The Difference Between Accounting and FP&A

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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