CEO and Founder of Kruze Consulting
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I’m a CPA/interim CFO and my team assists over 800+ startups in SF, Austin, Chicago, & NYC. A reasonable monthly cost for Accounting & HR depends on:
The volume of your transactions: do you have 300 transactions hitting your bank account and credit cards every month, or 10,000 transactions? More transactions = more time = more money.
The complexity of your transactions: even if you have relatively few transactions, they may be complex. For example, you may have prepaid Facebook $100,000 for advertising for the next year. You or your bookkeeper will then need to reconcile that account every month against what advertising amount you’ve actually used.
Doing the work yourself: if you can train yourself to do some of the bookkeeping, you can definitely save money. Two caveats though, 1) your time is truly better spent growing and managing your startup and 2) if you get it wrong it will very likely be expensive to clean up the books.
How you’ve leveraged technology: I can’t stress this enough… using technology will greatly reduce the amount of time (aka money) you have to spend on Accounting and HR. Here are my absolute essentials: QuickBooks, Gusto or Rippling, Ramp or Brex just to name a few.
You’ve also got to think about your taxes, which should run low thousands of dollars to be done well, annually (visit our tax return cost calculator to get a better estimate on the cost). Even unprofitable startups need to file tax returns, and they often are looked at during due diligence. We strongly recommend going with a unified accounting and tax provider, since this can not only decrease the cost of getting your accounting done (bundle!) it can also save you time because you’ll have less to coordinate.
In sum, what you spend on Accounting & HR for your startup depends on your unique situation. But just to give you an idea… If you are a Seed Stage DE CCorp startup based in SF, NYC, or Chicago, have 10 FTEs, ~400 transactions a month and no accruals… I’d say ~$800 per month.
As a profitable company, Kruze’s team provides strategic financial advice, produces monthly books and produces tax returns for high-growth startups.
We’ve put together this calculator to help you estimate the cost of preparing your startup’s tax return.
Kruze only works with funded startups - we know what it takes to raise that next round, and we’ll help you get there.
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