Updated 26 July 2026
In this guide
Idea stage: structure and nothing fancy
Before revenue, the accounting job is a short list done right:
- Structure. Most startups aiming for outside investment or an eventual exit incorporate a company from day one: investors subscribe for shares, founders' CGT concessions on exit can be preserved, and IP sits in a clean entity. Founders bootstrapping a lifestyle business have more options; the trade-offs live in our structuring guide. Getting structure wrong is fixable but expensive; founder equity moved after value exists triggers CGT and duty.
- Founder agreements on paper. Equity split, vesting, what happens when someone leaves. Accounting-adjacent, cheap now, ruinous later.
- Registrations. ABN, TFN, GST once turnover warrants (or immediately if credits on startup costs matter), and clean books from transaction one; the sole trader essentials apply until the company forms.
- Blackhole costs captured. Formation and setup costs that fit nowhere else deduct over five years; they get lost when nobody records them.
What you do not need yet: monthly management packs, virtual CFO retainers, audited anything.
Revenue stage: systems and the R&D question
Once money moves, two things change.
First, compliance becomes real: BAS cycles, payroll with Single Touch Payroll and payday super from the first hire, PAYG instalments after the first profitable return, and Division 7A discipline the moment founders draw beyond wages. This is systems work: Xero configured properly once beats bookkeeping heroics forever.
Second, the R&D tax incentive enters the picture, and it is the largest cash lever most eligible startups ignore or misclaim. Companies with aggregated turnover under $20 million receive a refundable tax offset of 43.5% on eligible R&D expenditure, refundable meaning paid in cash even with no tax liability. A pre-revenue company spending $300,000 on eligible development can receive roughly $130,000 back. The gate is eligibility: activities must be genuine experimental R&D resolving technical uncertainty, registered with AusIndustry within ten months of year end, with contemporaneous records tying costs to activities. The claims that fail in audit are the ones written retrospectively from invoices; ours are built from the project documentation as the year runs. If you spend real money on development, this conversation pays for years of fees.
Raising stage: numbers investors can diligence
A raise is an audit by people who want reasons to reprice you. The raise-ready file has: clean historical financials reconciling to bank and BAS, a cap table that matches ASIC records, revenue recognised defensibly (deferred revenue treated properly, not cash-as-income), R&D claims documented, and a forecast whose assumptions survive questioning. Weeks of diligence delay kill momentum and terms; the fix is keeping the file raise-ready from revenue stage, which costs little more than keeping it messy.
Two adjacent items land here:
- ESOP. Employee share schemes let startups pay partly in equity. The startup concession can defer tax for employees and remove upfront taxation on qualifying options, but the scheme must be designed to qualify, valuations set properly, and reporting handled annually. Design before the first grant; retrofitting a scheme after promises were made is where it goes wrong.
- Early stage investor incentives. Qualifying as an early stage innovation company gives your investors a 20% offset and CGT concessions, which is a selling point in the raise itself. Whether you qualify is a test worth running before the pitch deck claims it.
CA firm or generalist bookkeeper?
Until revenue, a generalist handles the basics fine. The moments that need chartered-level depth are exactly the expensive ones: structure and founder equity, R&D eligibility and audit defence, ESOP design, Division 7A once founders draw, and the raise file. The economic answer for most startups is a CA firm engagement scoped lightly at first, scaling as the company does, rather than a cheap start plus a painful mid-flight switch when the raise looms; what to check before engaging anyone is in our choosing an accountant guide.
Frequently asked questions
When should a startup engage an accountant?
At structure decision time, before incorporating, because founder equity and IP placement are cheapest to get right at the start. Ongoing engagement can stay light until revenue.
What is the R&D tax incentive worth to a startup?
A refundable 43.5% offset on eligible R&D spend for companies under $20 million turnover, paid in cash even without tax payable. Roughly $130,000 back on $300,000 of eligible spend.
Do I need a company to claim the R&D tax incentive?
Yes, the incentive is only available to companies, which is one of several reasons startups planning real development spend incorporate early.
What structure should a startup use?
Startups seeking investment almost always use a company. Bootstrapped businesses have more options, weighed on tax, liability and exit plans.
What is an ESOP and does my startup need one?
An employee share scheme paying team members partly in equity. Worth designing once you hire people you cannot fully pay in cash, and before any equity promises are made.
When do investors look at my accounts?
At diligence, in detail, against bank data and BAS. A raise-ready file maintained from revenue stage protects both timeline and valuation.
Build it right from the start
Structure, R&D eligibility and the raise file are one conversation early and three problems late. Book a startup consult with our business team.
Book a startup consultThis article provides general information only, current at the date of publication, and does not constitute personal tax, legal or financial advice. Consider your circumstances or speak with us before acting. Liability limited by a scheme approved under Professional Standards Legislation.
