AI Startup Accounting,
From GPU Bill to Gross Margin
Your biggest costs are compute and researchers, your margin depends on how inference is booked, and Section 174A decides how fast you can deduct your research. Vecty - itself an AI company - keeps AI-native books: compute split between COGS and R&D, credits captured, and CPAs signing the judgment calls.
A back office that understands compute-heavy books
The full stack from bookkeeping to filed returns, tuned to how AI companies spend.
Compute costs, correctly split
AWS, GCP, and model API bills are separated into inference serving customers (COGS) and training or experimentation (R&D) - the split that makes your gross margin a real number.
R&D credit on payroll and compute
Research payroll and qualifying compute costs are identified from your actual data and filed toward up to $500,000 per year in payroll tax offsets, with CPA review.
Section 174A handled
R&D expensing and amortization treatment is tracked under current law and reflected in your returns and estimates, so a rule change doesn't ambush a pre-revenue company.
Burn, runway, and margins live
Real-time dashboards show burn, runway, and gross margin the way your investors will compute them - because the underlying categorization already matches.
AI startup books hinge on a few big calls
Low transaction volume, high dollar concentration - the opposite of what generic bookkeeping is tuned for.
Your gross margin is an accounting decision
Whether inference compute sits in COGS or opex can move an AI company's gross margin by ten points or more. Investors know it, and they re-derive the number in diligence. Books that make the honest split from day one are a credibility asset.
The R&D credit is unusually big for AI companies
When most of your payroll is researchers and much of your compute is experimentation, the qualifying base is a large share of your entire burn. Leaving it unfiled is leaving six figures of payroll tax on the table.
Section 174A matters most for exactly your cost structure
Domestic R&D is deductible again, but foreign research is still capitalized, so a company spending everything on development can still show taxable income. The rules have shifted repeatedly, and the treatment interacts with the R&D credit. This is CPA territory, and it needs to see your real books.
Milestone-based revenue needs careful booking
Enterprise pilots, usage-based pricing, and annual prepays each recognize differently. Booking them as cash arrives distorts both revenue and deferred revenue - the two lines your next round's diligence reads first.
Up and running in hours, not weeks
Connect your stack
Banks, cloud billing, payroll, Stripe, and expense tools link in one session. Existing books get migrated and cleaned up.
The platform runs your books
Daily categorization with compute split rules, monthly close, and the compliance calendar run automatically.
CPAs sign the judgment calls
Licensed CPAs review the COGS/R&D split, the Section 174A position, and every return - including the R&D credit.
AI startup accounting questions, answered
What AI founders ask us most before switching.
Both, depending on use - and the split matters. Compute that serves customers (inference behind your product) is COGS and defines your gross margin; compute spent training and experimenting is R&D. One AWS or OpenAI bill usually contains both. Vecty splits them so your margin is real and your R&D credit captures everything it should.
Compute and cloud costs used in qualified research - training runs, fine-tuning experiments, evaluation - can qualify as supply costs, alongside the engineering payroll doing the work. Eligible startups can apply up to $500,000 per year against payroll taxes. Vecty identifies qualifying costs from your actual vendor and payroll data and files the credit with CPA review.
US software development costs were subject to capitalization and amortization rules under Section 174 from 2022 to 2024, which created taxable income even for money-losing startups. Section 174A now lets domestic research costs be deducted in the year paid, while foreign research is still amortized over 15 years. For an AI company where most spend is R&D, this is the single biggest tax issue to get right. Vecty tracks the treatment under current law and has CPAs sign the position.
The transaction count is low but the stakes per line are high: a single miscategorized cloud bill can swing gross margin by points, misstate your R&D credit, and change your Section 174A position. AI startup books are less about volume and more about getting a few big judgment calls consistently right.
They look hard at gross margin - specifically whether inference costs are honestly in COGS - plus burn, runway, and how fast compute spend scales with revenue. Books that already show a clean COGS/R&D split answer the question before it is asked.
Stop managing your books. Let Vecty manage them for you.
Bookkeeping, taxes, compliance, and optimization - handled end-to-end. Talk to us and see the system in action.