by Karen Koedding, Senior Manager
Starting a tech startup is challenging yet exciting. However, managing finances can come as the first roadblock for founders. This is where outsourcing comes in. Businesses, especially startup founders, can significantly benefit from delegating their tax filings, compliance, financial reporting, audits, and all aspects of finance and accounting.
Here’s why we think every startup founder should outsource their finance and accounting.
Your time is valuable; spend it on what matters most to your start-up’s growth.
You might know how to do the basics, or maybe you were an accountant before you were a founder, but a key tenet of productivity is:
“Just because you can, doesn’t mean you should.”
Delegate to an outsourced finance and accounting firm and utilize that time to focus on your strategy, product, team, and sales.
Founders have fiduciary responsibilities for their business – tax compliance, payroll, maintaining accurate accounting records, ensuring proper internal controls, and completing required audits. Knowing what needs to happen takes expertise and experience. This is a lot of work for you or your co-founder(s). Ideally, your outsourced firm should handle all of this.
More reasons that an outsourced financial consulting firm is the way to go:
More economical:
Hiring and managing an in-house accounting and finance team is a significant cost. Outsourcing these business functions often comes at a reduced price—and, of course, with better productivity and flexibility.
Experts as your service providers:
In our case, we hire trained accountants and provide them with additional training to further enhance their expertise. Senior experts supervise them and excel in tasks such as navigating complex funding rounds, assisting with Financial Planning and Analysis, and supporting financial audits.
Efficiency:
The right experts offer solutions and tools. Many AI-integrated cloud software programs and tools can streamline accounting processes, and we partner with several, continually seeking the newest and best tools available.
Tax compliance and audit requirements:
The consultants will make sure your income tax returns are filed on time; they are the team that provides your tax firm with the required information. Additionally, there are numerous other tax and business filing requirements. Your consultant will also serve as the lead for the audit.
Pro tip: Have an “inside” partner who is in the loop for advice. Ensure your consulting firm specializes in startups, allowing it to provide insights developed from working with clients from seed to pre-IPO stages.
And this last one is big:
Funding efforts require time and accurate, up-to-date financial statements.
We’ve handled many due diligence requests for our clients. Those requests can and have arrived as late as 2 pm on a Friday and are needed before Monday morning. If you have already delegated your financial accounting responsibilities, your outsourced team should have:
- monthly financial statements ready for you on a GAAP or near GAAP level
- backup and reconciliations to support the financial package
- forward-looking statements, if you outsourced FP&A to them as well
- evidence that tax compliance is current
You are due diligence-ready and can sleep easily that weekend.
Having the right financial consultant can make all the difference for your startup. Everything we’ve discussed in this blog—from maintaining accurate accounting records to ensuring best practices in internal controls, audit, system implementations, FP&A, and fractional CFO support—is precisely what KBC specializes in. We understand the unique challenges startup founders face, and we’re here to provide tailored solutions at every stage of growth. Many of our team members have extensive experience in finance and accounting, particularly in working with start-ups. KBC has worked with hundreds of start-ups over the past decade and has deep expertise across various industries and complexities.
Let us help you free up your time, streamline your operations, and set your startup up for long-term success. If you have any questions or would like to learn more about how KBC can support your finance and accounting needs, please email our Operations team. We’d be happy to help!