Startup Accounting
Common Financial Mistakes First-Time Founders Make
Collated by Aparna Devalla, CPA
Curated by Rubric Financial
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Mixing Personal and Business Finances
- Using a personal bank account for business transactions makes it nearly impossible to produce clean financial statements and creates audit risk.
- Commingled funds can pierce the corporate veil, exposing founders to personal liability for company debts and obligations.
- Open a dedicated business bank account and business credit card before spending a single dollar — Mercury, Brex, and SVB all offer startup-friendly options.
- Reimburse founders for legitimate business expenses through a formal expense reimbursement process with receipts and documentation.
Related Resources
Startup Accounting
GAAP Basics for Startups
Understand the Generally Accepted Accounting Principles that every startup needs to follow, from revenue recognition to accrual accounting.
Startup AccountingRevenue Recognition for SaaS (ASC 606)
The five-step framework for recognizing SaaS revenue correctly under ASC 606 — with practical examples.
Startup AccountingDeferred Revenue Explained
Why annual SaaS contracts create a liability on your balance sheet — and what investors look for in your deferred revenue.
