Startup Back Office 101

So let’s face it: the reason we all start companies is to deal with the paperwork and admin that comes from owning your own business, right? Not. Still, it is a necessary evil and the truth is that running a tight back office goes a long towards helping you build a better business.

With that in mind, here’s a talk I gave to the Founderfuel teams this week along with some summary notes.

Back office is not core in the same way as product, development, etc. But it’s a foundation for your business. From accounting to¬† payroll/ HR, legal, board and governance stuff you need to focus some effort on this if you want to build a great business.

The reason why it matters can be boiled down to one simple word: trust. If you and your stakeholders (employees, investors, customers, etc) have the right info, then they will trust more. And if your stakeholders don’t trust you, it’s game over.


When it comes to accounting software, the big clunky desktop offerings of Quickbooks and Simply Accounting are still the gold standard. And your accountants only know how to use them. They don’t know how to use web-based accounting software. Of all the web offerings in the market, Xero is the best. Whatever you do, don’t use excel or a google doc for your accounting.

There are good services like Shoeboxed and Expensify that make it easy to record cash transactions.

To save time and $ get your bookkeeper involved no more than 2x/ month.


For payroll, don’t do this in house. It’s complicated and time consuming. And if you get it wrong the cost savings vs. using a 3rd party service will be eaten up in government fines. ADP and Ceridian are the main ones.

Only downside of 3rd party services is that you pay your payroll taxes upfront vs. 15 days after the month, so if you’re bootstrapping this can hurt cash-flow.


Startup success comes down to a few big moments, and they all involve complex legal docs. Don’t have your cousin the local legal practitioner as your lawyer. Only work with firms that specialize in this sector.

You don’t need your lawyer to look at every doc you sign. Biztree offers a very comprehensive set of legal and business document templates.

Don’t cobble together parts of various documents into a “frankenstein” agreement.

Scan all documents and build an organized and searchable archive.

Financial Reporting

Don’t just send investors an export of your accounting system. This is too much detail. Summarize and include a little blurb along with a dashboard. This saves investors time and saves you time as well as it gives them what they need so they won’t call you as much.


I’m biased but I think CFOs, especially operational ones can play a big role in a startup. You should have a part time one as soon as you’re getting ready to raise a series A.

Investor reporting / governance

As mentioned above, a monthly package with a dashboard and CEO report is the standard. You can report more frequently the earlier stage you are. If you have issues or negative surprises, use 1 on 1 calls with investors before a board meeting to deal with them.

And never hide or sugar coat issues. Give full disclosure of the good, the bad and the ugly. Again this is all about trust. If your investors don’t trust they are getting full info, bad things happen.

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  • Do you not recommend Quickbooks online for Payroll?

    • It's not available in Canada so cannot rate it unfortunately.

      • For whatever it's worth, it's extremely convenient and has been working great for us.

  • Hey Mark, we currently have our bookkeeper who is doing our accounting to also do our payroll – any downside to this?

    Also for vacation/sick days and other HR related stuff we are currently using a spreadsheet, but looking into tribe HR.

    • Just compare the cost of this with an external service. Plenty of companies do what you do. It starts to break down as your team changes a lot. If your team is stable then it won't take a lot of time fir your accountant to process.

      I like the tribehr solution

  • Mark, as usual your list is very comprehensive. I will say that some accountants (myself) not only know HOW to use web-based accounting but I am actually using Wave Accounting for my own business (and love it).

    • Nice. I have started playing with Wave. Wish it was easier to customize and add accounts, etc.

  • terry

    get a lockable file cabinet. have sections or drawers for:
    * vendors (each one gets a folder)
    * customers (each one gets a folder)
    * employees (each one gets a folder)
    * other (each one gets a folder)

    sure, you can do this via scanning, etc. but it's old-school and works easily.

    • Yeah you can do that but here is why I like digital: startup execs tend to be out of the office a lot and hthe people doing back office tend to be outsourced/ part time. Scans make it easy to access and easy to share anything you need