp required no CPA - there was essentially no money in it and turbo tax worked fine.

Once you involve more than one person a CPA is probably necessary, though make sure you get a competent one.


I just started using (free!) (a user of this forum is a founder I believe) and I like it. It is basic P&L stuff - and it is simple. You do need to know what is going on in your business and when you get to doing payroll and all that and have customers you will want an outside CPA, but, you can use this service or similar ones to keep an eye on the bottom line and do it simple.

answered Oct 29 '09 at 07:14
Tim J
8,346 points


Great answers above. I agree, you need to talk to a CPA firm for taxes, but you can do your own book-keeping.

  1. You must get a copy of Quick Books (desktop or online version)
  2. Talk to a CPA firm, they will create the Charts of Accounts, they can also walk you through the process of how to enter invoices, revenue, and expenses, and then at the end of the month, how to reconcile. (If you dont create the correct setup now, it will be more costly for the person filing taxes to go through everything). Also, sometimes the CPA firms - if you retain them for taxes, they may not even charge you for setting up your Charts of Accounts.
  3. It is fairly straight-forward, once you get it. You can do that until it is time to file taxes.
  4. End of the year, go back to the CPA firm, they will review QuickBooks, fix anything you code differently in terms of assigning expense categories, etc. You can have them file returns & they will also provide vouchers for the Est. Tax Payments for the year.
  5. You dont know what you dont know. The biggest benefit working with CPA firm is that they can give you advice in terms of your setup, your expenses, taxes, etc, but again, that will come in as you grow.
answered Oct 11 '09 at 14:23
Puneet Gangal
281 points


If you are not comfortable with bookkeeping (the day-to-day stuff), and it sounds like your not, I agree with the suggestion to hire a service. Regardless, get an accountant for taxes who is experienced in your state. A good accountant will save you more on taxes then she/he costs. (Mine does)

answered Dec 5 '09 at 07:19
649 points

1 is the coolest solution I've come across personally.

  • They have a super cool API which allowed for a neat integration with my ecommerce site.
  • Their design is also way above average.
answered Jun 18 '12 at 06:14
Mark Boulder
118 points


I don't think this is a great area for you to spend your time. If you really don't have money to outsource this there are some user friendly web based accounting apps built by non accountants for non-accountants. The best is probably At some point though, earlier rather than later, you will want an accountant (outsourced) and will keep your numbers on Simply Accounting or Quickbooks.

answered Oct 29 '09 at 05:24
Mark Mac Leod
41 points


If you go with quickbooks, use the online version!

Really, you should have consulted an experienced small business CPA on Day 0, before you ever decide on your business form (LLC, partnership, etc). You can really screw yourself if you mess this up on day 1.

To name one common mistake, people sometimes form their startup as an LLC taxed as a partnership (the default). Later they realize that they can't give an employee stock without also making him or her a partner. Opps.

At a bare minimum you should hire a CPA or EA to review your tax situation ASAP, if you have not already done son. A false tax related assumption on your part can be VERY expensive! An ounce of prevention is worth a pound of cure where taxes are concerned!

answered Oct 29 '09 at 06:54
Jim In Texas
228 points
  • FYI, the IRS does allow an LLC to change its tax structure. If you start off with partnership status (or corporate), you can later change to the other if it makes more sense. – Zuly Gonzalez 14 years ago


Don't. Or At least get quickbooks training from an Accountant/Bookkeeper. Let them do the rest.

answered Oct 11 '09 at 12:12
446 points


I agree. is the best SAAS accounting option. You can tailor it to your needs, big or small, and it is easy to use. Also, it integrates seamlessly with iOS POS systems, like VendHQ (for whom I work) and Lightspeed.

You can trial any of these cloud-based systems for free for the first little while - which is perfect for a new business that is finding its legs.

Best of luck :)

answered Jun 25 '12 at 08:59
11 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics: