Team Digits

Published February 06, 2025

6 Best Bookkeeping Services for Startups: Choosing the Right Solution

As a small business owner, you're focused on building your products, securing your next round of funding, and growing your business. But to do that successfully, you must have clear financial visibility, remain tax compliant, manage cash flow well, and build credibility with potential investors. That’s where bookkeeping comes in to keep your startup operating and primed for growth.

According to a U.S. Bank study, cash flow problems contributed to 82% of startup failures. The most common culprit is startup founders not having real-time visibility into their cash flows and burn rates. Whether you're pre-seed or going for Series A, your financial data tells the story investors want to hear — and basic spreadsheets just won't cut it anymore.

Bookkeeping solutions do much more than track debits and credits. Depending on the solution, they can automate day-to-day bookkeeping tasks, provide real-time insights, and scale with your business. But with so many options available, choosing the right service can feel like navigating a maze.

In this guide, we'll walk you through everything you need to know about startup bookkeeping services in 2025. By the end, you should have a clear picture of which solution best fits your startup's unique needs.

Why bookkeeping is critical for startups

Clean books aren't just about impressing investors (though that matters). Keeping your financial records accurate, organized, and up-to-date helps you make data-driven decisions that’ll set your startup on a winning path.  When you know exactly where every dollar comes from and goes to, you can optimize your burn rate — in other words, see exactly how quickly you're spending money and where cuts could be made.

With detailed financial data, you can also see which products or services are actually making you money and earmark those as your profit centers. You might also be able to spot potential cash flow issues before they become crises.

Bookkeeping services do the heavy lifting in all of this by automatically tracking and categorizing transactions, reconciling accounts daily, and generating real-time financial reports. This means you'll always know how long your startup’s runway is and the true profit or loss on each sale or service (called unit economics). For instance, if you run a project management software and just signed two big enterprise clients, those contracts might extend your runway significantly.

Growth metrics such as the cost to acquire a customer (CAC) and the lifetime value of a customer (LTV) will also help you know if your business is healthy and growing. You might notice that customers who use your product's collaboration features in the first week are much more likely to stick around long-term. Or you may see that customers who come through partner referrals have a much lower acquisition cost and higher lifetime value than those from paid ads. These insights help you decide where to focus your efforts.

When tax season rolls around, you won't be scrambling to piece together a year's worth of transactions because they’re already recorded properly:

• You have accurate profit and loss statements ready.
• All deductible expenses are properly categorized.
• Payroll taxes are correctly calculated and paid.
• Bank statements, receipts, and other business activity docs are organized and accessible.

What to look for in bookkeeping services for startups

Your startup has a unique growth trajectory, and your accounting and bookkeeping needs must match where you are and where you want to go. Early-stage companies often deal with equity management, complex cap tables, research and development tax credits, and rapid scaling. On the other hand, a later-stage company could be focused on unit economics, international expansion compliance, and revenue recognition across multiple product lines.

Regardless of where you are in your startup journey, look for these elements when evaluating bookkeeping services:

• Startup experience: Look for providers who understand venture funding, SaaS metrics, and the startup growth journey. When you mention terms like product-market fit, burn rate, self-serve, or blended CAC, they should be able to grasp what you’re describing rather than looking confused.
• Scalability: Your bookkeeping solution needs to grow with you. It should handle everything from basic expense tracking to complex revenue recognition and multi-entity consolidation.
• Tech stack integration: Integrating with your existing platforms, such as Stripe, Plaid, Carta, and your payroll provider, will make bookkeeping much more seamless and help the data talk to each other.
• Real-time data: Monthly reports aren't enough anymore — your cash position needs to be tracked in real time, not discovered weeks after month-end, because by then, you will have missed important deadlines for fundraising or hiring. Look for platforms offering real-time financial dashboards, automated daily reconciliation, and instant access to key metrics.
• Forward-looking insights: The best services don't just tell you what happened — they help you predict what's coming. Features like cash flow forecasting, scenario planning, and trend analysis will help inform your financial planning.

Before signing with any provider, ask these important questions:

• What's your experience with companies at our stage and in our industry?
• How do you handle fundraising support and investor communications?
• What level of human support comes with the service?
• How do you approach tech stack integration and automation?
• What's your pricing model as we scale?

The 6 best bookkeeping services for startups

1. Digits

Cost: Starting at $150/month

Who it's best for: Tech startups and SaaS companies looking for real-time financial insights and AI-powered automation.

Digits combines AI-powered automation with CPA oversight, making it ideal for startups wanting to maintain control of their finances while leveraging advanced technology. The platform offers comprehensive bookkeeping, bill pay, and reporting tools, all integrated into a single accounting dashboard.

Digits’ AI learning models have processed over $700B in transactions, so it's well versed in categorizing common transaction types across industries. The software also has automated transaction coding and automated payable schedules to reduce manual bookkeeping tasks.

Pros:

• AI-powered transaction categorization and reconciliation
• Real-time financial reporting and analytics dashboard
• Advanced burn-rate tracking and cash-flow forecasting
• 5-day month-end close with accrual accounting
• Built-in bill pay and vendor management
• U.S.-based CPA verification
• Interactive financial dashboards

Cons:

• Less ideal for companies who prefer to outsource all bookkeeping needs

2. QuickBooks

Cost: $35-235/month + bookkeeper fees

Who it's best for: Early-stage startups looking for a widely-used, basic bookkeeping solution.

QuickBooks offers the industry's most widely used small business accounting software platform. They provide basic bookkeeping functionality with extensive third-party integrations, making it suitable for early-stage startups needing fundamental financial tracking and the flexibility to add features as they grow.

Pros:

• Universally accepted by accountants and financial institutions
• Extensive integrations across software categories
• Scalable pricing tiers
• Strong basic accounting features

Cons:

• Limited startup-specific features
• Can be complex to set up properly
• Basic reporting capabilities

3. Pilot

Cost: Starting at $599/month

Who it's best for: Venture-backed startups needing comprehensive financial support.

Pilot provides full-service bookkeeping with dedicated account management and startup expertise. It combines software tools with human expertise, with most customers looking for comprehensive financial support, including R&D credits and fundraising assistance. Note that Pilot only works with QuickBooks Online Plus, and you'll need to migrate if you use a different software.

Pros:

• Dedicated account manager
• Strong expertise in venture-backed companies
• R&D tax credit support
• CFO advisory services available

Cons:

• Premium pricing
• May be overkill for bootstrap startups
• Less automated than tech-first solutions
• Requires QuickBooks Online Plus

4. Zeni

Cost: Starting at $349/month

Who it's best for: Fast-growing startups needing support for all of their financial services.

Zeni offers an all-in-one financial services platform that includes AI bookkeeping, banking, and dedicated finance team support. Their solution targets funded startups looking for a comprehensive financial stack with real-time reporting and daily book reconciliation. Note that Zeni only works with Quickbooks Online Plus, and you'll need to migrate if you use a different software.

Pros:

• Strong AI automations
• Real-time dashboard with robust reporting
• Built-in CFO services
• Access to financial experts

Cons:

• Requires QuickBooks Online Plus
• Higher price point
• Limited customization options
• Bundled services may be redundant

5. Kruze Consulting

Cost: Starting at $600/month

Who it's best for: Funded startups past pre-seed funding that need full-service tax and financial advisory services.

Kruze Consulting positions itself as a traditional bookkeeping service that uses AI to supplement. It isn't a software solution — it’s human-powered. Kruze specializes in companies beyond the pre-seed stage, typically with more than $250,000 in revenue, and it provides comprehensive financial services, including tax preparation and CFO support.

Pros:

• Extensive startup experience
• Comprehensive bookkeeping services
• Partners with AI services for integrations

Cons:

• Less tech-forward than competitors
• Can be expensive as you scale
• Limited self-service options

6. Fondo

Cost: Starting at $199/month

Who it's best for: Early-stage startups needing basic bookkeeping and tax filing support.

Fondo delivers basic bookkeeping and tax support services for early-stage startups. It focuses on fundamental financial management and compliance, making it an accessible entry point for companies just starting to formalize their bookkeeping processes. Note that Fondo only works with Quickbooks Online or Puzzle, and you'll need to migrate if you use a different software.

Pros:

• Affordable entry point
• Good for basic compliance
• Easy to get started and quick onboarding process

Cons:

• Requires purchasing additional tools
• Relies on software like Quickbooks Online or Puzzle
• Limited advanced features

In-house vs. outsourced vs. hybrid bookkeeping: Which is best for your startup?

Deciding between in-house bookkeeping or outsourcing comes down to control, scalability, and your team's bandwidth. Let's break down each option’s impact on your startup.

In-house bookkeeping

With in-house bookkeeping, you either have an employee handling bookkeeping or you handle it yourself. Modern AI-powered tools have made this increasingly straightforward for startups by automatically categorizing transactions, tracking KPIs, and telling you about issues when they happen.

Benefits:

• Complete control over financial processes
• Real-time access to financial data
• Better integration with your existing workflows
• Typically lower cost
• Deeper understanding of your finances

Challenges:

• Requires dedicated time and attention
• Need to stay current with startup accounting practices
• Initial setup and learning curve
• May outgrow internal capacity as you scale

Outsourced bookkeeping

Outsourcing to a service like Pilot or Kruze means delegating your bookkeeping to external experts. This approach has traditionally been popular with funded startups.

Benefits:

• Expert handling of complex accounting
• Reduced internal overhead
• Access to specialized knowledge
• Scalable as you grow
• Built-in compliance oversight

Challenges:

• Higher monthly bookkeeping costs
• Less direct control
• Potential communication delays
• May not understand your business context

Why a hybrid approach might be the right choice

Many platforms, like Digits, now offer a hybrid approach that leverages AI. You can handle bookkeeping in-house with the option to get help and verification from a CPA. You maintain control while automating the tedious parts and getting expert oversight. And one of the best parts is that you can scale up bookkeeping services as you need them.

A hybrid approach often costs significantly less than traditional bookkeeping services since you're only paying for the AI platform and occasional CPA oversight rather than full-time bookkeeper salaries. You can start with basic automation when you’re small, and you can add more services like tax planning and compliance checks as your business grows and becomes more complex.

A step-by-step guide to setting up bookkeeping for startups

Whether you're just launching or looking to upgrade your existing systems, here’s how to set up a solid bookkeeping foundation.

1. Choose your bookkeeping method: Cash basis vs. accrual accounting

First, you'll need to choose between cash or accrual accounting.

Cash-basis accounting records transactions only when money changes hands. Often, it's a simple choice for early-stage startups. However, as you grow or seek funding, you'll likely need to switch to accrual accounting, which records transactions when they're earned or incurred. This gives investors and stakeholders a more accurate picture of your financial health.

2. Select the right bookkeeping software: Evaluating options like Digits

Your software should align with your startup's growth stage and complexity. Early-stage startups need tools that automate tasks and provide clear, basic reporting. As you enter the growth phase, look for platforms that can generate GAAP-compliant financial statements, metrics like MRR and ARR growth, and clear cash runway numbers. This will make it easier to report back to investors.

Pre-Series A companies should prioritize systems capable of handling complex transactions and supporting multiple entities because adding these capabilities after you start dealing with international stakeholders or sophisticated revenue models is much more painful than setting it up from the start.

The right software grows with you, preventing costly migrations down the road. Digits can scale with your business and provide easy-to-digest and investor-ready reports at your fingertips.

3. Automate your processes: Setting up integrations for real-time reporting

Integrating your bookkeeping software with payment processors like Stripe and PayPal, bank and credit card accounts, business expense management tools, and payroll systems creates a seamless flow of financial data.

This automation reduces manual entry, minimizes errors, and gives you real-time visibility into your finances. Connect your CRM and billing platforms to track revenue automatically and maintain accurate customer records.

Choose platforms that are actively trying to make integrations between financial apps more possible. For instance, Digits is currently working on an open API that would make it easier than ever for your financial data to be securely shared among your tech stack.

4. Categorize transactions: Maintaining accurate financial records

A well-structured chart of accounts is the driving force behind your financial reporting. Create categories that reflect your business model and track the metrics investors care about. For a SaaS startup, this means separating software development costs from general operating expenses, breaking out customer acquisition costs by channel, and tracking revenue by customer segment (enterprise vs. self-serve).

Your structure should support clear investor reporting while ensuring tax compliance. Think beyond basic expense categories: Consider how you'll keep track of key metrics like customer acquisition costs, recurring revenue, and departmental spending.

5. Schedule regular reviews: Keeping your books error-free and tax-ready

Start each day by checking your cash positions because it’s a quick indicator of your company’s health and can help you get ahead of problems before they become emergencies. Weekly reviews of transaction categorization catch errors early and make sure data is accurate.

Every month, you should close the books and reconcile accounts, as you’ll be making expense decisions based on this data.

Every quarter, review financial statements and adjust forecasts to stay aligned with your growth targets and help identify trends or issues before they become problems.

Find the right bookkeeping solution for your startup

Poor bookkeeping leads to missed opportunities, tax issues, and fundraising roadblocks. With the right solution, you'll have financial clarity and be able to make data-driven business decisions rather than relying on gut feelings. For example, when your enterprise sales CAC drops after launching a new referral program, you can immediately double down on that channel instead of waiting weeks to spot the trend. This can be the difference between saying sales feel strong this quarter and pointing to enterprise deals closing 30% faster this quarter.

Consider your startup's growth stage, budget, and internal capabilities when choosing a solution. If you're pre-seed with a basic financial situation, a software-first approach with AI assistance like Digits might be ideal. As you scale and your finances become more complex, you may want to add professional services or transition to a full-service provider.

Remember that switching providers becomes more challenging as your company grows, so from the start, choose a solution that can scale with you.

Ready to take control of your startup's finances?

Chat with Digits about getting your books in order and see how modern AI bookkeeping can transform your financial operations.