TiE Silicon Valley: Finance Clinic for Startups

Entrepreneurs face everyday challenges when launching their business with respect to audit, advisory, and outsourced accounting. At TiE Silicon Valley’s recent “Finance Clinic for Startups” virtual event, a team from EisnerAmper discussed such challenges and provided practical solutions.

Our panelists included: 

• John Pennett, Partner
• Heidi Robbins, Manager

Self-Review Questions for Entrepreneurs 

Reflecting on the following questions can enable entrepreneurs to make a meaningful assessment of the effectiveness of their accounting and finance systems. 

• Do you have sufficient financial data timely available to make ongoing business operations decisions (for example, purchase of inventory and hiring staff)?
• Is the financial data you have reliable and comprehensive enough that you would be comfortable sharing it with external stakeholders and potential investors?
• Are you able to focus on your core business or product? Are there any tasks you can delegate to an internal team member or an external specialized service provider?
• Are you equipped to handle the tax implications of business decisions, particularly when dealing with equity- and stock-based compensation plans?
• Is your accounting team experienced enough to navigate through the complexities of the industry that you operate in? Do you need to hire a more specialized team?

Early Hiring Decisions 

• For a company in pre-funding or early funding stage, hiring an experienced full-time financial planning and analysis (FP&A) lead should be a priority. This person would be directly involved in refining the company’s revenue model, product pricing and cost analysis. They would act as a ‘financial business partner,’ providing insights into the short- and long-term financial planning of the company.
• Bookkeeping and preparation of basic financial statements can be performed most efficiently when outsourced to an accounting firm. They can optimize the use of the most suitable accounting tools and processes based on the scale and volume of transactions of the company.  This would, in general, be more cost effective than hiring a team of full-time internal accounting employees.

Key Takeaways 

• “Cash is king.” Have command and control over budgeted and projected cash flows. The forecasts should be as detailed as possible and in line with the overall strategy of the company.
• “Do what you do best.” Analyze the areas of expertise and competencies of core team members and focus their time and efforts on deriving the best use of these skills. Any other functions would be best outsourced.  

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