Accounting services for startups come in two shapes that founders confuse: the bookkeeping service that categorises the bank feed, books the payroll and closes the month, and the accounting firm that files the returns, handles the R&D credit and answers the judgement questions. An accounting and bookkeeping service for startups bundles both for a monthly fee, and startup accounting services sold by a firm usually mean the second with a little of the first. What none of them does is decide the hiring plan or read the runway; that is the record the founder keeps, which the free payroll for startups calculator on this site works and Pro keeps.
What a bookkeeping service does each month
It connects to the bank and the card, categorises the transactions, books the payroll provider's journal, reconciles the accounts and delivers a profit and loss and a balance sheet by a date each month. Judge it on the close date and on whether the payroll lands as the loaded cost with the employer taxes separated; a service that books salaries alone is under-reading the burn on the founder's behalf.
What an accounting firm does that a service does not
The firm signs the tax return, prepares the R&D credit claim, advises on entity and state questions, handles the audit if an investor asks for one, and reads the record the service kept. Its fee is for judgement and signatures; paying it to categorise transactions is expensive and slow. Many startups run a service for the monthly close and a firm for the filings.
What the startup keeps itself
The hiring plan, the scenarios and the runway are the founder's record, because they are decisions rather than bookkeeping. The calculator on this site works the payroll and the runway from the headcount, the salaries, the taxes and the cash; Pro keeps the scenarios and syncs the approved payroll into the books the service closes, so the service, the firm and the board read the same figure.
Questions people ask about accounting services for startups
Should a startup hire a bookkeeping service or an accounting firm?
A service for the monthly close, a firm for the filings and the judgement calls; an accounting and bookkeeping service for startups bundles the two, and the founder still keeps the runway record.
What should a startup ask a bookkeeping service before signing?
The day of the month the books close, whether payroll is booked as the loaded cost with employer taxes separated, and what happens to the ledger if the startup leaves.
Does an accounting service tell the founder the runway?
Rarely as a standing figure; the runway is cash over net burn read from the closed month, which the founder can work with the calculator on this site as soon as the close lands.