A founder closes a $2 million seed round and immediately gets two pieces of advice from her lead investor: hire a great engineer and find a CPA who understands startups. She hires the engineer in a week. The CPA search takes three months — because most accounting firms have never worked with a venture-backed company, don’t understand startup tax credits, and quote pricing structures that assume she has the same needs as a 20-year-old plumbing company.
Finding the right CPA for startups is harder than it should be. The accounting industry wasn’t built for early-stage companies with deferred revenue, stock option grants, and burn rates that change quarterly. General-practice CPAs can file your taxes, but they’ll miss the R&D credit, won’t know how to handle 83(b) elections, and can’t prepare the financial package your Series A investors will expect.
This guide covers what startup-specific CPA services actually include, how to evaluate firms, what it costs, and what separates a CPA who checks the boxes from one who adds real value to your business.
What a Startup CPA Does Differently
A CPA for startups isn’t just a tax preparer who happens to work with younger companies. The financial mechanics of a startup — equity compensation, revenue recognition for subscription models, multi-state nexus from remote employees, and cap table management — require specialized knowledge that most general-practice firms don’t have.
Here’s what startup-specific CPA services typically include:
Tax compliance and strategy. Federal and state filing is the baseline. The real value is in tax strategy: R&D tax credits (Section 41), which can offset payroll taxes for pre-revenue startups. Startup cost deductions (Section 195). QSBS exclusions (Section 1202), which can eliminate capital gains taxes on qualified small business stock. 83(b) elections for founders and early employees receiving restricted stock. A CPA who doesn’t proactively raise these isn’t serving a startup.
Bookkeeping and monthly close. Clean, GAAP-compliant books are table stakes for fundraising. Your CPA or their team should deliver reconciled financials within 15-20 business days of month-end — P&L, balance sheet, and cash flow statement. If your books are a mess, a bookkeeping cleanup is the first step before ongoing work begins.
Revenue recognition. SaaS companies with annual contracts, usage-based pricing, or multi-element arrangements need ASC 606-compliant revenue recognition. Getting this wrong doesn’t just create audit risk — it makes your financials unreliable for investors.
Equity and stock option accounting. Tracking grants, exercises, and forfeitures. Supporting 409A valuations. Ensuring option pool accounting is correct. This matters from day one if you’re issuing equity to employees.
Fundraising support. Investors will request historical financials, tax returns, and supporting schedules during due diligence. A startup CPA prepares these materials and coordinates with legal counsel. The difference between a smooth diligence process and a messy one often comes down to how well the books were maintained beforehand.
Multi-state tax compliance. Remote employees create nexus in every state they work from. Sales tax obligations multiply as you sell across state lines. A startup CPA tracks these obligations and files accordingly — or tells you when the exposure is too small to worry about.
How to Evaluate a CPA Firm for Your Startup
Not every CPA who claims startup experience has meaningful startup experience. Here’s how to separate the real ones from the generalists.
Ask how many venture-backed clients they serve. A firm that works with 2-3 startups as side projects operates differently than one where startups are a core practice. You want the latter. Startup accounting has enough nuance — from cap table management to ASC 606 — that it requires dedicated expertise.
Ask about their tech stack. Modern startup accounting runs on cloud tools: QuickBooks Online or Xero for bookkeeping, Gusto or Rippling for payroll, Carta for cap table management, Brex or Ramp for corporate cards. If a firm is still running desktop QuickBooks and Excel-based reporting, their processes won’t keep up with your pace.
Ask for their close timeline. How quickly do they deliver monthly financials? Best-in-class firms close within 15 business days. If the answer is “end of the following month” or vague, that’s a red flag — you’ll be making decisions on stale data.
Ask what’s included vs. extra. Some firms quote a monthly fee that covers bookkeeping and tax prep. Others charge separately for every additional task — 409A coordination, R&D credit studies, state registrations. Get the full picture before signing.
Ask for references at your stage. A firm that excels with Series B companies may not be the right fit for a pre-seed startup with five transactions a month. Stage matters because the scope, pricing, and level of attention differ dramatically.
Red flags:
They’ve never filed an R&D tax credit for a startup They can’t explain the difference between ASC 605 and ASC 606 They don’t have a defined onboarding process Their pricing is hourly-only with no estimate range They can’t name the tools they use without thinking about it
What Outsourced CPA Services Cost for Startups
Pricing depends on your stage, transaction volume, and what’s included. Here are realistic ranges based on market data:
| Stage | Monthly Cost | What’s Typically Included |
|---|---|---|
| Pre-seed (< $500K raised) | $500–$1,500/mo | Basic bookkeeping, quarterly reconciliation, annual tax filing |
| Seed ($500K–$3M raised) | $1,500–$4,000/mo | Monthly bookkeeping, monthly close, tax prep, R&D credit, basic reporting |
| Series A ($3M–$15M raised) | $3,000–$7,000/mo | Full monthly close, GAAP financials, tax strategy, 409A coordination, investor reporting support |
| Series B+ ($15M+ raised) | $5,000–$12,000+/mo | Comprehensive accounting, controller oversight, audit support, multi-state compliance |
One-time costs to expect:
Initial cleanup and setup: $2,000–$8,000 depending on how messy your books are R&D tax credit study: $3,000–$8,000 (often worth 5-10x the fee in credits) 409A valuation coordination: typically handled by a third party at $2,000–$5,000
Pricing models:
Fixed monthly retainer is the most common and most predictable. You pay a set fee for a defined scope of work.
Tiered packages let you start with basic bookkeeping and add services as you grow — controller oversight, CFO-level reporting, tax strategy.
Hourly billing is less common for ongoing work but sometimes used for project-based engagements. Ask for an estimate range if a firm bills hourly — open-ended hourly billing with no cap is a cost control risk.
For a broader look at what outsourced accounting costs across different business sizes, see our outsourced accounting cost breakdown.
CPA vs. Outsourced Accounting Firm vs. Fractional CFO — What Do You Actually Need?
This is where most founders get confused. The titles overlap, the services blur together, and every provider claims to do everything. Here’s the practical distinction:
| Role | What They Do | When You Need Them |
|---|---|---|
| CPA / Tax Advisor | Tax compliance, tax strategy, R&D credits, entity structuring | From day one — every startup needs tax support |
| Outsourced Accounting Team | Bookkeeping, monthly close, AP/AR, financial statements | Once transaction volume exceeds what you can manage yourself |
| Fractional CFO | Financial modeling, fundraising prep, board reporting, strategic planning | When you’re making decisions that require financial analysis, not just accurate books |
Many firms — including ours — combine these under one roof. The advantage: your books, your tax strategy, and your financial planning all share a single source of truth instead of three providers who don’t talk to each other.
If you’re at the point where a bookkeeper handles your transactions but nobody is helping you think about runway, pricing, or growth strategy, that’s usually the signal that fractional CFO support makes sense. It’s a different service than CPA work, but the two work best when they’re coordinated.
For a deeper look at how these roles divide — especially the controller layer in between — see our breakdown of CFO vs. controller responsibilities.
Questions to Ask Before You Hire
Use these in your evaluation conversations:
How many venture-backed startups do you currently serve, and at what stages? Have you filed R&D tax credits under Section 41? How many, and what was the typical credit size? What’s your average close timeline for monthly financials? How do you handle 83(b) elections and 409A valuation coordination? What’s included in your base monthly fee, and what’s billed separately? What accounting software do you work with? Can you provide references from startups at my stage? How do you handle scope changes — if my transaction volume doubles, what happens to pricing?
The answers tell you more than any website or sales deck. A firm that hesitates on R&D credits or can’t name their close timeline isn’t operating at startup speed.
Frequently Asked Questions
How much does a CPA cost for a startup?
Startup CPA services typically range from $500 to $7,000+ per month depending on stage and scope. Pre-seed startups with simple books might pay $500–$1,500 monthly. Series A companies with full GAAP reporting, tax strategy, and investor support typically pay $3,000–$7,000. Annual tax preparation adds $2,000–$5,000 on top of monthly fees, though many firms bundle it into the retainer.
What tax credits are available for startups?
The most valuable are the R&D Tax Credit (Section 41), which allows qualifying startups to offset up to $500,000 in payroll taxes annually. QSBS exclusions (Section 1202) can eliminate capital gains on qualifying stock. Startup cost deductions (Section 195) allow up to $5,000 in first-year deductions for organizational and startup expenses. 83(b) elections let founders and early employees recognize income on restricted stock at grant value rather than vesting value — saving significant taxes if the stock appreciates.
Do I need a CPA or an accountant for my startup?
A CPA (Certified Public Accountant) is licensed to provide tax advice, represent you before the IRS, and attest to financial statements. A general accountant or bookkeeper can handle day-to-day transaction recording but can’t provide tax strategy or sign off on audited financials. Most startups need both: a bookkeeper or outsourced accounting team for daily operations and a CPA for tax compliance, credits, and strategy.
When should a startup hire a CPA?
Immediately — even at pre-seed. Entity structure decisions (LLC vs. C-corp vs. S-corp) have tax implications that are expensive to unwind later. Early equity grants require 83(b) election filings within 30 days. R&D credits can be claimed from your first qualifying tax year. The cost of waiting is almost always higher than the cost of getting it right from the start.
Your CPA should be someone you call before making financial decisions, not someone you hand receipts to once a year. The right firm understands startup mechanics, moves at startup speed, and grows with you from seed to scale.
Talk to Exact Partners about CPA and outsourced accounting for your startup →
