3686 tickets are on sale now

How early-stage accounting can be your startup’s secret weapon

Launch Tennessee spoke with Calvetti Ferguson, a middle-market accounting and advisory firm, to discuss how early-stage accounting is often an overlooked aspect of starting a business, but a strong foundation can be a startup’s secret weapon.

  1. Lay the groundwork for future clarity.

The initial setup of your accounting systems and processes significantly impacts the quality of your financial data going forward. For instance, if you anticipate having multiple product lines or locations, establish your system to accommodate that structure from the beginning. This ensures that data is captured from the outset to fuel future management reports, KPI monitoring, and other financial presentations. Retrofitting your system later can be cumbersome and time-consuming, hindering valuable financial insights.

One of the top tips from Calvetti Ferguson is to prioritize getting your accounting done well from the beginning. Seek advice that aligns with your business plan and personal goals. Building a solid accounting and tax framework sets you up for future growth and scalability while providing valuable information to run the business as you grow.

Neglecting accounting can distract you from strategic moves like fundraising or an exit. Imagine the impact on investor confidence if your numbers are unreliable or delayed by cleaning up messy books, audits, or unexpected tax liabilities.

“The most expensive situations involve going back and fixing the books,” said Cary Luhn, Accounting Services Partner in Charge at Calvetti Ferguson. “It’s far more economical to do it correctly up front.”

  1. Founders must decide where they want to spend their energy.

Founders have to prioritize where their energy will be most beneficial to the company: talent, time, and money. Unless you have a CPA background, tracking numbers likely isn’t your best use of time, and for most early-stage companies, focusing your capital on product development is best.

An advisor who understands your business can guide you through present needs, anticipate future challenges, and help you avoid the common accounting challenges early-stage companies can struggle with like:

  • Late-night or weekend bookkeeping.
  • Hiring the cheapest bookkeeping service.
  • Allocating a limited budget to an internal controller.
  • Company growth and complexity outpacing the capabilities of the in-house accounting team.

“Just because you are a small company doesn’t mean you can’t have the same expertise as a larger organization,” Cary said.

Working with a firm like Calvetti Ferguson can be more cost-effective and provide your company with more value and depth of knowledge than hiring a full-time accountant. They can offer a wider range of expertise for a fraction of the cost of hiring a full-time employee.

Cary added that the decreasing number of accounting graduates makes in-house hiring more difficult, potentially leading to burnout and mistakes. The constant improvement of accounting software empowers business owners with choices, including general-purpose solutions and those tailored to specific industries and requirements. Calvetti Ferguson simplifies this process by recommending the most suitable tools for your needs and working with you to set up your system to meet your needs now and down the road.

  1. Use the financials to help tell your story

Entrepreneurs need to be able to connect their goals and strategies to their accounting data. The numbers have meaning; they aren’t just numbers for numbers’ sake. Accounting and finance should add value and help you achieve your vision.

Numbers are powerful tools for storytelling, especially for investors and lenders. They can give you the confidence to move forward boldly or the caution to adapt your strategy. That’s where a team of advisors is crucial. In today’s complex world, it’s rare for a single executive to manage all aspects of finance, accounting, tax, IT risk, and transaction advisory.

A good accounting firm can keep you financially sound as you grow. They can help you review contracts before signing to ensure proper revenue recognition. They can also identify tax credits and minimize your tax burden.

“We help companies see how their actions translate into financial results, highlighting opportunities and risks,” said Nicholas McClay, Nashville Office Managing Partner. “This helps them communicate their story to investors, boards, and other stakeholders.”

Calvetti Ferguson, a boutique accounting and consulting firm with a 20-year history of founder-ownership, understands the entrepreneurial spirit. They take a client-centric approach, prioritizing their clients’ success throughout all stages of business growth, from securing funding to achieving a successful exit.

You are now being taken to Startup Tennessee to view current events.

Launch Tennessee provides an ecosystem map with links and resources to other organizations, but this does not constitute an endorsement of content, viewpoints, policies, products or services of that site. Once you link to another web site not maintained by LaunchTN, you are subject to the terms and conditions of that website, including but not limited to its privacy policy.