Cinder Technologies relies on Kruze for expert startup accounting and tax services
Industries: Software industry
Services Provided by Kruze: R&D tax credits, Payroll tax management, Sales tax management, Monthly books close, General accounting and bookkeeping support
BACKGROUND
Cinder Technologies is a unified operations workflow platform for online communities. This platform helps technology companies track, investigate, and resolve the most critical problems related to maintaining user safety, protecting user trust, and enforcing online community policies. By integrating relevant data sources, centralizing decision-making, and offering customizable workflows, the company enables more effective decisions for investigative teams across an organization.
“Cinder is a central operations platform for Trust and Safety departments. It combines data labeling, content moderation, and AI,” said co-founder and chief operating officer Phil Brennan.
"Companies don’t build their own ATS or EDR, they buy the best solution. Today Cinder makes that possible for online safety, as well."
In its first two years, Cinder raised over $14 million in seed and series A funding, and customers range from AI leaders like OpenAI, Stability AI, Midjourney, and CharacterAI to marketplaces like Depop and social platforms like Patreon and BeReal.
CHALLENGES
As a SaaS startup, Cinder has unique accounting challenges, including:
- Payroll taxes for a distributed workforce
- Sales taxes that cross different states and municipalities
- R&D tax credits generated by significant research and development costs
And that’s not even including day-to-day bookkeeping and accounting. Cinder was using QuickBooks for accounting, along with Brex for expense management and Gusto for payroll. “I was manually reconciling a lot of that,” Brennan said.
“I don’t have a finance background,” Brennan said. “Our lead venture capital investor, Accel, suggested that we get some accounting help, and they recommended Kruze Consulting, along with some other firms. Kruze just really stood out. I found the content on their website answered a lot of questions that I had. And a big part of the decision was meeting the Kruze team. They’ve done this before, and they have a lot of experience.”
Results
“Turning over the monthly book close to Kruze was incredibly valuable in terms of time savings and accuracy,” Brennan said. Another aspect of Kruze’s service that Brennan appreciates is customer service. “If I need to accelerate my monthly close date to accommodate a board meeting, my account manager works with me. I can also email my account manager with questions, and if necessary, she will refer me to specialists on the tax team or the R&D tax credit team. I really appreciate that level of service.”
Specialized accounting services that Kruze has performed for Cinder include:
- R&D tax credits. Startups can leverage the R&D tax credit to significantly reduce their tax liabilities and reinvest those savings into their growth. By properly documenting development costs, startups can use the R&D tax credit to offset payroll taxes, which improves cash flow. “Working with Kruze to claim the R&D tax credit has been extremely valuable,” Brennan said. “In 2022 we were able to claim almost $60,000 in tax credits, and in 2023 we claimed over $100,000.”
- Payroll taxes. Startups with remote employees need to carefully manage payroll taxes, which include employee withholdings like Social Security, Medicare, and federal income tax, as well as employer contributions for Social Security, Medicare, and unemployment insurance. “Partnering with Kruze means we get everything filed correctly and on time,” Brennan said. “I don’t think many founders have the time to figure out the differences between New York and California payroll taxes.”
- Sales taxes. Navigating state and local sales taxes is challenging for SaaS startups, since they have to track, calculate, collect, and remit the correct taxes to every jurisdiction where they have customers. Brennan noted that Kruze’s tax professionals make sure these obligations across multiple states are handled accurately, allowing the Cinder team to focus on scaling their business.
"There’s a real value to knowing I have Kruze in my corner. I have a lot of confidence in our books. If we were fundraising and someone wanted to audit our books tomorrow, I’d say great, go for it."
Kruze Cares More
Kruze Consulting specializes in startup accounting, relying on experienced accounting, tax, and finance professionals, using best-in-breed financial tools and systems. Kruze empowers founders to focus on their core businesses while having confidence in accurate books, financial statements, and compliance readiness for fundraising or exits. For more information about Kruze Consulting, call (415) 322-1610 or contact us.
