The financial complexities can be overwhelming when starting a business. Having a clear understanding of important financial terms for startups is essential for making educated decisions and efficiently managing resources.

Basic Bookkeeping: Accurate record-keeping is the foundation of financial management. It’s a must for any startup hoping to raise funds from lenders or investors. This includes GAAP compliant financial statements (income and expenses) cash flow, an account of balance.

Revenue & Costs – Tracking and monitoring operating expenses, revenue, as well as other expenses is a key element in the financial startup basics. This helps startups to manage customer acquisition, turnover and revenue growth. It also helps them understand effects of pricing of customers products, features of the product, and other factors on their bottom line.

Financing: Startups often depend on personal loans as well as credit cards to finance their operations. This can be costly and risky for startups, especially if the company fails to meet its obligations to repay. Alternative methods of financing for startups include business line of credit, equipment leasing, and crowdsourcing platforms.

Cash Flow: A startup must to be able forecast its cash position at any moment. This isn’t easy for startups that bill each year or in arrears, depending on usage. They aren’t able to provide a clear view of their financial standing over time. Startups can minimize cash flow issues by streamlining the process of payment and ensuring that vendor payments are processed in a timely manner and accurately recording ownership equity.

www.startuphand.org/2020/09/09/financial-startup-basics-by-board-room/