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How do startups handle bookkeeping before raising investment?
Short answer
Use accrual accounting from the start, keep a clean cap table, reconcile monthly and produce investor-ready monthly reports. Due diligence goes much faster with tidy books.
Detailed answer
Build records suitable for review
Investors often expect accrual-based financial reporting, but statutory and tax requirements should be confirmed for your entity and stage. Keep contracts, asset records, borrowing, founder transactions and equity documentation organised. A cap table is important legal ownership information, not a substitute for reconciling the accounting ledger.
Prepare an evidence-backed pack
Close accounts monthly and maintain a forecast with clearly stated assumptions. Track revenue quality, burn rate, cash runway and outstanding obligations. Before fundraising, reconcile reports with contracts and supporting schedules and have material accounting policies reviewed. Avoid presenting speculative forecasts as historical performance.
Country differences: rules, thresholds and terminology differ between the US, UK, Australia and Canada. Check the official source for your country below.
Official sources
Published by Expert Bookkeeping Services · Last updated 2026-11-01. General information only — confirm specifics for your situation with a qualified adviser.
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