Bookkeeping for Startups 101: Including Costs, Services, Software, and Checklist

Any business, big or small, needs to keep track of its finances.

This is where bookkeeping comes in.

Bookkeeping is the process of recording, storing, and retrieving financial records.

It helps businesses to track their income and expenses, understand their financial position, and make sound financial decisions.

For startups, bookkeeping is especially important.

In addition to keeping track of costs and income, startups need to track their spending on services and software.

They also need to create a checklist of items that need to be accounted for each month.

By following these simple tips, startups can get their bookkeeping off to a good start.

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What is bookkeeping for startups 101?

Bookkeeping is often one of the last things on a startup founder’s mind.

However, it is essential to maintain accurate financial records from the very beginning.

Not only will this give you a clear picture of your startup’s financial health, but it will also help you to avoid costly mistakes down the road.

There are several bookkeeping software options available, and it is important to choose one that best meets the needs of your startup.

Long-term success

Once you have selected software, you will need to assign tasks to ensure that all financial transactions are properly recorded.

Bookkeeping may not be the most glamorous part of starting a business, but it is essential to ensuring long-term success.

Why is bookkeeping important for startups 101?

When starting a business, there are a lot of tasks that need to be completed to get the ball rolling.

Bookkeeping is one of those tasks.

Essential for startups

Though it may seem tedious, bookkeeping is essential for startups.

It helps assign tasks, keep track of startup accounting, and support the team.

Assigning tasks is important so that no one person is overwhelmed with work.

This also allows for tasks to be completed promptly.

Keeping track of startup accounting is important because it ensures that the business is making a profit.

Support the team

Finally, supporting the team is important because they are the people who make the business run smoothly.

Without their hard work, the business would not be successful.

In conclusion, bookkeeping may seem like a chore, but it is essential for startups.

It helps keep the business organized and running smoothly.

8 bookkeeping basics for startups you need to know about

If you’re starting a business, you need to know the basics of bookkeeping.

Bookkeeping is the process of recording and storing financial transactions.

It’s important to keep accurate records of your income and expenses so you can make sound business decisions.

Here are eight bookkeeping basics for startups:

1. Open a separate bank account

Any business owner will tell you that one of the keys to success is maintaining a healthy cash flow.

This can be a challenge for startups, which is why it’s essential to have a separate bank account for your business.

By keeping your personal and business finances separate, you’ll be able to better track your expenses and income.

Healthy cash flow

Additionally, most banks offer special services and account types for businesses.

These can help you save money on startup fees and accounting services, which can free up more cash for your business.

So if you’re starting a new business, be sure to open a separate bank account. It’s one of the best ways to maintain a healthy money flow.

2. Keep track of all your income

When you’re running a startup, it’s critical to keep track of all your income.

This can be a daunting task, especially if you’re dealing with multiple streams of revenue.

However, there are a few simple processes you can follow to ensure that all your income is properly accounted for.

Financial information

First, make sure you have access to all the relevant financial information.

This includes statements from your bank, invoices from clients, and records of any other payments you’ve received.

Once you have this information, you can start organizing it into a system that works for you.

For example, you might create separate folders for each type of income, or you might choose to organize everything by month.

System in place

The important thing is that you have a system in place that will allow you to easily find the information you need.

By taking the time to track your income carefully, you can keep your startup on solid financial footing.

3. Keep track of all your expenses

Whether you’re a freelance contractor or running a startup, it’s important to keep track of your expenses.

This not only helps you stay organized, but it can also save you money come tax season.


There are a variety of service types that can help you keep track of your expenses, from simple tracking apps to full-fledged accounting software for startups.

No matter which service you choose, be sure to set up a system that works for you and your team.

Review your expenses

Once you have a system in place, make sure to review your expenses regularly.

This will help you identify any areas where you may be overspending.

Lastly, don’t forget to enlist the help of a support team when needed.

They can offer valuable insights and advice on how to better manage your expenses. By following these tips, you can take control of your finances and keep your startup on track for success.

4. Automate bookkeeping tasks

Startups typically don’t have the luxury of a dedicated bookkeeper on staff, which can make it difficult to stay on top of financial tasks like invoicing, tracking expenses, and preparing tax returns.

Automation tools

However, there are several bookkeeping automation tools available that can make these tasks much easier.

One such tool is Xero, which offers a suite of apps that can automate many of the most time-consuming bookkeeping tasks.

Another option is QuickBooks Online, which provides users with the ability to track expenses, manage invoices, and run reports.

Regardless of which tool you choose, automating your bookkeeping tasks can save you a significant amount of time and help you to keep your financial house in order.

5. Hire a professional accountant or bookkeeper

Any business owner will tell you that good accounting is essential to the success of a company.

Yet, for many startups, the task of hiring a professional accountant or bookkeeper can seem daunting.

How do you find someone you can trust with your finances?

And how do you know if they’re qualified to give expert advice?

Ask for recommendations

The first step is to ask around for recommendations.

Talk to other business owners and see who they use for professional accounting services.

Research online

Once you have a few names, do some research online and check out each accountant’s or bookkeeper’s website.

Look for someone with experience working with startups, and make sure they’re certified by a reputable organization such as the American Institute of CPAs.

Find a professional accountant

Once you’ve found a few candidates, invite them in for an interview so you can get to know them better and decide if they’re the right fit for your company.

With a little time and effort, you can find a professional accountant or bookkeeper who will help your startup thrive.

6. Prepare financial statements

All businesses, whether established or startups, need to prepare financial statements. Statement of finances are an essential part of financial reporting and provide information about a company’s financial health.

They can be used to assess financial performance, make decisions about investment and funding, and measure compliance with financial regulations.

Main financial statements

The three main financial statements are the balance sheet, income statement, and money flow statement.

Startups should keep accurate financial records from the outset, as this will make it easier to prepare statements of finances later on.

Financial statements can be prepared using software such as QuickBooks or Xero, or by hiring a professional accountant.

Regardless of how they are prepared, statements of finances are an essential tool for startups and other businesses.

7. Review your records periodically

There are a few early-stage startup companies who want to know how they should go about reviewing their records periodically.

Pull your tax return

This is a great question, and the answer is quite simple.

The first thing you need to do is pull your tax return.

This will give you a good idea of what service types were provided and how much money was made during the year.

Review your bank statements

Then, you can review your bank statements and credit card statements to see if there are any discrepancies.

Finally, you should check in with your accountant or bookkeeper to make sure that everything is up-to-date and accurate.

By taking these steps, you can be sure that your early-stage startup is on track and that your records are in order.

8. Stay organized

As a startup founder, it’s easy to get bogged down in the day-to-day details of running a business.

However, staying organized is essential to keeping your startup on track.

Use accrual accounting

One way to stay organized is to use accrual accounting.

This type of accounting tracks expenses and revenue as they are incurred, rather than when they are paid.

This can help you keep tabs on your startup’s financial health and make sure that you are not overspending.

Small businesses can also benefit from using accrual by simplifying their bookkeeping and saving time.

Keep detailed records

Another way to stay organized is to keep detailed records of your startup’s progress.

This can include everything from customer feedback to sales numbers.

Tracking this data can help you identify patterns and spot areas for improvement.

Review your progress

Finally, make sure to set aside time each week to review your progress and plan for the future.

This will help you stay on top of your startup’s development and make necessary course corrections along the way.

By following these tips, you can ensure that your startup remains well-organized and on track for success.

How to start with bookkeeping for your startups?

For early-stage startups, good accounting is critical but the process can seem daunting.

Bookkeeping isn’t as complicated as it might first appear and keeping good records from the beginning will save you a lot of headaches down the road.

The most important thing to remember when starting your bookkeeping is to keep things organized and consistent.

Decide on a naming convention for your files and stick to it.

Determine how often you’ll update your books and make sure you do it regularly. good habits early on will make bookkeeping much simpler down the line.

If you’re not sure where to start, there are plenty of resources available online and in the library to help you get started with bookkeeping for your startup.

Taking the time to learn early on will pay off in the long run.

Bookkeeping for startups: DIY or outsource?

As a startup, you have enough on your plate without having to worry about bookkeeping.

So, should you do it yourself or outsource the task?

The simple answer is that it depends on your company’s needs.

If you have a simple bookkeeping system, then you may be able to get by doing it yourself.

However, if your startup is growing quickly or you have complex financial information, then it may be worth outsourcing to a bookkeeping service.

When making your decision, consider how much time you have to dedicate to bookkeeping, how comfortable you are with handling financial information, and whether you have the software and tools you need to do the job effectively.

Ultimately, there is no right or wrong answer when it comes to bookkeeping for startups – it all comes down to what works best for your business.

What are examples of services?

There are a number of services that can take care of the books for you.

One such service is Xero, which offers access to accounting software and expert support.

This can be a huge help for startups that don’t have the resources to hire an in-house accountant.

Another option is Bench, which provides access to a team of bookkeepers who can handle everything from invoicing to tax preparation.

This can free up your employees to focus on other aspects of the business.

Finally, FreshBooks is cloud-based accounting software that offers features specifically designed for small businesses.

This can be a great option for startups that need to track expenses and manage invoices for customers.

All three of these options can provide valuable assistance for startups trying to keep on top of their bookkeeping.


As a startup, you have a lot on your plate.

From product development to marketing to sales, a million things are competing for your attention.

Bookkeeping might not seem like the most exciting task on your to-do list, but it is essential for keeping your business organized and compliant with tax laws.

Fortunately, there are plenty of resources available to help you get started.

Checklist software like can help you keep track of what needs to be done and when.

And several bookkeeping services will do the heavy lifting for you, including preparing and filing your tax returns.

While it might not be the most glamorous part of starting a business, taking care of your bookkeeping from the outset will save you a lot of headaches down the road.

So be sure to add it to your checklist and cross it off when it’s done!

Jordan Salas
Jordan Salas

Jordan is an experienced CPA and an author & editor at Financopedia. Over the past 12 years, he has written tax and financial content for leading brands. His writing has been featured in Forbes, The Los Angeles Times, Walstreet journal, and more. Jordan enjoys watching old movies and hiking in his free time.

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