Startup Accounting: 5 Essential Processes for Success

As a growing startup, your business will eventually need to implement several key processes to continue achieving your business goals. 

These processes will improve efficiency and help you complete the actions or operations needed to achieve your desired result. 

Here at New Economy, we focus our processes on data. This gives us the best results and positions us for success. 

We have identified five essential processes that are handled by our team of accountants, controllers, and CFOs. This article will dive into these processes and explain how they work. 

Startup Accounting

1. Bill Pay Process

Knowing how much cash (when and to whom it’s going) is leaving your business is important. This is where a bill paying process comes into play. 

Here are some key steps for this process: 

  • Establish a weekly rhythm to focus on this process. We like to use a schedule or calendar. 
  • Ensure all documentation has been received such as invoices, shipping documents, and purchase orders. 
  • Produce an accounts payable aging to show which amounts are due, to whom, and when. 
  • Establish an approval process for payment ensuring that the goods or services have been actually received or provided. 
  • Leverage technology to store digital documents and automate the approval process using technology like

The bill pay processes are typically performed by staff or a senior accountant. The information is then leveled up into cash flow forecasting.

2. Cash Flow Forecasting Process

Attaching itself to the tactical bill pay process is a more strategic process in order to gain future visibility. Understanding your cash flow gaps is crucial to managing your business and achieving your goals. 

Here are some key steps for this process: 

  • Layer on extra time to your weekly bill pay meeting rhythm to get more strategic.
  • Download New Economy’s simple free cash flow tool at
  • Load in all expected money due over the next 13 weeks and all money going out over the next 13 weeks. Then, verify the figure to your AR and AP aging.
  • Analyze and review for cash flow gaps.
  • Determine the next steps to cover the gap such as accelerating AR collections, leveraging a short-term loan, or extending terms on your accounts payable.

The cash flow forecasting process is a beauty. This process has helped many entrepreneurs sleep at night as it provides the visibility and data they need to make good decisions. This process is usually owned by a more experienced team member, like a controller.

3. Month-End Closing Process

All businesses need timely and accurate financial statements. Obtaining them each month allows you to determine how your business performed. This is beneficial as it will give you a snapshot of the financial condition of your business.

Here are some key steps for this process: 

  • Set up an agreed-upon timeline to have the books closed. This is typically by the 15th of the month for the preceding month.
  • Prepare a month-end closing checklist. This includes things like complete bank reconciliations, credit card reconciliations, and ensuring revenue is properly recognized.
  • Complete the month end closing checklist to ensure that the accounting policies are followed. To ensure the books are accurate, accounting policies must be executed.
  • Book all adjusting entries that are necessary for accurate books.

The goal of the month-end closing process is to ensure that your numbers are accurate. This is important as you’ll need to leverage your month-end financials to build and grow your business. This process is usually owned by a more experienced team member, like a controller.

4. Budget vs Actual Process

Attaching to the month-end close process is the budget versus actual process. This process allows you to understand, line item by line item, how the business is performing against plan.

Here are some key steps to this process: 

  • Load your budget into your accounting system.
  • Produce a system-generated budget versus actual report.
  • Review variances and determine if the variance is a timing issue or a real business issue that needs to be addressed.
  • Share the variances with department heads or others that can be held accountable to influence change.

The goal of this process is to determine where the business is over or underperforming. This is great data to have as points you in the right direction and gives you the opportunity to ask yourself if things need to change. This process is usually owned by a more experienced team member, like a controller.

5. Financial Model Process 

Building and maintaining a three-statement financial model by month, over the next 12-18 months, is crucial. It provides a picture of what the business looks like in the future and what resources are needed to bring that vision alive.

Here are some key steps to this process: 

  • Gain an understanding of the overall business model and drivers.
  • Review relevant contracts and agreements that are pertinent to the business.
  • Build out a three-statement model being a balance sheet, income statement, and cash flow.
  • Adjust the model each month based on what you have learned about the business. 
  • Iterate, iterate, iterate as this is a living and breathing document.

The goal of this process is to provide you with a flexible picture, based on your assumptions, of the future financial condition of the business. Further, it will provide you with a road map of where the business is headed. This process is usually owned by a more experienced team member, like a CFO.

Startup Accounting

Build Out These Processes for Success

With due diligence and the help of these processes, your business will be well-positioned for success. 

If building out these processes sounds overwhelming or too time-consuming, reach out to New Economy. We help entrepreneurs gain control of their finances and make smart decisions.

Head over to our website for related blog postings and don’t forget to schedule a time to meet with our founder, Jeff. He’d love to learn more about your business and walk you through how New Economy can help it grow!