What a back office is, and who does what

A company's front office sells: product, marketing, the people a customer talks to. The back office is everything that makes the selling count. It keeps the record of what happened, pays what the company owes, collects what it's owed, runs payroll, files with the government and keeps the cash honest. Nobody buys from a startup because of its back office, and plenty of startups have lost a round, a bank account or a key hire because theirs was a mess.

Founders rarely do all of it themselves, and they shouldn't. But the people they hire for it have different jobs, and the titles get used loosely. A bookkeeper isn't a CPA, a fractional CFO isn't either, and a payroll provider isn't the employer.

The payroll rows are where founders most often get it wrong. A payroll provider files with your number, on your behalf, and the IRS is explicit about who answers when it fails.

Our payroll provider handles the taxes, so a missed deposit is their problem.

The provider deposits from Northwind's account under Northwind's EIN. Northwind checks each quarter that the deposits landed.

Northwind Traders, Inc. was incorporated on September 1, 2026 by two founders. That's this course's company. It buys tools and resells them, and its first month is the book every track works from. Its back office is what most two-founder companies end up with: the founders approve and sign, a bookkeeper closes each month, a payroll provider runs pay, and a CPA prepares the year-end return. With two people you can still split the work so that one approves a payment and the other releases it. That's segregation of dutiesControlsSegregation of dutiesSplitting authorization, recording, custody of assets and reconciliation across different people, so no one person can both commit and conceal an error or fraud — at minimum, preparer ≠ approver at its smallest, and investors will ask about it later.

The rest of Core walks the map in the order a founder meets it: the company's numbersBack office core · Lesson 2 of 9The entity and its numbersHow do I get an EIN, and what registrations does a new startup need?The EIN is free and issued online in one sitting. The state brings a registered agent, an annual report and registrations wherever the company does business.8 min, its moneyBack office core · Lesson 3 of 9Company money, kept apartWhy does a startup need a separate business bank account?Company money lives in company accounts. Mixing it breaks the books, weakens the tax return and puts the liability shield at risk.8 min, its booksBack office core · Lesson 4 of 9The books, in one lessonWhat kind of accounting does a startup need: cash or accrual?Startup books are accrual books, closed every month. Profit, operating cash and the bank balance are three different numbers, and the books show all three.8 min, its peopleBack office core · Lesson 5 of 9People: employees and contractorsShould my first hire be an employee or a contractor, and what forms do I need?Who controls the work decides employee or contractor. An employee gives a W-4 and an I-9 and goes through payroll; a contractor gives a W-9 and invoices.10 min, its bills and invoicesBack office core · Lesson 6 of 9Money in and money outWhat are accounts payable and accounts receivable, and how does a startup run them?Invoices become receivables and bills become payables. Each is a list that ties to the books, and the cash settles them later.8 min, its calendarBack office core · Lesson 7 of 9The founder's annual calendarWhat are a startup's tax and filing deadlines in its first year?The founder's year, worked out on Northwind: payroll deposits and 941s, the January forms, Delaware's March 1, and the corporate return.9 min and its recordsBack office core · Lesson 8 of 9Keeping the recordsHow long should a business keep its records and receipts?Records are kept until the period they support can no longer be examined: three years in general, at least four for employment tax, longer for assets.7 min. The choice between a payroll provider and a PEO, worked on Northwind's own payroll, is its own Payroll lessonPayroll · Lesson 8 of 8Payroll providers, PEOs and paying foundersShould a startup use a payroll provider or a PEO, and how do founders get paid?A provider works under your EIN and leaves you liable; a certified PEO is treated as the employer for the wages it pays. Founders who work in a corporation and take pay are on payroll.9 min.