Published 16 August 2026 · biosuite ApS
Early accounting decisions shape how a biotech company reports, from tracking total R&D spend and comparing actuals to budget to preparing board materials accurately. A simple and well-structured setup saves significant time later.
Keep the chart of accounts simple
Many startups overcomplicate their chart of accounts. Others make it too detailed in the wrong places.
Accounts should reflect what the company spends money on, not who spends it or which program it relates to. For example:
- External research and CRO services
- Laboratory supplies
- Salaries and payroll costs
- Facility and lab rent
- Professional fees
Avoid creating separate accounts for every department or target. That level of detail should sit elsewhere in the system.
A clean structure makes reporting easier, reduces coding errors, and improves budgeting accuracy.
Use dimensions for programs and departments
Biotech companies rarely operate with only one activity. Even early-stage teams often work across:
- General & Administrative (G&A)
- Research & Development (R&D)
- Multiple targets or programs
Instead of creating new accounts for each program, use dimensions such as:
- Department
- Program or project
- Location (if relevant)
This makes it possible to see:
- Total R&D spend
- Spend per target
- Total G&A cost
– without duplicating accounts.
It also prepares the company for a future ERP implementation. Scaling becomes significantly easier when the structure is clean from the beginning.
Define what belongs where
Consistency is more important than perfection.
Each account should have a short internal definition. For example:
- How different types of CRO work are classified
- What qualifies as lab consumables
Better inputs lead to better reporting.
How structure and dimensions work together in practice
Below is a simple example of a clean, activity-based chart of accounts supported by structured dimensions. The accounts remain stable, while departments and programs evolve as the organization grows.
| Account no. | Account name | Definition (internal use) | Example departments* | Example programs |
|---|---|---|---|---|
| 6100 | External research services | CRO, preclinical, analytical services | R&D | Target A, Target B |
| 6110 | Laboratory supplies | Consumables, reagents, small lab equipment | R&D | Target A, Target B |
| 6200 | Salaries and payroll costs | Gross salary, pension, payroll taxes | R&D, G&A | Target A, Target B, General |
| 6300 | Facility and lab rent | Office and lab space | R&D, G&A | General |
| 6400 | Professional fees | Legal, audit, consulting (non-scientific) | G&A | General |
* Department is typically hierarchical, with sub-levels such as Preclinical, Clinical Operations or CMC under R&D.
Plan for scale, not perfection
The goal in year one is not to build a public-company finance function. It is to create a structure that can evolve without being rebuilt.
A well-designed accounting setup should support current reporting needs, allow additional dimensions as programs expand, survive due diligence, and transition smoothly to a larger ERP when needed.
Rebuilding a chart of accounts during rapid growth or shortly before an audit is costly and disruptive. Investing thought into the structure early is far more efficient.
Align accounting with procurement
In biotech, procurement and accounting are closely connected. Purchases of CRO services, consultancy and lab services often need to be classified by department and program, not just by financial account. The same principles also apply when tracking CRO commitments, change orders and invoices across procurement and accounting.
The same principles should apply when purchase orders and invoices are registered, in line with the dimensions used in the accounting system.
In biosuite, purchase orders and their related invoices can be assigned a category (account), department and program.
This article is provided for general informational purposes only and does not constitute accounting, legal, or other professional advice. You should consult qualified advisors before taking action based on this information.