Outsourced Accounting Solutions for Tech Startups

At a glance

• The main takeaway: By leveraging the experience of an outsourced accounting team, founders can focus on growing their business and raising capital.
• Impact on your business: Outsourced accounting services enable startups to grow rapidly, maintain investor-ready financials, and access a full finance team at a fraction of the cost of an in-house team.
• Next steps: Aprio’s tech professionals have worked with hundreds of tech companies and startups to help them grow. Schedule a consultation today.  

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The full story:

In the startup stages, founders are focused on innovation, product development, and scaling their businesses, leaving little time for the meticulous task of managing finances. Outsourcing accounting services enables tech startups to scale rapidly minus the burden of hiring and training an in-house team and ensures that financials are investor-ready, an important factor when looking to raise capital.

What are the benefits of outsourced accounting for your tech startup?

1. Ability to scale

Tech companies scale rapidly and outsourcing accounting enables them to adapt their operations to match their rapid growth, without the resource-intensive processes involved in recruiting and training new employees. Outsourcing your accounting department is typically 50% cheaper than maintaining an in-house team. Apart from the significant time savings, startups can allocate their financial resources more strategically towards product development and market expansion.

2. Investor-ready financials

A key reason for tech companies to outsource accounting is to ensure investor-ready financials. Many first-time founders think about doing the accounting themselves, but they are not accountants. When tech startups look to raise funding rounds and each time that they do, investors expect to see financials that are in good shape. Outsourcing helps avoid any last-minute rush to clean up accounts, which realistically should take months of preparation. Time is a big factor. The earlier your outsourced team sets up the company financials correctly, the better your financials are accounted for, helping ensure you are investor-ready at any given time.

3. Full finance team from day one

Outsourcing provides startups access to a full finance team from day one, covering everything from transaction processing to CFO-level responsibilities. As tech companies grow, whether through raising new levels of funding or generating revenue, outsourced services can easily scale alongside their business needs. Having a dedicated outsourced accounting team also ensures that all financial operations are handled by professionals who are up-to-date with regulations and industry best practices, which is critical in maintaining compliance and avoiding costly penalties.  

How do I know outsourced accounting is a good fit for my tech company?

Most of the time, outsourcing is beneficial, particularly if the company is looking to raise funding rounds or disclose financials to potential investors, or if it plans to grow rapidly. However, if a company is bootstrapped, has not raised funding yet, or expects a more gradual growth trajectory, it may be better to manage cash flow internally. At such stages, managing accounting in-house allows for better control over your limited resources.

Outsourced accounting isn’t a good fit at our current growth stage. What other options do we have?

Even if outsourced accounting is not currently the right fit, there are other outsourced services available that can still provide value to tech startups. For instance, managing and filing tax returns is an ongoing requirement for all businesses, regardless of their growth stage. By leveraging outsourced services for tax returns, companies can ensure compliance with the latest regulations and avoid errors or penalties. Additionally, tech startups can benefit from research and development (R&D) tax credits. These credits can substantially reduce tax liabilities, freeing up additional resources that can be reinvested into the business. Outsourced providers can help navigate the complex paperwork and qualification process for these credits, ensuring that startups maximize potential tax benefits at every stage of their growth.

The bottom line

Aprio has a specialized team dedicated to working with tech companies, guiding them from startup to exit, including IPOs. We advise founders and clients on best practices, investor expectations, key performance indicators (KPIs) to track, and tech stack and software recommendations.

Aprio provides strategic insights and guidance to clients, helping them prepare pitch decks, navigate funding rounds, and manage financials, so founders can focus on attracting new investors, acquiring customers, and driving business growth. We offer a comprehensive suite of accounting and advisory services for tech companies, including accounting software selection and implementation, cash basis accounting, financial reporting, budgets and forecasts, funding round support, KPI monitoring, and CAP table management for tech companies. Our CFO services are well-suited for tech entrepreneurs and founders in series funding rounds. We help manage budgets and cash flow forecasts, which are crucial for tech companies to monitor their runway and burn rate. Schedule a consultation today.

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