Accounting for AI/ML Startups

With the rapidly evolving technology landscape and complex tax regulations AI/ML startups are discovering they need specialized accounting services to navigate their unique challenges.
EARLY-STAGE-STARTUP-TAXES

Why AI/ML startup accounting is anything but simple

Remember when Machine Learning (ML) and Artificial Intelligence (AI) were mere buzzwords? Now, they’re at the core of countless innovative startups. As a startup in the AI/ML space, you’re focused on developing cutting-edge technology that can change the world.

However, just because your business is breaking new ground doesn’t mean its accounting is simple. In fact, with the rapidly evolving technology landscape and complex tax regulations, more and more AI/ML startups are discovering they need specialized accounting services to navigate their unique challenges.

Your AI/ML startup is centered on developing algorithms, models, and software solutions to analyze and process vast amounts of data. Your business model may involve licensing your technology, offering subscription-based services, or providing consulting services. Regardless of your business model, there are specific accounting considerations that come into play.

If you’re operating alongside startups like OpenAI, DeepMind, and UiPath, there are a few things you should know.

Specialized accounting for AI/ML startups

AI/ML startups have unique ways of generating revenue and operating their business. As a result, accounting for AI/ML startups involves specific accounting principles and procedures that differ from traditional businesses.

 

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Research and development costs

AI/ML startups often invest heavily in research and development (R&D) to create innovative solutions. These costs must be accounted for appropriately, including determining which expenses can be capitalized and amortized over time.

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Grants and funding

Many AI/ML startups receive grants or funding from various sources, including government agencies and venture capital firms. Proper accounting for these funds is crucial to ensure compliance with any stipulations or reporting requirements.

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Taxation

Your AI/ML startup may face unique tax requirements and regulations, such as R&D tax credits, transfer pricing considerations, and taxation of IP. Navigating these complexities is critical to your startup’s financial health.

AI/ML Startups need to consider:

Finding the accounting your AI/ML startup needs

Accounting for AI/ML startups requires careful attention to the unique factors at play, like revenue recognition, research and development costs, intellectual property, and taxation. You need accurate and timely accounting information to make informed business decisions and manage your finances effectively.

Enter: our team. Here at ShayCPA, we specialize in providing accounting services for startups like yours in the AI/ML space. Our team of accounting professionals understands the complexities of AI/ML startups and what it means for your books. To discuss how we can help you navigate the financial challenges of your AI/ML startup, get in touch.

Case Study

Voxel AI

Co-founded by a diverse team with experience from some of the tech industry’s biggest names, the mission of Voxel AI is to use Artificial Intelligence and robotics to create new standards in worker protection for safety and sustainability.

The Voxel platform sends real-time notifications of safety violations and risky behaviors to on-site personnel and provides detailed reports with an analysis of past incidents, all while integrating with current user security systems.

We’ve assisted Voxel AI with: 

  • Manage all Federal and State tax compliance
  • Put cash back into the Startup by helping Voxel Labs qualify for valuable Research & Development Tax Credits. 

 

“From the R&D credit to filing taxes, we know Shay CPA has the knowledge and expertise to care for what we need. Given that we have little time and resources to devote, they are incredibly efficient and diligent in obtaining the information needed to ensure we are compliant. They are a rare firm that truly understands the nuances of venture-backed startups.”

5 stars

Kacie Armbrust

Director of Finance & HR., Voxel AI

Monthly Accounting Pricing

Quarterly

Starting at

$900/quarter (discount if billed annually)
($10,000/in monthly expenses)
  • Reconcile Quickbooks Online (10 hours per Quarter)
  • Cash-Based Bookkeeping
  • Quarterly Video Review
  • Chart of Accounts Template Provided
  • Annual Meeting

Pre-Seed

Starting at

$1000/month(discount if billed anually)
($50,000/in monthly expenses)
  • Reconcile Quickbooks Online
    Accrual Based Bookkeeping
  • Monthly Call
  • Chart of Accounts Template Provide
    A/P A/R Tracking By Client

Monthly

Starting at

$1500/month(discount if billed anually)
($50,000/in monthly expenses)
  • Reconcile Quickbooks Online
  • Accrual Based Bookkeeping
  • Monthly Call
  • Customized Chart of Accounts
  • Deferred Revenue Recognition
  • A/P, A/R Tracking
  • Inventory/COGS Reconciliation
  • Financial Metrics
  • Sales Tax Filings *
  • Monthly Financials delivered by the 15th after month end

*up to one state included in sales tax

Series A & Beyond

Based On Your Needs

Custom Quote

(discount if billed annually)

  • Reconcile Quickbooks Online
  • Accrual Based Bookkeeping
  • Monthly Calls and ongoing communication
  • Customized Chart of Accounts
  • Deferred Revenue Recognition
  • A/P, A/R Tracking
  • Inventory/COGS Reconciliation
  • Board Financials and Metrics
  • Sales Tax Filings
  • Monthly Financials delivered based date requested

Additional Tax Services

State and local taxes (SALT)

Beyond the corporate taxes to which your company is subject, we also provide services for any state and local taxes that apply to your startup. For example, we work with many tech companies incorporated in Delaware and support them with their Delaware Annual Filings.

Cross-border taxes

If you work with international investors or you plan to expand abroad, our cross-border tax expertise can help you comply with the complex applicable tax regulations. We have experience working with companies that have connections in Lebanon, Canada, the UK, South America, and various EU nations.

Our Process

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Step 1: Contact Us

Get in touch and we’ll reach out to you to schedule a video call to better understand your tech startups needs and prepare a custom quote.

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Step 2: Onboarding

We’ll invite you to our secure client portal where you can use our easy to use onboarding checklist to get started. See general pricing guide here.

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Step 3: Review

We schedule ongoing video calls with you to review your financials and ensure all of your tax compliance is taken care off.

If you’re ready to explore our tax services for tech startup C corporations, don’t hesitate to contact our team today.