How To Use This Calculator

As a startup founder, you know as well as anyone else that budgeting is key to having a successful business. With all the moving pieces it can be hard to figure out how much of your resources should go towards accounting and HR needs – but not to worry!

Today we’re introducing a new tool designed specifically for startups: our Startup Accounting and HR Cost Calculator. This easy-to-use calculator provides an accurate estimate of costs in both areas so you can make informed decisions when creating your budget for the year ahead. Let’s take a look at what this cost calculator has to offer!

Startup Accounting Cost

Starting a business is an exciting undertaking that comes with plenty of financial considerations. When it comes to preserving your capital, keeping track of your startup accounting and bookkeeping costs must be at the top of the agenda.

The key factors determining fees will usually depend on the complexity of your business activities, number of transactions, size of the organization, and any additional services you may wish to include. Most importantly however, since startups need to report regularly on a monthly basis (investor report) and keep extremely detailed bookkeeping records in order to ensure accuracy, you should expect to pay more for a monthly close than if you opt for quarterly reviews. 

Monthly close will include the following:

* Revenue recognition on a monthly basis

* Accrued Expenses: streamline monthly expenses such as office rent, yearly insurance payments, monthly accruals for professionals (legal, accounting and other consultants), etc.

* Generate monthly P&L, Cash Flow and Balance Sheet reports

So even if hiring an outsourcing accounting firm may seem costly upfront, it could prove to be worthwhile in the long run.

To understand the estimated cost of your startup accounting and bookkeeping work, choose your average monthly burn rate in the slider above, it will calculate the monthly retainer you should expect to pay for a professional accounting firm that specializes in working with venture-backed startups.

Above $300K in monthly burn rate you should consider hiring a FT bookkeeper.

Startup HR Cost

When you’re launching a startup, one of the biggest expenses that you have to manage is HR cost. Factors like how big your business is, how many employees you need to hire, the industry you’re in, and what kinds of benefits you want to provide will all play a role in determining your startup’s HR costs.

One area that often gets overlooked is compliance with labor laws and regulations. Not only do these vary by country or locality, but failing to comply can bring up hefty employer fines. Balancing all these factors carefully will ensure that your costs are manageable and allow your business to develop effectively and with confidence.

Pick the number of employees, and it will calculate the monthly cost for a professional HR firm (as a good benchmark, we use the Gusto Plus plan to calculate the expected retainer). The cost represents comprehensive payroll, benefits, HR tools, and full support.

* Important note – this pricing considers you feed and operate the system. Engaging with a PEO (Professional Employer Organization) firm will substantially increase costs.

Startup Fractional CFO Cost

When it comes to determining the cost of a Startup Fractional CFO, there are several factors that need to be taken into account. Primarily, your organization’s size will affect what you can expect to pay.

Generally, larger companies have more complex financial structures and, therefore, require more insight and services from a part-time CFO. Additionally, the scope of services needed is important as well – if you need your CFO to not only track data but also assist in developing strategy, creating budgets and forecasts, consulting on mergers & acquisitions, or assessing overall financial health, this will add to the cost.

Your location may also play a role in price because some regions tend to cost more than others for fractional CFOs.

Finally, experience is an important factor – typically the more experienced a CFO is, the higher their hourly rate will likely be. Altogether, these components come together to form your Startup Fractional CFO Cost, so be sure to do your due diligence when considering price points!

To get an estimated cost, pick your startup stage (which gives us a clue about your needs and the complexity of your financials) and get a ballpark cost for a seasoned CFO with experience in service VC-backed startups.