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The Difference Between Accounting and FP&A


Accounting and FPA

Click the image above to read the complete guide


Accounting & FP&A each contains key responsibilities…

and together they make up your Finance & Accounting 🤝


Here’s an overview on what Accounting does


Accounting


🔸Financial Reporting - “closing out” your financial statements in your accounting software (often known as bookkeeping)


🔸AP - coordinating & processing bill payments to vendor


🔸Invoicing - sending invoices to customer, and coordinating collections


🔸Payroll - onboarding employees, approving & processing payroll, coordinating with state tax agencies (parts of this function may be handled under HR)


🔸Taxes - annual federal & state income tax filings, Delaware franchise tax, sales tax (typically not done in house at a startup)


🔸 Audit - coordinate audit with external auditing firm (usually done after Series B)


But that’s just one side of the coin.


The other function is just as crucial…


Financial Planning & Analysis (FP&A)


🔹 Projections - adding forecasted figures for all areas of the business (revenue, cash flows, ARR)


🔹 Data analysis - analyzing data to optimize for better costing / profitability


🔹 Budget vs Actuals - comparing what you had projected vs what actually took place. (My favorite area of FP&A)


🔹 Board reporting - providing the board of directors with key summaries on what’s happening…another one of my favorites


🔹 Fundraising - wowing investors, and showing them how you’ll be 100x’ing each month for the rest of eternity 🤑


This has been my experience with Accounting vs FP&A, primarily driven by my experience in working with startups...


The truth is, the split can look fairly different across other organizations & industries

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