The benefits of outsourcing accounting
As any founder will tell you, starting a company is hard work. In the early days, it’s critical to be hyper-focused on building your product and brand, developing relationships, creating partnerships and generating sales. You’ll likely also be busy hiring, finding office space, and dealing with paperwork. The last thing you should be doing is poring over receipts, invoices, bills and expenses. As such, a number of services have cropped up that enable startups to outsource nearly any task that isn’t within their core competencies, and accounting is one of those areas that is often the first to go.
Outsourcing your accounting is the most cost-effective method for handling finances in the early stages because you’re able to pay for only the services you need, while saving the cash, time and energy you desperately need when developing a business. If your financial status doesn’t warrant hiring an in-house accountant or a CFO (which generally doesn’t happen until you’re earning around $250K per year), check out some of the below services, which can help you manage your day-to-day bookkeeping, regulatory compliance, accounts receivable, financial close and taxes. The platforms most recommended by the Stacklist community are software-plus-human hybrids that give early-stage startups deep insight into their financial operations, as well as the peace of mind that their day-to-day cash flow is being handled by a dedicated accounting team.
The best outsourced accounting services
Bench: In addition to software that gives you collaboration capabilities, interactive financial statements and secure online document management, Bench offers bookkeepers experienced in small-business accounting to handle your needs.Marc Cenedella, Founder and CEO of Knozen, explains, “Our seed-stage firm, who’s our backer, recommended them. They have an actual human being behind it who takes care of stuff, and it’s just an awesome service.” Bench has three pricing options, ranging from $135-$365 per month, plus a customized enterprise option, and pricing depends on how many banks and credit cards you’d like tracked, and if you’d like integration with any payroll providers.
inDinero: Billing itself as a one-stop-shop for all of your back-office needs, inDinero will take over all of your accounting, tax and payroll needs so that you can focus on building your business. Their software is made to be user-friendly, with entrepreneur needs in mind, which is combined with its accountants who oversee your financial operations. Users appreciate inDinero’s software, which includes helpful analytics and “a great/terrifying ‘This many days left until you’re bankrupt’ indicator, and that’s a nice motivator,” says Steve Kaliski, CTO of Bowery. Wade Foster also points out that inDinero is “a fellow Y Combinator company, so we get a great combo deal. I also love the analytics that come along with it, and the fact that someone handles our books for us.”
Propeller Industries: A slightly more boutique option, Propeller calls itself a “cost-effective” option for early-stage startups who are looking to outsource their finance and accounting operations to a team that’s also experienced in driving growth and financial success. The team includes expertise at all levels—from bookkeepers to controllers to CFOs—and clients pay only for the services they need. Its cloud-based software covers basic financial needs like paperless A/P, electronic routing, approvals and payments, and online payroll management, in addition to comprehensive financial reporting, including one-click financial reports and variance analysis, as well as real-time reporting for management teams. Tinkergarten founder and CEO Brian Fitzgerald explains, “They’re a startup too, and they’re trying to provide the kind of accounting and CFO functions that early-stage companies need. For a monthly fee, they will get you set up on all the tools you need for bookkeeping and accounting, they’ll generate financial statements for you, and they can even do more strategic things on the financial side. It’s mostly a service shop, but they also plug in a bunch of tools on their end. They seem to really know what we need and don’t need.”
Many startups feel that once they’re successfully out of the seed stage, it’s time to upgrade to a dedicated, full-time accountant (either in-house or outsourced). Until you get to that point, however, these services offer a great balance of user-friendly software and hands-on professional services that will help you focus on getting your startup to the next level.