Start Strong
Melbourne’s Startup Accountants — Build Strong Foundations for Growth
The Challenge
The Startup Accounting Challenge
What does a startup accountant do?
A startup accountant helps founders choose a business structure, set up accounting systems, meet tax obligations and understand cash flow. Depending on the engagement, the work can include bookkeeping, payroll, BAS, financial statements, three-way forecasts and an assessment of eligibility for the R&D Tax Incentive. The right scope depends on the business model, the funding plan and the stage the company is at.
Starting and growing a business in Melbourne’s fast-moving startup scene comes with endless complexity — and accounting is often where founders feel it first. Between compliance, tax, and investor expectations, what begins as a side task can quickly become a strategic bottleneck.
At 42 Advisory, we understand that most founders don’t struggle because they lack vision — they struggle because they lack visibility. Our role is to give you the financial clarity and structure to make smarter decisions, sooner.
The challenges we help you overcome:
Choosing the right structure — company, trust, or hybrid, tailored for long-term goals
Staying compliant — BAS, payroll, and ATO deadlines without the admin stress
Accessing incentives — R&D tax, startup grants, and early-stage investor concessions
Managing cashflow — forecasting with precision so growth doesn’t outpace liquidity
Scaling systems — automating Xero, FYI, and reporting tools for real-time insight
With the right accounting foundation, your startup can scale confidently — with numbers that tell the same story as your ambition.
Professional Expertise. Connected Systems.
Accounting Expertise and Cloud Tools for Melbourne Startups
Our Approach
Startup accounting services from setup to growth
Stage 1 — Establish: how should we set up the business?
We assess whether a company, trust or sole trader structure suits your funding plans, ownership and exit intentions, then complete the setup: ASIC company registration, ABN, TFN, GST and PAYG withholding registrations, and a Xero file with a chart of accounts built for your business model rather than a generic template.
Stage 2 — Operate: are the books accurate and the obligations covered?
Ongoing work covers bookkeeping and management reporting, payroll and Single Touch Payroll, BAS and IAS lodgement, annual financial statements, the company tax return and ASIC annual review. The reporting frequency and the scope are set in your engagement, not assumed.
Stage 3 — Plan: how long will our cash last?
We prepare three-way forecasts covering profit and loss, cash flow and balance sheet, with runway and scenario modelling and budget-to-actual reporting each month or quarter.
A simple runway estimate divides available cash by average monthly net cash outflow. For example, $180,000 of available cash against $30,000 of monthly net outflow gives six months. That illustration assumes stable spending and receipts; a working forecast also allows for upcoming tax payments, hiring, capital expenditure, restricted cash and funding that has not yet landed.
Stage 4 — Fund and grow: can we explain our numbers to investors?
We prepare the financial information investors and lenders ask for, document the assumptions behind the forecast, and assess eligibility for the R&D Tax Incentive and for Early Stage Innovation Company status. Software and platform businesses can also read our approach to accounting for SaaS businesses.
Fees and scope
How much does startup accounting cost?
Our fees depend on your structure, transaction volume, payroll, reporting frequency and the advisory work you want. We separate three things so you can see what you are paying for:
One-off setup
Company or trust establishment, registrations and accounting system setup, quoted as a fixed amount before we start. ASIC registration and annual review fees, trust deed costs and software subscriptions are charged at cost and shown separately — they are not part of our fee.
Ongoing compliance
A fixed monthly or annual fee covering the bookkeeping, payroll, BAS, financial statements and tax return work agreed in your engagement. Catch-up bookkeeping for prior periods is quoted separately once we have seen the file.
Separately scoped projects
Three-way forecasts, R&D claim preparation, ESIC eligibility assessments and investor or lender reporting are scoped and quoted individually, because the work varies considerably between businesses.
Your proposal sets out what is included, what is excluded, the reporting frequency and the price before you engage us. If something falls outside the agreed scope, we tell you and quote it before doing the work.
The information on this page is general in nature and does not take your circumstances into account. We recommend obtaining advice specific to your situation before acting.
Setup Services
Startup Setup & Structuring Services
Sole Trader Setup
For founders starting out, a sole trader structure can be a simple and cost-effective way to begin. We help you set up correctly, manage ATO registrations, and understand the tax, liability, and scalability implications from day one — so you’re not caught out as your business grows. For a clear breakdown, see our guide on sole trader structure in Australia: pros, cons and tax implications.
Company Registration
We handle every detail of your company registration, ensuring compliance from the start. Our team manages ASIC registration, ABN and TFN setup, and ATO lodgements, all while tailoring your share structure to suit your founders and investors. If you would like to learn more about company structures in Australia, including how they affect tax, control, and scalability, our detailed guide explains the key considerations. Whether you’re registering your first company or restructuring an existing one, we ensure every document, registration, and system is aligned and ready for growth.
Trust Setup
Whether you need a family, unit, or discretionary trust, we establish it correctly and efficiently from the start. We handle legal documentation, trust deeds, and ATO registration, including ABN and GST setup. You’ll also receive ongoing compliance guidance to ensure your trust structure continues to deliver the right tax and asset protection outcomes as your business evolves.
Business Structure Advice
Your business structure impacts everything — from how much tax you pay to how easily you can raise capital or protect your assets. We take the time to understand your goals and advise on whether a company, trust, partnership, or hybrid model suits your needs best. Using scenario planning and real-world tax modelling, we help you make confident, informed decisions that position your startup for sustainable growth. Learn more about how to choose the right business structure for your startup.
Why Founders Choose 42 Advisory
Smart Tech. Local Expertise. Strategic Insight.
We combine Melbourne-based expertise with powerful accounting technology to help startups move faster and make smarter decisions. From KPI dashboards to 3-way forecasts, our proactive advisory model gives you the clarity to grow with confidence.
Our team doesn’t just balance books — we help you balance ambition with financial reality. With fixed fees, fast response times, and startup-focused systems, we make your numbers work harder for you.
For founders weighing pricing models, our guide on fixed-fee vs hourly accounting for startups explains how each approach affects cash flow, advisory value and long-term planning.
Startup engagements are led by Sergiy Kucherenko CPA, a director of 42 Advisory. Forty Two Advisory Pty Ltd is a CPA Practice and a Registered Tax Agent (Tax Practitioners Board registration 26303651, ABN 53 685 405 458). We are not financial advisers and do not provide financial product advice; where a matter needs legal or licensed financial advice we say so and refer it.
“We speak your language — traction, runway, and growth.”
We translate complex accounting into clear insights, so you always understand your position and your next move.
YOU MAY NEED TO KNOW
Frequently Asked Questions – Startup Accounting in Melbourne
When should a startup hire an accountant?
Ideally, before launching. An accountant helps structure the business correctly, register for GST if required, set up accounting systems, and ensure compliance from day one. Early structuring decisions impact tax efficiency, investor readiness, and scalability.
Do you work with pre-revenue startups?
Yes. Pre-revenue work is usually setup and structure, a compliant Xero file, the initial registrations, a cash flow forecast that shows runway, and where relevant an R&D or ESIC eligibility assessment before the first raise. The scope is smaller than for a trading business and is priced accordingly.
What is the best structure for a startup in Australia?
Most growth-focused startups operate through a company structure due to limited liability, investor suitability, and tax flexibility.
However, the optimal structure depends on funding plans, ownership strategy, and long-term exit goals.
Do startups need to register for GST?
For most businesses, GST registration is required once GST turnover reaches the $75,000 registration threshold ($150,000 for a non-profit body). Two tests apply: current GST turnover and projected GST turnover. A startup can therefore be required to register before it has actually invoiced $75,000, once turnover for the coming 12 months is projected to reach the threshold.
Registering below the threshold is optional. It lets you claim GST credits on business purchases, but it also creates BAS reporting obligations and affects how you price to customers who cannot claim the credit back. Relevant provisions: A New Tax System (Goods and Services Tax) Act 1999 ss 23-5, 23-15 and 188-10.
What tax concessions are available for startups?
Depending on the company, its activities and its turnover, a startup may be able to access:
- the R&D Tax Incentive
- Early Stage Innovation Company (ESIC) status, which benefits qualifying investors rather than the company
- small business tax concessions
- the instant asset write-off, where the current-year threshold and eligibility rules are met
- carry-forward tax losses, subject to the continuity of ownership or similar business tests
None of these is automatic. Each has its own eligibility conditions, and the thresholds change between income years, so the position needs to be tested against your own facts for the year in question.
What is the R&D Tax Incentive and does my startup qualify?
The R&D Tax Incentive gives eligible companies a tax offset for eligible research and development activities. For a company with aggregated turnover under $20 million, the refundable offset is the company's own tax rate plus 18.5 percentage points. Where that tax rate is 25%, the result is the 43.5% figure often quoted - it is not a universal startup rate, and refundability is subject to the rules in ITAA 1997 s 67-30. Companies at or above $20 million turnover receive a non-refundable offset at a premium above their tax rate.
Eligibility is assessed at activity level, not company level. A claim needs core R&D activities - experimental work whose outcome cannot be known in advance - supported by contemporaneous records, at least $20,000 of notional deductions for the year (with limited exceptions), and registration with AusIndustry within 10 months of the end of your income year. Many software projects do not meet the core activity test.
The Government announced changes to the programme in the 2026-27 Budget to apply from 1 July 2028. Those changes are not yet law and do not affect current-year claims. Relevant provisions: ITAA 1997 ss 355-25, 355-100 and 67-30.
See our guides to the 8 most common R&D claim areas in Australia and when software development doesn't qualify, or our R&D Tax Incentive service.
What is ESIC status and what does it mean for my startup?
Early Stage Innovation Company (ESIC) status is a test applied to your company at the time new shares are issued. Where the company qualifies, investors who acquire those newly issued shares may be entitled to concessions under ITAA 1997 Subdiv 360-A - a non-refundable carry-forward tax offset and modified capital gains tax treatment on the shares.
Our work is on the company side: assessing whether the company meets the early stage test and either the 100-point innovation test or the principles-based test (ITAA 1997 s 360-40), documenting that assessment before the raise, and preparing the evidence investors and their advisers ask to see. The company also has an ATO reporting obligation for shares issued to ESIC investors.
Whether a particular investor is entitled to the offset, and how much, depends on that investor's own circumstances, including whether they meet the sophisticated investor test. That is a question for the investor's own adviser. Nothing on this page is a recommendation to invest. We can coordinate an ESIC assessment alongside your R&D claim.
Can a startup change its business structure later?
Yes, but a restructure is a transaction with tax consequences - capital gains tax, stamp duty and, where employees hold equity, employee share scheme implications. Rollover and small business restructure relief may be available, but neither is automatic and both have conditions. It is materially cheaper to design the right structure at the start than to unwind one during a raise.
How can startups manage cash flow effectively?
Effective startup cash flow management includes:
- Monthly forecasting
- Burn rate tracking
- Expense control systems
- Revenue timing strategy
- Scenario modelling
Cash flow mismanagement is one of the leading causes of startup failure.
How do you calculate startup cash runway?
Runway is available cash divided by average monthly net cash outflow. For example, $180,000 of available cash against $30,000 of monthly net outflow gives six months. That calculation assumes spending and receipts stay steady. A forecast used for decisions should also allow for upcoming BAS and income tax payments, hiring, capital expenditure, restricted cash and funding that has not yet been received.