Founders tend to treat bookkeeping as a compliance chore — something to catch up on before the auditor calls. That framing is expensive. Your books are the raw material for every runway decision, every board update, and every diligence you’ll ever face. Getting the foundation right early is far cheaper than untangling two years of shortcuts.
Accrual, not cash — from day one
Cash accounting hides the truth: it tells you when money moved, not when you earned or owed it. Investors read accrual statements. Switching later means restating history, so start on accrual even when the volume is tiny. Your MRR, deferred revenue, and true burn only make sense on an accrual basis.
The four things that must be true every month
- Every bank and card transaction is reconciled — no unexplained lines.
- Revenue is recognised in the period it was earned, not when invoiced or collected.
- GST input and output are captured cleanly, ready to file without a scramble.
- The month is closed — locked, reviewed, and reported — within a fixed number of days.
A term sheet rarely dies on the numbers. It dies on the mess behind the numbers.
A chart of accounts you won’t outgrow
Design the chart of accounts for the metrics you’ll report, not the transactions you happen to have today. Separate COGS from operating expenses, tag spend to functions (R&D, S&M, G&A), and keep it stable so month-over-month comparisons actually mean something. If you want a template that maps to investor reporting, the Jordensky accounting team sets this up as standard.
