Skip to content
Startups
Runway is a number the books produce, or a number the founder guesses.
Burn is not the balance falling. It is a rate, measured against a close that actually happened, and it is the input to every decision a startup makes about hiring and timing.
Steingard Financial runs the monthly close so burn and runway are reported figures, and maintains records to the standard diligence will eventually apply to them.
What makes these books different
Runway is estimated from the bank balance
A balance is a point in time. Without a close, prepaid costs, unpaid invoices and timing distort what the burn rate actually is.
Diligence surfaces every shortcut at the worst moment
Records that were adequate internally are examined by someone else at precisely the point where delay is most expensive.
Equity and convertible instruments need recording
SAFEs, notes and option activity have accounting consequences that are easy to defer and awkward to correct later.
What the service includes
- Monthly close producing burn rate and runway as reported figures
- Expense categorization structured for investor and board reporting
- Contractor and vendor payment tracking, with 1099 preparation
- Recording of equity and convertible instrument activity, coordinated with the company’s counsel
- Financial statements formatted for board and investor review
- Historical cleanup ahead of a raise or a diligence process
How the engagement works
Establish the close
Steingard sets up a monthly close on a defined calendar, which for many early companies is the first one they have had.
Structure for the audience
Categories and reporting are built around what a board and an investor will ask, rather than reorganized under time pressure later.
Maintain through the raise
Records stay current as diligence begins, so requests are answered from what exists rather than assembled on demand.
What is different here
Runway, not profit
Most early-stage companies are deliberately unprofitable, which makes the profit figure close to irrelevant. The questions that matter are how long the money lasts and whether the model is improving.
Runway is the number
Cash on hand against net monthly burn. It determines hiring, spending and when fundraising has to begin, and it is worth more attention than any profit figure at this stage.
Investors read your books
Once outside money is involved, the records have an external audience with expectations about consistency and timeliness. Books tidied up shortly before a raise are visible as such, and diligence is a poor moment to discover a problem.
Revenue timing gets complicated early
Annual contracts paid up front, trials, usage pricing and refunds all separate cash received from revenue earned. Treating cash as revenue overstates growth in exactly the period you are being measured on.
Whether particular costs qualify for specific tax treatment is a question for your tax professional. The bookkeeping keeps the detail that determination needs.
Where this fits best
- Pre-seed through Series A companies
- Founders reporting to investors or a board on a regular cadence
- Companies preparing for a raise or entering diligence
- Companies with contractor-heavy spend and few employees
- Companies that have never closed their books monthly
What the books need to handle
The mechanics that matter early on
These are the things that are inexpensive to set up correctly at the start and disproportionately expensive to fix during diligence.
- Deferred revenue tracked properly. An annual contract paid up front is largely an obligation, not revenue. Recognised on receipt, both revenue and the balance sheet are wrong, and the error compounds monthly.
- Burn and runway reported monthly. Net burn and months of runway alongside the statements. This is the figure the board asks for and the one decisions actually turn on.
- Founder and company money separated from day one. The single most common early mess. Personal spending run through the business is tedious to unpick later and awkward to explain during diligence.
- Equity and convertible instruments recorded. Safes, notes and option grants have accounting consequences. They surface eventually, and it is better that they surface in your own records first.
- Cost structure coded so unit economics are derivable. Separating cost of delivery from sales spend and overhead early is what makes margin and payback answerable without a reconstruction project.
Nothing here requires a full finance function. It requires that the structure supports the questions you will be asked, before you are asked them.
Frequently asked questions
We are pre-revenue. Do we need bookkeeping yet?
Usually yes, and it is cheapest now. Pre-revenue companies still have burn, a bank account and spending that has to be explained later — and the habits established now are what keep the first raise from becoming an archaeology project.
Can you produce investor reporting?
Monthly reporting including burn and runway is a natural output of keeping the books this way. Specific investor formats are agreed as part of the engagement.
What about our SAFEs and convertible notes?
They are recorded so the capital structure is reflected in the books. How a particular instrument should be treated is a question for your accountant, and the records are kept to support the treatment.
We are on annual contracts. Does that change things?
It makes deferred revenue central. Cash received up front is mostly an obligation to deliver, and recognising it as revenue on receipt overstates growth in the period being measured.
Our books were done by a founder in a spreadsheet. Is that a problem?
It is a starting point, not a disaster. What it usually needs is a proper structure and a rebuild of the period covered — see cleanup and catch-up bookkeeping.
A note on scope
Recording an instrument is not advising on it.
Startups carry instruments — SAFEs, convertible notes, option grants — whose structure is a legal matter and whose consequences reach the financial statements. Steingard Financial records that activity accurately and coordinates with the company’s counsel on how it should be represented.
What the instruments should be, how they should be structured, and what they are worth are questions for the company’s legal and valuation advisors. Bookkeeping that pretends otherwise creates a much more expensive problem than the one it appears to solve.
The practical value is narrower and more useful: when diligence arrives, the records are current, the close is real, and the answers are already in the books.
Make runway a reported number.
Tell Steingard Financial where the company is in its funding cycle, and the review will cover what the books would need to support it.