The 6 Best Accounting Software for Startups

You’ve just started your dream business. You’ve poured your heart into it, designed the perfect product, and are eager to see it take off. But as the weeks pass, many invoices, receipts, and financial reports start piling up on your desk. You know you need to make sense of it all, but where do you begin?

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If that sounds overwhelming, you’re not alone.

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The Small Business Report Accounting reveals that 60% of small business owners believe they may lack sufficient knowledge in finance and accounting. It’s not surprising—juggling marketing, sales, and product development is already tough enough.

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The last thing any startup founder wants is to get lost in the maze of financial reports and tax calculations. But neglecting these numbers can be risky, even fatal.

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According to a report by PCMag referencing the US Business Bureau Index, 20% of small businesses that do not use accounting software struggle to survive their first year.

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So, how do you avoid becoming part of that statistic? It starts with getting the best accounting software for your startup.

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How Accounting Software Works

Accounting software automates and streamlines the financial management process for businesses, thereby offering a digital solution to tasks that were traditionally handled manually. Here’s how accounting software works and how it can benefit startups:

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Automation of Financial Tasks

Startups often struggle with keeping up with everyday bookkeeping activities like tracking expenses, generating invoices, and recording payments. With accounting software, these processes become automated.

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The software can automatically categorize expenses, send out recurring invoices, and update payment statuses, significantly reducing the time and effort spent on manual entries. This automation not only saves time but also minimizes human error.

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Real-Time Financial Data Tracking

Accounting software allows startups to monitor their financial status in real-time. By connecting to business bank accounts and credit cards, the software continuously pulls transaction data, giving startups an up-to-date view of their cash flow, revenue, and expenses.

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This real-time tracking provides immediate insights into the company’s financial standing, helping founders make faster, data-driven decisions.

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Integration with Other Business Tools

Modern accounting software doesn’t work in isolation—it integrates seamlessly with other tools that startups commonly use, such as customer relationship management (CRM) platforms, eCommerce systems, and payroll services.

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This integration enables a more cohesive approach to managing all aspects of a business. For instance, an accounting software tool can sync with eCommerce platforms to automatically record sales and with payment gateways to update transaction records.

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Compliance and Tax Management

Compliance with tax regulations can be a daunting task for startups. Accounting software helps alleviate this burden by automating tax calculations and generating accurate financial reports that are tax-compliant.

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Many accounting software solutions are designed to adhere to local tax laws, automatically calculating sales tax, VAT, or other relevant taxes based on the business's location.

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In addition, they help businesses generate important reports, such as profit and loss statements or balance sheets, which help file taxes. Some software even supports tax filing directly from the platform, thereby simplifying the entire process for startups.

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Top 6 Accounting Software for Startups

With numerous startup accounting software available, it’s important to select a platform that aligns with your business’s unique needs.

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Below, we highlight the top 6 accounting software solutions to help startups manage their finances efficiently.

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#1 Brex: Best for Integrated Corporate Card Solution

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Brex is a comprehensive financial management platform that helps startups manage expenses, issue corporate cards, and streamline accounting processes all in one place.

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Its integration with top accounting platforms, like QuickBooks and Xero, makes it an ideal choice for businesses that want to centralize their financial operations while maintaining full visibility over spending.

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Features

• Corporate Card Integration: Brex provides startups with corporate cards directly linked to their financial management platform, enabling real-time expense tracking and instant categorization.
• Expense Management: Startups can automate expense reporting, approval workflows, and reimbursement processes, saving time and reducing manual errors.
• Multi-Currency Support: For businesses operating internationally, Brex supports multiple currencies, simplifying transactions and reporting across borders.
• Built-In Accounting Integrations: Brex easily integrates with popular accounting software like QuickBooks, Xero, and NetSuite, allowing startups to sync their expenses, reconcile transactions, and maintain up-to-date financial records.
• Automated Receipt Matching: Using AI, Brex automatically matches receipts to corresponding transactions, reducing the hassle of manual input and ensuring compliance.

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Pros

• Brex automates many financial processes, such as expense tracking, approval workflows, and receipt matching, reducing the need for manual input.
• The seamless connection between Brex's corporate card and its financial management tools simplifies real-time spending management.
• Brex offers a competitive rewards program, allowing startups to earn points on everyday purchases.
• Businesses can set customized spending limits for employees, giving them control over company expenses.
• Startups can access corporate credit without needing a personal guarantee, which is advantageous for founders and business owners.

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Cons

• While Brex excels at expense management and financial integrations, it lacks some comprehensive accounting features like advanced reporting or tax management found in dedicated accounting software.
• Brex is primarily available to U.S.-based startups, limiting access for international businesses.
• Payments through Brex can only be made via ACH transfers or wires, which may be limiting for businesses accustomed to other payment methods.

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Pricing

Brex provides three pricing plans:

• Essentials (free per user/month): Ideal for startups and expanding businesses.
• Premium ($12 per user/month): Perfect for midsize companies aiming for growth.
• Enterprise (custom pricing): Suitable for large enterprises.

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#2 Xero: Best for Offering Scalable Accounting Solutions With Advanced Reporting

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Xero is a cloud-based accounting software that simplifies financial management for startups and small businesses. It offers several features, including invoicing, bank reconciliation, and financial reporting, while allowing multiple users to collaborate from anywhere.

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With its intuitive interface and powerful integrations, Xero has become a popular choice for startups looking to streamline their accounting processes.

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Features

• Bank Reconciliation: Xero automatically imports and categorizes your bank transactions, making reconciliation hassle-free. It also allows you to match transactions with just one click.
• Invoicing and Payments: You can easily create and send customized invoices, track payments, and set automatic reminders for overdue invoices.
• Expense Tracking: Xero enables you to capture and categorize expenses, ensuring a clear view of where your money is going.
• Multi-Currency Support: For startups that operate globally, Xero offers multi-currency functionality, allowing you to handle transactions in various currencies and monitor exchange rates.
• Project Tracking: The platform provides a project management tool that lets you track time, costs, and profitability for individual projects.
• Real-Time Reporting: Xero generates up-to-date reports on cash flow, profit and loss, and balance sheets, helping you stay on top of your startup's financial health.

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Pros

• Xero’s intuitive design makes it easy for non-accountants to navigate and manage finances.
• From invoicing to payroll, Xero covers all the bases a startup needs for financial management.
• Multiple users can work in the software simultaneously, making it easier for teams to collaborate in real-time.
• Xero’s ability to connect with different third-party applications enhances its flexibility and usability.
• Startups dealing with international transactions will benefit from Xero’s multi-currency support.

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Cons

• Xero does not offer phone support, which can be a disadvantage for startups needing immediate assistance.
• While Xero is user-friendly, some advanced features may take time to master, especially for users unfamiliar with accounting principles.
• Certain features like payroll and project tracking may require additional costs, which can add up for a startup on a budget.

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Pricing

• Early: $12/month – Best for sole traders and very small businesses, offering limited invoicing and expense tracking.
• Growing Plan: $34/month – Includes all core features with unlimited invoicing and bill payments.
• Established Plan: $65/month – Designed for larger startups that need multi-currency support and more advanced financial management.

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Each plan comes with a 30-day free trial, allowing startups to test the platform before committing.

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#3 QuickBooks Online: Best for Invoicing, Expense Tracking, and Tax Filing

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QuickBooks Online is a widely used cloud-based accounting software designed to meet the financial management needs of small businesses and startups. It’s known for its ease of use, scalability, and comprehensive feature set that simplifies everyday accounting tasks.

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Startups can use QuickBooks Online to manage their finances, track expenses, and generate reports, all while remaining compliant with tax regulations. The software’s robust functionality, combined with automation, makes it ideal for businesses looking to streamline their bookkeeping and accounting processes.

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Features

• Invoicing and Billing: Create professional invoices, track payments, and send reminders to clients effortlessly.
• Expense Tracking: Automatically import and categorize expenses from bank accounts and credit cards, making expense management more streamlined.
• Financial Reporting: Generate detailed reports such as profit and loss statements, balance sheets, and cash flow reports for better decision-making.
• Payroll Integration: Integrates seamlessly with QuickBooks Payroll for managing employee salaries, tax filings, and benefits.
• Tax Preparation and Filing: Simplifies tax preparation with automatic tax calculations, and helps generate reports needed for filing taxes.
• Multi-Device Accessibility: Access your accounting data from anywhere using a desktop, tablet, or mobile app, making it convenient for on-the-go entrepreneurs.

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Pros

• QuickBooks Online is intuitive and easy to navigate, even for users without any accounting experience.
• Generates detailed reports that provide actionable insights into a startup’s financial health.
• Automates repetitive accounting tasks such as invoicing and expense tracking, saving valuable time for startups.
• Integrates with third-party tools like Shopify, PayPal, and Gusto, enhancing business workflows.
• The mobile app allows startups to manage their finances and send invoices while on the go.

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Cons

• As startups grow and need additional features, they may find that QuickBooks’ higher-tier plans are costly.
• While the basic functions are easy to grasp, more complex features like reporting and inventory tracking may require some learning.
• Customization options in financial reports are somewhat limited compared to other accounting software.

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Pricing

• Simple Start: $25/month
• Essentials: $50/month
• Plus: $80/month
• Advanced: $180/month

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Each plan comes with a 30-day free trial.

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#4 Zeni: Best for Offering Detailed Financial Insights to Manage Burn Rate and Secure Funding

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Zeni is an AI-powered accounting software that offers startups a unique approach to bookkeeping and financial management.

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With its automated daily bookkeeping services, Zeni ensures startups have real-time insights into their financial performance, eliminating the need for manual data entry.

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By using artificial intelligence, Zeni provides startups with a clear financial picture at any given time, making it easier to manage cash flow, track expenses, and make informed business decisions.

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Features

• AI-Powered Automation: Zeni automates bookkeeping tasks such as categorizing expenses, reconciling bank accounts, and generating financial statements. This reduces human errors and frees up time for founders to focus on scaling their businesses.
• Real-Time Financial Dashboard: Zeni provides a comprehensive dashboard with real-time data on cash flow, profit and loss, accounts payable, and more. This allows startups to monitor their financial health at a glance.
• Financial Planning and Analysis: The platform offers financial planning tools, helping startups create forecasts, monitor burn rates, and manage budgets effectively.
• Tax Preparation and Filing: Zeni also offers tax services, handling tax preparation and filing to ensure startups comply with tax regulations.
• Multi-Entity Support: For startups with multiple entities, Zeni offers support for consolidated reporting, making it easier to manage finances across different business units.

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Pros

• The AI-driven automation saves time and ensures accuracy in financial management.
• Startups can make quick decisions based on real-time financial data, which is crucial for fast-growing businesses.
• Zeni pairs AI with human expertise, offering startups access to financial experts who can handle complex issues and provide strategic advice.
• Zeni’s services scale with the startup, accommodating businesses as they grow and their financial needs become more complex.

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Cons

• Zeni's services, especially with its expert financial support, may be more costly for early-stage startups with limited budgets.
• Some users may find the level of customization in reporting or dashboard setup limited compared to other platforms.
• While the platform is user-friendly, some startups might initially find it challenging to navigate the AI-powered features.

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Pricing

The image below shows pricing details for AI-bookkeeping. Other pricing details can be found here.

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#5 FreshBooks: Best for Offering Efficient Invoicing and Expense Tracking to Freelancers and Service-Based startups

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FreshBooks is a cloud-based accounting software designed specifically for small businesses and freelancers. Founded in 2003, FreshBooks has grown to become a popular choice among startups due to its user-friendly interface and robust features tailored to meet the unique needs of entrepreneurs.

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Features

FreshBooks offers several features to help startups manage their finances effectively:

• Invoicing: Create and send professional-looking invoices in minutes, with options for recurring billing and automatic payment reminders.
• Expense Tracking: Easily track expenses by uploading receipts and categorizing spending, helping to maintain accurate financial records.
• Time Tracking: Built-in time tracking tools allow users to log billable hours and link them directly to invoices, ensuring accurate billing.
• Project Management: Manage projects and collaborate with team members and clients, providing visibility into progress and financials.
• Reporting: Generate insightful financial reports, such as profit and loss statements, revenue summaries, and expense reports, to monitor business performance.
• Multi-Currency Support: Handle transactions in multiple currencies, making it ideal for startups that operate internationally.

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Pros

• FreshBooks is known for its easy-to-navigate design, making it accessible for users with varying levels of accounting experience.
• FreshBooks offers responsive customer support through various channels, including phone, email, and live chat, ensuring users receive assistance when needed.
• Users can customize invoices to reflect their brand, adding logos and colors to enhance professionalism.
• The FreshBooks mobile app allows users to manage their finances on the go, providing flexibility for busy entrepreneurs.
• FreshBooks integrates easily with third-party applications like PayPal, Stripe, and G Suite, thereby enhancing its functionality.

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Cons

• FreshBooks does not have a built-in payroll feature, which may require startups to use a separate service for payroll management.
• While FreshBooks offers different pricing plans, some users may find the costs increase significantly as their business scales, particularly if they require additional features or clients.
• The software’s inventory management capabilities are relatively basic, which may not be sufficient for startups with more complex inventory needs.

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Pricing

You can test out FreshBooks with a 30-day free trial. If you continue using it, pricing ranges from $15 to $55 per month. However, by opting for an annual payment, you can save an additional 10%. They also run special promotions, so keep an eye out for those.

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#6 Sage Business Cloud Accounting: Best for Offering Comprehensive Accounting Solutions With Advanced Features for Inventory Management and Reporting

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Sage Business Cloud Accounting is a robust cloud-based accounting solution that helps startups manage their finances efficiently while providing the tools needed to scale. The software caters to businesses of all sizes, making it a versatile choice for startups that aim to establish a solid financial foundation.

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Features

• Cloud-Based Access: As a cloud solution, Sage allows users to access their financial data anytime, anywhere, making it convenient for startups with remote teams.
• Invoicing and Billing: Create professional invoices, automate billing processes, and set up recurring payments to ensure timely cash flow.
• Expense Tracking: Easily track expenses by linking bank accounts and credit cards, which simplifies the reconciliation process and helps monitor spending.
• Financial Reporting: Generate customizable reports, including profit and loss statements and cash flow forecasts, providing valuable insights into financial performance.
• Multi-Currency Support: Ideal for startups with international clients, Sage allows transactions in multiple currencies, complete with automatic conversion rates.
• Integrations: Connect with various applications like CRM systems, eCommerce platforms, and payment processors to enhance functionality and streamline workflows.

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Pros

• The intuitive design makes it easy for users to navigate, even those without extensive accounting experience.
• Offers a wide range of tools necessary for managing finances, from invoicing to reporting, all in one platform.
• As a business grows, Sage can accommodate increasing complexity, making it a long-term solution for startups.
• Provides robust customer service options, including live chat, phone support, and an extensive knowledge base for troubleshooting and guidance.

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Cons

• While it offers a lot of features, the cost can be a concern for very early-stage startups with limited budgets.
• Although the basic features are easy to use, some users may find the more advanced functionalities require additional learning.
• Some users may find the reporting and invoicing customization options somewhat limited compared to competitors.

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Pricing

Sage provides a 30-day free trial, allowing you to assess if it suits your startup's requirements. The Accounting Start plan is priced at $11 per month, while the Accounting Standard plan costs $22 per month. You can upgrade or cancel your plan whenever you choose.

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How to Choose the Best Accounting Software for Your Startup

Selecting the right accounting software for your startup can significantly impact your financial management and business operations. Here’s a guide to help you go through this process effectively.

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Assess Your Business Needs

Identify the unique financial requirements of your startup. Consider the following aspects:

• Are you a service-based business, product-based, or a combination of both? This will influence the features you require, such as inventory management or client invoicing.
• Estimate the number of transactions you expect to process monthly. High transaction volumes may require software with robust processing capabilities.
• Evaluate whether you need basic bookkeeping features or more advanced capabilities like multi-currency support, project tracking, or payroll management.

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Consider Your Budget

Budget is a significant factor in choosing accounting software. Here are some tips to help you manage costs effectively:

• Most accounting software providers offer tiered pricing based on features, user access, or transaction limits. Familiarize yourself with these models to find the best fit for your budget.
• Be aware of potential hidden costs such as additional fees for extra users, advanced features, or customer support. Thoroughly review the pricing structure to avoid surprises.
• Consider the value the software brings to your business. An investment in quality accounting software can save time, reduce errors, and help you make informed financial decisions, ultimately paying off in the long run.

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Look for Industry-Specific Features

Certain accounting software may cater specifically to your industry, offering specialized features that can enhance your operations. For instance:

• If you run an online store, you might need software that integrates seamlessly with your e-commerce platform, manages inventory, and tracks sales tax.
• Service-based businesses may benefit from features like time tracking, project management, and client invoicing tailored for billable hours.

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Check User Reviews and Recommendations

User feedback can provide valuable insights into the pros and cons of different accounting software options.

• Explore online reviews on platforms like G2, Capterra, or Trustpilot to gauge user satisfaction and common issues.
• Ask fellow entrepreneurs, mentors, or business advisors about their experiences with accounting software. Personal recommendations can lead you to reliable solutions that others have successfully implemented.

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Plan for Scalability

Your accounting needs may change as your startup grows. Consider the following when selecting accounting software:

• Choose software that can scale with your business. Look for features that support increased transaction volumes, additional users, and expanded functionalities.
• Ensure the software can integrate with other tools you may adopt in the future, such as CRM systems or e-commerce platforms. This will streamline your operations and reduce data silos.

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Wrapping Up

Choosing the best accounting software for your startup can impact your financial management and success.

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As we’ve discussed, each of the six software options highlighted—Brex, Xero, QuickBooks Online, Zeni, FreshBooks, and Sage Business Cloud Accounting—offers unique features and capabilities tailored to meet the needs of growing businesses.

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From automation of tedious tasks to robust reporting features, the right accounting software can empower startups to make informed decisions based on real-time data.

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As you shop for the best accounting software for your startup, ensure you assess your specific needs, budget constraints, and desired features. Also, explore free trials and demos, as these tools allow you to evaluate how well a software aligns with your business processes before committing.

FAQs

Which software is best for accounting?

The best accounting software for startups depends on their specific needs, budget, and technical expertise. Popular options include QuickBooks Online, Xero, FreshBooks, etc.

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How do I set up an accounting system for a startup?

Here are steps for setting up an accounting system for a startup:

• Choose an accounting method (Cash basis or accrual basis).
• Select an accounting software
• Create a chart of accounts to categorize all financial transactions.
• Link bank and credit card accounts
• Implement a record-keeping system
• Track income and expenses
• Manage inventory (if applicable)
• Prepare financial statements
• Hire a professional accountant

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How do I manage startup accounts?

Managing startup accounts involves:

• Choosing the right accounting software.
• Implementing a robust record-keeping system.
• Reconciling accounts regularly.
• Tracking income and expenses closely.
• Managing inventory effectively (if applicable).
• Preparing financial statements regularly.
• Hiring a professional accountant.
• Staying updated on tax laws and regulations.
• Managing debt wisely.
• Planning for growth.

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We can help!

At Levy, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business.
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Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.

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