Accounting Services for Startups

    • We recognize the financial restraints that come with establishing a small business, which is why we provide a discounted cost on all of our services to new businesses.
    • Believe in making expert advice accessible to the general public at a reasonable cost without sacrificing quality.
    • Startups can benefit from quick, increased reporting and analysis capabilities for their business by linking their data sources into our interactive online portal without investing in the technology underlying it.
    • Whether your startup needs help with a single project or has ongoing needs, our services are scalable and adaptable. Our teams are accountants, controllers, CPAs, and IT specialists who have worked with startups and small to medium-sized enterprises for years.
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Startups Accounting Services Overviews:

Let us start by discussing the purpose of accounting itself. Accounting is one of those dark horses without the presence of which the system that you are planning to set up as a startup accounting services India might just collapse. The very basic need to set up a good startup is to have a stronghold of the ins and out of the financial structure. The earlier you do it as an entrepreneur, the healthier it is for the fundamentals of the company. 

Now starting with a new business already comes with a lot of naivety, and considering the complexities of finance and accounting, it isn't easy to handle everything by yourself. Firstly, you should know the basic purpose of accounting. Why do you need an accountant? To start with, we must segregate accounting and bookkeeping as two separate concepts. Bookkeeping is just the first part of accounting, and accounting is a very broad concept. 

Accounting involves recording, segregating, settling, calculating, and analyzing the assets and liabilities of a company. So, you not only need to record but also record for analysis and future introspection, which is important as far as a startup is concerned. 

So, there are a lot of accounting services for startups available, and what you need to do is segregate and choose what your startup needs and what services you can afford to have. 

What is startup company accounting, and why do we need it? 

  • The next thing that you need to know is why and when a startup needs an accountant and how startup accounting services in India are different from accounting for startups in any company. Startups, generally in their initial stages, start working with a very little amount of capital reserve, and the main focus of the company remains on brand building and increasing capital.
  • The capital increases mainly through investments from investors. So, most of the time, a startup will not need an accountant who needs to be busy all day with the accounts of the firm; rather, someone is needed who can guide the owners through the accounting process. 

What are the Functions of an accountant?

Accounting issues for startups require the technical know-how of specific areas. There are specific principles like the Generally Accepted Accounting Principles (GAAP) that the startup accountant has to abide by to keep a firm's accounts. There are various functions of an accountant, such as: 


  • Bookkeeping generally constitutes recording all the monetary transactions that are benefitted to the company, be it in cash or credit. In bookkeeping, one has not only to record the details of every transaction but also, he/she has to collect the pieces of evidence related to the transactions. The rightful pieces of evidence can be any form of receipts, documents, legal papers, bills, etc... The accountant has to ensure that there is recurring evidence to every transaction made by or for the company.


  • Organizing is what makes a startup an organization. From the beginning of the book, this function is led by the head accountant or the accountant in charge. The process involves keeping the firm's records, departmental documents, and other necessary documents in the necessary order and producing them as and when required in the firm's interest.


  • According to the income tax department of India, a firm has to pay taxes to the government when its yearly revenues are over 50 lakhs. The accountant has to keep a due record of the income tax that is paid and the various other service tax that the company receives. The accountant is also responsible for recording and producing all the taxation-related documents in the company. 

Due Diligence: 

  • Most startups are looking for the right investors to invest in their company and increase their capital reserve. For investors to invest in a startup, they conduct an in-depth inquiry to check the fundamentals of the company. 
  • This process is technical and, at the same time, hectic. An accountant can come in handy for he/she knows the ins and outs of the company's finance and can help answer all the technical questions asked by investors.

Tax Compliances: 

  • Another complementary to Due diligence is the tax compliances. As a firm looking to back a VC fund, you need to expose your tax authenticity to VC. A properly abled accountant can only explain and show all the details of taxes paid and due, following all the international, national, and local tax rules and regulations. 

Financial planning:  

  • Once you hire an accountant, he/she will be the most technically involved person with your accounts. He will process the knowledge of profits, credits, investments, and assets. Hence, it gives the accountant an upper hand in the planning of finance of the company. 
  • For a healthy financial future of one’s company, one must involve the accountant in charge to take part in the financial decision-making and make the owners and stakeholders aware of certain accounting ratios and performance indicators. 

As said many a time, an accountant of a firm holds a very strong and important position in a startup and any other large company. There are a lot of accounting issues for startups that can get over through the eyes of the owner or the partners if they are not aware of the accounting parts. 

This is the responsibility of the accountant to record and inform any accounting error like missing debt collection or double payments committed by the firm and take the required action. 

Startup company accounting

Once you know your accounting needs, let's look at how, to begin with accounting for a startup. There are no strict guidelines for specifically startup company accounting. You as a firm have to look into your needs and prerequisites and act accordingly. 

Let's look into the detailed steps of it. 

Budgeting and Bookkeeping 

  • It is a very firm step in the financial department of your firm. Every great initiative starts with planning, and in financial terms, we call it budgeting. The process of budgeting involves a great deal of accuracy.
  • The first part is deciding on your reserves as to what is going to be your official capital reserve and other reserves that are going to be invested at the beginning of the company. The capital reserve constitutes the equity of the owners, investors, and shareholders (if any). 
  • The partners and owners must thoroughly discuss the equity share before the commencement. The percentage of liquefaction of the equity must also be discussed beforehand. 
  • The second step involves deciding the expenses that are going to be made while the business commences at a particular time (mostly a financial year or quarter). Expenses are of two types: one is primary expenses, and the second is peripheral expenses. 
  • The primary expenses are directly involved in revenue generation of the firm (like stocks purchased); on the other hand, a peripheral expense is something that has no direct relation to revenue generation but helps in the smooth function of the firm (like new computer purchased for office). 
  • Once you are done with the measurement of the expenses and capital, you can easily calculate the exact future revenue that your firm is going to generate. Once the accountant calculates the tentative profit, you can decide how much of it you will reinvest in your company. 
  • Another much important process of startup accounting is the bookkeeping of transactions and records. The process involves checking all the documents of transactions like bills, receipts, and other legal documentation to start recording the transaction in a universally accepted and easy-to-understand manner. 

The GAAP (Generally Accepted Accounting Principles) are to be followed while recording the accounts.

  • There are two bases of accounting- accrual, and cash basis. An accrual basis is always advised for startups as it is more refined and scientific in the nation. On an accrual basis, we record the transaction when the actual transaction is made and not when the cash is given or taken. An accounting system supported by GAAP can also be useful in predicting the company's prospects. 

Financial Statements required for a startup 

  • After preparing all the books of accounts of your firm, you need to start making the firm's financial statement. Although the same statements are going to be made as we do for any big company, the only exception is that they are going to be much simpler. 
  • The financial statement holds a very important part of your firm's accounts. It is that single document that is referred to by investors, shareholders, income tax officers, and creditors as the only official representation of the financial status and fundamentals of the company. Thus, it is needed to be made with great care by the accountant. Three particular statements constitute the financial statement of the company. 

Income statement 

  • The income statement is broadly known as the income and expenditure statement and carries all the records of the company's incomes and expenditures. It is to be kept in mind that all the incomes and expenditures are to be recorded in cash or credit on the accrual basis of accounting. In a startup, the income statement will be primarily of expenditures of the business and the sales incurred. 
  • By the end of the year, the statement might close in two ways- if the income is more than the expenditure, then it is a profit, and if the expenditures are more than the income, then obviously, we have a loss. There are further concepts of gross profit and loss and net profit and loss which the accountant in charge will render in his will. 

Balance sheet 

  • The balance sheet is the most important statement as far as a company's fundamentals are concerned. The balance sheet has two columns, the assets and the liabilities, which are to be tallied at the end of a financial period (a year per se). 
  • The assets considered all the belongings of the firm as in cash reserves, net profit, tangible assets, and investments. At the same time, liability constitutes everything that looks like a financial burden to the firm, as the creditors or loan is taken. By the end of the statement, these two amounts have to match. 

Cash flow statement 

  • Ass its name suggests, the cash flow statement carries the company's record for cash transactions. It is also used as a tool to find out the firm's cash reserves. Unlike the other statements, the cash flow statements have only one column where the cash gains are added, and the cash taken out is subtracted. Hence, the amount realized in the end has to match the real cash reserve of the firm. If they do, you are good to go with adding the cash reserve to the balance sheet of your firm. 
  • There are a lot of reasons why you might want to skip on hiring a good accounting system in the initial days of your startup. One might think that it is just about record keeping, and they can easily perform it by themselves. 
  • But by the end of the article, you might have understood how accurate one has to be in such record-keeping, or else errors will not get addressed, resulting in unknown expenditures of the company. Here are some of the reasons in more detail: 
  • Every transaction you make is kept in the record; hence there is no chance of creating confusion or unknown transactions. 
  • Having a professionally made financial statement that ensures that your good image is maintained in front of future investors and creditors 
  • Sometimes you might forget to collect or realize income. But it is not a possible circumstance to forget about any transaction with the books of accounts.
  • A good accounting system ensures the proper evaluation of your capital reserve and net worth, and thus the accuracy is maintained. This is important for future predictions and planning. 

Who is in charge of accounting and bookkeeping?

  • Every corporation/entity doing business in India is required to follow statutory regulatory obligations, which include keeping accurate books of accounts.
  • According to section 128 of the Companies Act, 2013, every company, including private limited companies, public limited companies, and sole proprietorships, is required to keep its books of account in good order.
  • Every professional engaged in the practice of law, medicine, engineering, architecture, or the practice of accountancy, technical consultancy, interior decoration, or any other profession, must keep and maintain such books of account to compute his total income for the purpose of filing an income tax return.

Why Especia

  • Before beginning any endeavour, it is preferable to have a clear understanding. We provide you with a clear picture of your idea and the challenges that may arise as a result of it, information about your target clients and your objectives, and customized response to your questions. Following the talk, we will provide you with the technology enabling accelerators to create a powerful product.
  • We help startups by selecting and leveraging cutting-edge technology, whether it's online, mobile, or cloud, for new or existing products and development. After a thorough examination of the technological stack's benefits and drawbacks, our experts choose the optimal framework for your growth.

Become a Chartered Accountant by completing the following steps. To open an accounting firm in India, you must first become a Chartered Accountant.

  1. Payroll and sales taxes are two types of taxes.
  2. Accounting help is available.
  3. Bookkeeping.
  4. Review of the general ledger.
  5. Financial evaluation reports
  6. Consultation for new businesses.
  7. Budgeting and forecasting are two important aspects of every business.

$500 to $2,500 a month. The average price of outsourcing your bookkeeping needs ranges from $500 to $2,500 a month, depending on the number of transactions and complexity of services required. A key benefit of Outsourcing is it gives you the ability to customize the services you receive to your bookkeeping needs.

A full-service CPA firm can manage your company's financial and accounting obligations, allowing you to focus on your clients' needs, provide them with the products and services they want, and increase income.

Small businesses are not required by law to have their books done by a competent accountant; the only requirement is that you file your tax returns and keep track of all your incoming and outgoing funds. Keeping these documents is usually simple enough these days, with almost everything going digital.

Bookkeeping is a transactional and administrative role that handles the day-to-day tasks of recording financial transactions, including purchases, receipts, sales and payments. Accounting is more subjective, providing business owners with financial insights based on information gleaned from their bookkeeping data.

While some accounting firms specialize in niche services such as tax strategy, most will offer bookkeeping and payroll services, tax preparation, and business valuation services.

When you need assistance with financial data collection, analysis, and reporting, you should engage an accountant for your small business. Accountants can understand your financial data and assist you in making better financial decisions for your organization.

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