Looking for the best bookkeeping solution for tech startups - what are founders using in 2025?

Thanks for the detailed response! Do you think QuickBooks Online is still the best option compared to newer platforms like Xero? I've heard mixed things about QB's user interface. Also, any tips on finding a bookkeeper who actually understands SaaS metrics and revenue recognition?

Both QuickBooks Online and Xero are solid options - QBO has better integration with US tax software which is helpful come filing time, while Xero tends to have a cleaner interface that many find more intuitive. If you're planning to raise venture funding later, QBO is slightly more preferred by most investors for financial reporting. Finding a good SaaS-focused bookkeeper is crucial. Look for someone who immediately asks about your subscription terms, can explain ASC 606 revenue recognition in simple terms, and has experience with other SaaS clients. Check tech founder communities like Indie Hackers or SaaS forums for recommendations - avoid generic bookkeepers who primarily work with retail or service businesses.

How accurate is it really? I've tried other "AI" finance tools that claim to automatically categorize expenses, but they constantly mislabel things and create more work fixing their mistakes.

Does it handle multiple entities well? I have my main SaaS product plus a small consulting business that helps fund development, and keeping everything separate has been a nightmare.

The accuracy is surprisingly good - I'd say about 95% correct categorization right out of the gate. Unlike other tools I've tried, taxr.ai actually learns from your corrections instead of making the same mistakes repeatedly. The few errors I've seen were with really ambiguous vendor names, but it got better after a few weeks of use. It handles multiple entities beautifully - that's actually one of their strengths. You can set up different business profiles and it keeps everything separate while still giving you a consolidated view when needed. I'm also running a main product with a side consulting business, and it properly allocates shared expenses based on rules you define.

How does this actually work? I've been trying to talk to someone at the IRS for weeks about a weird letter I got questioning my software subscription deductions. Do they really get you through faster?

This seems too good to be true. The IRS is basically unreachable these days. I've heard they answer like 2% of calls. You're telling me this service somehow gets priority access? I'm extremely skeptical.

It works by essentially waiting in the IRS queue for you. You tell them what line you need to reach and your issue, and their system continuously calls and navigates the IRS phone tree until they get a human. When they do, they immediately call you to connect. It's not priority access - they're just handling the frustrating wait time so you don't have to sit there for hours. They specialize in connecting with hard-to-reach government agencies, not just the IRS. I was skeptical too until I tried it - the system called me back in about 18 minutes, and I was speaking with an actual IRS representative who helped clarify my R&D expense questions. Completely changed how I was categorizing certain development costs.

Does Xero handle revenue recognition well for subscription services? We're having issues with our current setup properly spreading annual payments across 12 months.

Xero handles subscription revenue recognition pretty well. You can set up automated journal entries to spread annual payments across 12 months. It takes some initial setup with a template, but once it's running, it works smoothly. We have clients who pay annually, quarterly, and monthly, and the system keeps it all straight. For really complex subscription setups, we did add a Xero plugin called "Deferred Revenue" that adds some extra functionality, but most startups won't need that until they're at a larger scale.

Wave is definitely underrated! I do have issues with it handling my AWS and GCP invoices tho. Constantly miscategorizes them as personal expenses for some reason.