Situation and challenge
Starting a business as a company is a period of intensive development for a startup, but it also brings many formal obligations. Founders usually focus on the product, technology, customer acquisition, investor discussions and building a team. Accounting, taxes, accounting policies and the chart of accounts often take a back seat.
Yet setting up the books correctly from the start is essential to the company's financial and compliance security. Early mistakes can later hinder reporting, tax compliance, cost control, profitability analysis and discussions with investors or funding institutions.
A technology startup approached TOP Outsourcing as it was beginning operational activity. The company had no financial data yet, no accounting system in place, no accounting policies and no document workflow procedures. It needed comprehensive accounting support from scratch to operate in compliance with regulations and maintain full control of its finances from day one.
The project aimed to establish full accounting for the new company, prepare a chart of accounts, implement an accounting system, agree working arrangements and prepare the startup for ongoing financial reporting.
The problem: no accounting system, procedures or organised financial rules
The startup faced challenges typical of a newly formed company. It lacked not only accounting data but, above all, a framework for maintaining reliable, consistent books that would be useful to the management board.
The main challenges included:
1. No accounting policies or chart of accounts
The company had no formally defined rules for maintaining its books. Accounting policies, a chart of accounts and procedures for documenting business transactions had not been prepared.
In practice, this created a risk of inconsistent recording of expenses and revenue, later reporting difficulties and a lack of clear rules for recognising assets, liabilities, accruals and deferrals, fixed assets and intangible assets.
For a technology startup, the correct treatment of development costs, external services, licences, software, marketing expenses and investor funding was particularly important.
2. The need to implement an accounting system quickly
The startup needed a tool that would support both bookkeeping and ongoing monitoring of the company's financial position.
The accounting system needed to support:
- day-to-day recording of documents
- monitoring of expenses and revenue
- management reporting
- preparation of data for investors
- tax calculations and filings
- an efficient document workflow
- further development as the business grew.
The client expected more than accounting used solely to produce tax returns. It wanted a practical tool to support the management of the startup.
3. The founders' lack of accounting and tax experience
The founders had technological and business expertise but no experience of maintaining full accounting records for a Polish limited liability company.
Their concerns included:
- incorrect documentation of transactions
- delays in tax compliance
- incorrect classification of expenses
- difficulties with investor reporting
- insufficient control over liquidity
- incorrect preparation of documents for future inspections or analyses.
The startup needed a partner that would set up the books, take responsibility for ongoing accounting and help organise financial processes from the first day of operations.
What TOP Outsourcing did
The solution: setting up full accounting from scratch
TOP Outsourcing proposed a comprehensive accounting implementation for the new company. The project included preparing accounting policies, developing a chart of accounts, configuring the accounting system, introducing a document workflow and agreeing ongoing working arrangements.
Our objective was to create an accounting model compliant with the Polish Accounting Act, reliable for tax purposes and practical for a rapidly developing startup.
Step 1: Preparing accounting policies and a chart of accounts
The first stage was to prepare the documentation needed to maintain the books correctly.
We developed accounting policies specifying, among other things:
- rules for classifying expenses and revenue
- how fixed assets would be recognised
- rules for recording intangible assets
- how business transactions would be documented
- rules for allocating costs over time
- how accounting records would be maintained
- rules for preparing financial reports and schedules.
We then prepared a chart of accounts tailored to the technology startup's activities. We considered both current needs and expected growth, including potential funding, increasing transaction volumes, project cost reporting and the management board's information needs.
The accounting was therefore designed to meet the company's actual business needs as well as its statutory obligations.
Step 2: Configuring the accounting system
The next stage was to configure the accounting system in line with the adopted accounting policies and the chart of accounts prepared.
The implementation included:
- creating customer and supplier records
- configuring the chart of accounts
- preparing posting rules for basic transactions
- setting up VAT registers
- configuring fixed asset records
- preparing the structure of financial reports
- introducing an electronic document workflow
- agreeing how documents would be provided to the accounting team.
The system was set up to support ongoing transaction posting, prompt report preparation and efficient communication between the startup and TOP Outsourcing's accounting team.
Step 3: Introducing document workflow procedures
In startups, the biggest problem is often not accounting itself but a lack of clear rules for providing documents. Establishing simple, practical working procedures was therefore an important part of the project.
Among other things, we defined:
- which documents should be provided to the accounting team
- when documents should be submitted
- who within the company would approve expenses
- how to annotate expense invoices
- how to document expenses paid by card or bank transfer
- how to provide information on contracts, advances and customer and supplier settlements
- how communication with the accounting team would work.
This enabled the startup to operate within an organised model from the outset, avoiding disorganised documentation and the risk of important information not reaching the accounting team.
Step 4: Training the startup's team
We delivered a short training session for the people responsible for liaising with the accounting team. It was practical and covered the main arrangements for day-to-day cooperation.
Among other things, we discussed:
- how to provide documents
- how to annotate invoices
- which information is important for correct posting
- which tax deadlines are critical for the company
- how to read basic financial reports
- when transactions should be discussed before they are carried out.
This improved the founders' financial awareness and helped them understand how their own actions affected accounting and reporting quality.
Step 5: Moving to ongoing accounting services
Once the implementation was complete, the startup began ongoing cooperation with TOP Outsourcing.
The service covered:
- maintenance of accounting records
- day-to-day document posting
- VAT and CIT calculations and filings
- maintenance of fixed asset records
- monitoring receivables and payables
- preparation of financial reports
- support with cost analysis
- ongoing accounting and tax consultations
- preparation of data for the management board and investors.
The startup received comprehensive accounting services that allowed its founders to focus on product development and customer acquisition without managing accounting processes themselves.
Results and summary
Results: the startup began operating with organised accounting
With TOP Outsourcing's support, the company could begin operations with a complete, compliant and practical accounting system.
Operational readiness from day one
The startup began operating with accounting policies, a chart of accounts, a configured accounting system and an agreed document workflow in place. Its first transactions could therefore be recorded correctly from the outset.
Reduced risk of accounting and tax errors
Introducing structured posting rules reduced the risk of errors in accounting and tax compliance. From the start, the company operated under a model consistent with the Polish Accounting Act and tax regulations.
Financial transparency for the management board
The startup's management board gained access to current financial data. It could monitor costs, revenue, liquidity and the key indicators relevant to the company's early development.
Better preparation for investor discussions
Orderly books and the ability to prepare financial reports strengthened the startup's credibility in discussions with investors, business partners and funding institutions.
A scalable accounting model
The accounting was designed to grow with the company. The chart of accounts, accounting system and document workflow procedures considered both its current stage and future increases in transaction volumes and reporting needs.
Summary
This case study shows how professional accounting outsourcing can support a startup from its first day of operations. Correctly setting up the books, preparing accounting policies, developing a chart of accounts and introducing document workflow procedures help prevent disorganised accounting and reduce the risk of future errors.
By working with TOP Outsourcing, the startup gained:
- full accounting set up from scratch
- accounting policies tailored to its activities
- a chart of accounts designed for a technology company
- an implemented accounting system
- an organised document workflow
- ongoing accounting and tax support
- financial reporting useful to the management board and investors.
TOP Outsourcing supports startups and companies with setting up accounting from scratch, maintaining books, introducing financial procedures and building a reliable accounting outsourcing model.
