# Finance Accounting

> Guide founders through startup finance and accounting fundamentals beyond fundraising. Use when a founder says "help me understand my burn rate", "what's my runway", "create a cash flow forecast", "set up bookkeeping", "monthly financial report", "when should I hire an accountant", "QuickBooks vs Xero", "board financial report", or asks about cash management, financial reporting, accounting software selection, or hiring finance help.

- Skill: `samuelcastro/finance-accounting` (Agent Skill, multi-file: 9 files)
- Install (CLI): `npx skillmds@latest add samuelcastro/finance-accounting`
- Raw SKILL.md: https://api.skillmd.com/api/skills/samuelcastro/finance-accounting/raw
- Safety review: pending
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: Docs & Writing
- Author: samuelcastro (https://skillmd.com/u/samuelcastro)
- Updated: 2026-09-22
- Page: https://skillmd.com/skills/samuelcastro/finance-accounting

---


# Finance & Accounting Skill

Guide founders through the financial fundamentals of running a startup — from setting up bookkeeping to understanding burn rate to preparing board-ready financial reports.

## Reference Files
- `references/bookkeeping-setup.md` — Software comparison, chart of accounts, daily practices
- `references/cash-flow-management.md` — Forecasting, AR/AP management, cash timing
- `references/burn-rate-runway.md` — Formulas, benchmarks, runway extension tactics
- `references/financial-reporting.md` — Monthly closes, board reports, stage-appropriate metrics
- `references/hiring-finance-help.md` — When to hire bookkeeper vs accountant vs fractional CFO
- `references/startup-finance-metrics.md` — Current benchmarks from high-growth startups
- `assets/Cash_Flow_Forecast.xlsx` — 12-month cash flow forecasting template
- `assets/Monthly_Financial_Report.xlsx` — Board-ready monthly reporting template

## Workflow

### Step 1: Diagnose Stage & Financial Maturity

**Ask:** "Where are you in your financial setup?"

| State | Signals | Next Step |
|-------|---------|-----------|
| **No system** | Founder doing books in spreadsheet/nothing | → Step 2: Bookkeeping Setup |
| **Basic bookkeeping** | Has software, needs cash management | → Step 3: Cash Flow Management |
| **Cash questions** | Unclear on burn/runway | → Step 4: Burn & Runway Analysis |
| **Reporting needs** | Has investors/board, needs reports | → Step 5: Financial Reporting |
| **Scaling finance** | Needs professional help | → Step 6: Hiring Finance Help |

**Stage Definitions:**

| Stage | Revenue | Typical Finance Setup |
|-------|---------|----------------------|
| Pre-seed | Pre-revenue | Founder + accounting software |
| Seed | <$1M ARR | Bookkeeper + accountant for taxes |
| Series A | $1-5M ARR | Controller or fractional CFO |
| Series B+ | $5M+ ARR | Full finance team |

### Step 2: Bookkeeping Setup

See `references/bookkeeping-setup.md` for complete guidance.

**Software Selection:**

| Software | Best For | Key Strengths |
|----------|----------|---------------|
| **QuickBooks Online** | US-focused, need payroll integration | Market leader, accountant familiarity, robust reporting |
| **Xero** | Startups, multi-currency, unlimited users | Clean UI, unlimited users on all plans, 1000+ integrations |
| **Wave** | Pre-revenue, bootstrapped | Free, simple |
| **Bench** | Want hands-off bookkeeping | Done-for-you service |

**Selection Questions:**
1. Where are you incorporated? (US → lean QuickBooks; international → lean Xero)
2. How many team members need access? (>3 users → Xero's unlimited users advantage)
3. Do you have multi-currency transactions? (Yes → Xero excels)
4. What does your accountant prefer? (Often decisive factor)

**Essential Setup Checklist:**
- [ ] Choose and set up accounting software
- [ ] Connect bank accounts and credit cards
- [ ] Configure chart of accounts (use startup template)
- [ ] Set up recurring transactions
- [ ] Establish expense categories aligned with financial reporting needs
- [ ] Invite accountant/bookkeeper access

### Step 3: Cash Flow Management

See `references/cash-flow-management.md` for complete guidance.

**Cash Flow Fundamentals:**

```
Cash Flow = Cash In - Cash Out

Key levers:
- Timing of customer payments (AR)
- Timing of vendor payments (AP)
- Payroll schedule
- Large one-time expenses
```

**13-Week Cash Flow Forecast:**
The standard for startups — weekly granularity for 3 months.

| Week | Beginning Cash | Cash In | Cash Out | Net Change | Ending Cash |
|------|----------------|---------|----------|------------|-------------|
| W1 | $500,000 | $50,000 | $80,000 | -$30,000 | $470,000 |
| W2 | $470,000 | $45,000 | $75,000 | -$30,000 | $440,000 |
| ... | ... | ... | ... | ... | ... |

Use `assets/Cash_Flow_Forecast.xlsx` template.

**Cash Management Tactics:**
- Invoice immediately upon delivery
- Offer early payment discounts (2/10 net 30)
- Negotiate extended payment terms with vendors (net 45, net 60)
- Time large purchases strategically
- Maintain cash reserve buffer (3+ months of runway)

### Step 4: Burn Rate & Runway Analysis

See `references/burn-rate-runway.md` for complete guidance.

**Core Formulas:**

```
Gross Burn = Total monthly cash outflows
Net Burn = Gross Burn - Monthly Revenue
Runway = Cash Balance ÷ Net Burn

Example:
- Monthly expenses: $150,000
- Monthly revenue: $50,000
- Net burn: $100,000
- Cash balance: $2,000,000
- Runway: 20 months
```

**2025 Benchmarks:**

| Metric | Target | Red Flag |
|--------|--------|----------|
| **Runway** | 24-30 months post-raise | <12 months |
| **Burn Multiple** | <1.5x | >3x |
| **CAC Payback** | <12 months | >18 months |

**Burn Multiple Formula:**
```
Burn Multiple = Net Burn ÷ Net New ARR

Interpretation:
- <1x: Excellent (efficient growth)
- 1-1.5x: Great
- 1.5-2x: Good
- 2-3x: Acceptable early stage
- >3x: Concerning
```

**Runway Extension Tactics:**
1. Right-size tech stack (audit subscriptions)
2. Renegotiate vendor contracts
3. Shift from full-time to contractors where appropriate
4. Accelerate revenue collection
5. Consider venture debt/revenue-based financing
6. Reduce scope/slow hiring

**Warning Signs:**
- Runway <6 months with no funding plan
- Burn increasing faster than revenue
- Burn multiple trending upward
- Cash balance declining faster than forecast

### Step 5: Financial Reporting

See `references/financial-reporting.md` for complete guidance.

**Monthly Close Process:**

| Day | Task |
|-----|------|
| 1-3 | Reconcile all bank/credit card accounts |
| 4-5 | Review and categorize transactions |
| 6-7 | Accrue expenses, recognize revenue properly |
| 8-10 | Generate financial statements, review for errors |
| 10+ | Distribute reports to stakeholders |

**Core Financial Statements:**

1. **Income Statement (P&L)**
   - Revenue by stream
   - COGS and gross margin
   - Operating expenses by category (S&M, R&D, G&A)
   - Net income/loss

2. **Balance Sheet**
   - Assets (cash, AR, prepaid)
   - Liabilities (AP, accrued expenses, debt)
   - Equity

3. **Cash Flow Statement**
   - Operating activities
   - Investing activities
   - Financing activities

**Board Reporting Package:**

| Section | Content |
|---------|---------|
| **Executive Summary** | Key highlights, metrics vs. plan |
| **Financial Statements** | P&L, Balance Sheet, Cash Flow |
| **KPI Dashboard** | ARR/MRR, growth rate, churn, LTV:CAC |
| **Cash & Runway** | Current cash, burn rate, runway months |
| **Forecast vs. Actual** | Variance analysis |
| **Hiring Plan** | Headcount, key open roles |
| **Key Risks** | What keeps you up at night |

Use `assets/Monthly_Financial_Report.xlsx` template.

### Step 6: Hiring Finance Help

See `references/hiring-finance-help.md` for complete guidance.

**Role Comparison:**

| Role | Focus | When to Hire | Typical Cost |
|------|-------|--------------|--------------|
| **Bookkeeper** | Day-to-day transactions, reconciliation | >50 transactions/month | $500-2,000/month |
| **Accountant** | Tax compliance, financial statements, GAAP | Tax filing, raising capital | $1,000-5,000/month |
| **Controller** | Month-end close, reporting, internal controls | $1-5M revenue | $8,000-15,000/month |
| **Fractional CFO** | Strategy, forecasting, fundraising, board relations | Raising capital, complex decisions | $3,000-10,000/month |
| **Full-time CFO** | All of above + team leadership | $10M+ revenue or Series B+ | $200K-400K+ salary |

**Decision Framework:**

| Your Situation | Hire |
|----------------|------|
| <$500K revenue, simple model | Part-time bookkeeper |
| Raising seed/Series A | Bookkeeper + accountant + fractional CFO |
| $1-5M revenue, scaling | Controller (can be fractional) |
| Post-Series A, complex ops | Fractional or full-time CFO |
| $10M+ revenue | Full finance team |

**Fractional CFO Triggers:**
- Preparing for fundraise
- Burn rate/runway unclear
- Need financial modeling
- Board wants more sophisticated reporting
- Complex decisions (M&A, international expansion)
- Cash flow concerns

## Output Types

### 1. Accounting Software Recommendation
- Comparison table for founder's situation
- Setup checklist
- Integration recommendations

### 2. Cash Flow Forecast
- 13-week rolling forecast spreadsheet
- Scenario analysis (base, upside, downside)
- Key assumptions documented

### 3. Burn/Runway Analysis
- Current metrics calculation
- Benchmark comparison
- Extension recommendations

### 4. Monthly Financial Report
- P&L with commentary
- Cash position and runway
- Key metrics dashboard
- Variance analysis

### 5. Finance Hiring Plan
- Current vs. needed capabilities
- Role recommendations with timing
- Budget considerations

## Anti-Patterns to Avoid

**Bookkeeping Mistakes:**
- Mixing personal and business expenses
- Not reconciling accounts monthly
- Using cash basis when accrual is needed
- Inconsistent categorization

**Cash Flow Mistakes:**
- Confusing profit with cash
- Not forecasting beyond 30 days
- Ignoring timing of large payments
- No cash reserve buffer

**Burn Rate Mistakes:**
- Only calculating gross burn
- Not tracking burn multiple
- Waiting until runway <6 months to act
- Ignoring seasonal patterns

**Reporting Mistakes:**
- Late or inconsistent reporting
- Not comparing to forecast
- Hiding bad news from board
- Too much detail, not enough insight

## Integration with Other Skills

- Use `fundraising` skill for investor financial materials
- Use `business-model` skill for unit economics analysis
- Use `operations` skill for hiring plan integration
- Use `xlsx` skill for spreadsheet creation
- Use `pptx` skill for board presentation decks

---

*Adapted from [Linas Beliūnas's](https://linas.substack.com/p/onepersonunicorn) **The One-Person Unicorn** founder skill set.*