Questions & Answers
Deep dives into the questions business owners have about bookkeeping, payroll, and financial management.
When Should a Startup Hire a Bookkeeper?
Before you need to show your books to anyone. If you're raising money, applying for a loan, or just want to know if you're actually profitable, it's time.
Read answerDo I Need a Bookkeeper for My Small Business?
If your books are behind, tax season is stressful, or you're guessing at profitability, yes. The real question is whether doing it yourself is costing you more than hiring help.
Read answerShould I Use QuickBooks Online for My Startup?
Yes, it works fine. QuickBooks Online handles what most startups need. The software isn't the hard part. Setup and consistency are.
Read answerWhat Financial Statements Does a Startup Need?
Three: profit and loss, balance sheet, and cash flow statement. Investors expect all three. Most founders only look at one.
Read answerHow Do I Calculate My Startup's Burn Rate?
Add up what you spend each month. That's your gross burn. Subtract any revenue and you get net burn. Divide your cash by net burn to find your runway.
Read answerDoes My Startup Need a Bookkeeper or a Fractional CFO?
Bookkeeper first. CFO later. A bookkeeper keeps your records accurate. A CFO helps you make decisions with those records. You need the first before the second is useful.
Read answerWhen Does a Startup Need a Fractional CFO?
When the financial questions get harder than your bookkeeper can answer. Usually that means fundraising, board reporting, or decisions where the math actually matters.
Read answerHow much should I expect to pay a bookkeeper?
Most small businesses pay between $200 and $600 monthly for basic bookkeeping. Higher complexity or more comprehensive service typically runs $500 to $1,500. The actual cost depends on transaction volume, industry, and what's included.
Read answerWhat is one of the most common bookkeeping mistakes that business owners make?
Mixing personal and business finances is the mistake we see most often. It makes reconciliation difficult, creates tax problems, and obscures true business profitability. The fix is simple but requires discipline.
Read answerWhat is a bookkeeper not allowed to do?
Bookkeepers cannot represent you before the IRS in audits, perform financial audits or attestation services, provide legal advice, or offer tax planning strategy. These services require CPAs, Enrolled Agents, or attorneys.
Read answerHow to value a startup pre-revenue?
Pre-revenue valuation is more negotiation than formula. Investors weigh team quality, market size, and traction signals like waitlists or LOIs. The final number depends on what both sides will accept.
Read answerHow much does an accountant cost for a startup?
Startups typically pay $300 to $3,000 per month for accounting services depending on complexity and stage. Pre-revenue companies need less, while funded startups require investor-ready reporting.
Read answerHow to prepare financial statements for investors?
Clean books come first. Investors expect accrual-based statements with at least 24 months of history, consistent categorization, and defensible revenue recognition. The underlying data quality matters more than the format.
Read answerWhat is a good burn rate for a startup?
A good burn rate gives you 18 to 24 months of runway to reach your next milestone. The actual dollar amount depends on your stage, growth rate, and what you need to prove before raising again.
Read answerWhen should a startup hire a CFO?
Most startups need CFO-level help before they can afford a full-time CFO. The signs are financial decisions getting too complex to wing it, investors asking questions you can't answer, and forecasting that keeps missing badly.
Read answerHow much should a fractional CFO charge?
Most fractional CFOs charge $150 to $400 per hour, or $2,000 to $8,000 per month on retainer. The actual cost depends on scope of work, company complexity, and the CFO's experience level.
Read answerWhat is a fractional CFO for startups?
A fractional CFO is a part-time Chief Financial Officer who provides strategic financial leadership without the cost of a full-time executive. For startups, they typically handle financial modeling, fundraising support, cash management, and investor reporting during critical growth phases.
Read answerIs Xero or QuickBooks better for small business?
Both work well for most small businesses. QuickBooks has broader accountant familiarity and more integrations in the US. Xero offers a cleaner interface and includes unlimited users. The setup matters more than which platform you pick.
Read answerWhat is the best accounting software for startups?
For most startups, QuickBooks Online is the best choice due to its massive ecosystem, accountant familiarity, and investor expectations. Xero is a solid alternative, especially for international transactions. The software matters less than using it consistently and setting it up correctly.
Read answerWhat are the biggest mistakes startups make?
Most startup failures trace back to financial blind spots. Founders mix personal and business money, ignore bookkeeping until investors ask, and don't know their real runway until it's too late.
Read answerWhy do 90% of startups fail?
Running out of money is the most common cause, but it's usually a symptom of deeper problems like no market need, spending too fast, or broken unit economics. Many failures happen in financial darkness where founders don't see trouble coming until it's too late to react.
Read answerWhat is the capital raising process for startups?
The capital raising process typically takes 3-6 months and involves financial preparation, building your pitch, investor outreach, due diligence, and closing. Most of the work happens before you ever meet with an investor.
Read answerWhat do VC investors look for?
VCs look for a strong team, large market opportunity, proven traction, and defensible business model. Clean financials and solid unit economics often separate companies that close funding from those that don't.
Read answerWhat is catch up bookkeeping?
Catch-up bookkeeping is the process of bringing your financial records current after they've fallen behind. It involves reconciling accounts, categorizing transactions, and producing accurate statements for whatever period was neglected.
Read answerHow to catch up on bookkeeping?
Start with bank reconciliations to establish a clean baseline, then work month by month from your oldest incomplete period forward. Gather all statements and documents before you begin so you're not hunting for records mid-process.
Read answerWhat is the difference between a CFO and a fractional CFO?
A fractional CFO provides the same strategic financial leadership as a full-time CFO but works part-time across multiple companies. You get senior-level expertise at a fraction of the cost of hiring a full-time executive.
Read answerWhat are the risks of hiring a fractional CFO?
The main risks are shallow engagement, availability issues, and misaligned expectations. A fractional CFO stretched too thin across clients won't provide the strategic insight you're paying for.
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