https://startuphand.org/2020/09/09/financial-startup-basics-by-board-room/
The financial complexities can be overwhelming when beginning your own business. Being aware of fundamental financial terms that are used during the startup phase is crucial for making informed decisions and effectively managing resources.
Basic Bookkeeping: Accurate records are the base of financial planning. It’s a must for any startup looking to raise funds from investors or lenders. This includes GAAP compliant financial statements (income, expenses) as well as cash flow and a balance sheet.
Revenue and Costs: Monitoring and tracking operating expenses, revenues, and other costs is an important part of financial startup fundamentals. This helps startups to manage the acquisition of customers, customer turnover and revenue growth. It helps them understand how customer pricing products, features, and other variables affect their bottom line.
Financing: Startups usually depend on personal loans as well as credit cards to fund their operations. This approach can be expensive and dangerous for startups, especially if the company fails to pay its repayment obligations. Alternative methods of financing for startups include business lines of credit equipment leases, business lines of credit, and crowdsourcing platforms.
Cash Flow: Startups need to know their cash flow at any given time. This isn’t easy for companies that bill annually or in arrears according to usage, but aren’t able to give a clear picture of their cash situation over a period of time. Startups can avoid cash flow issues by streamlining the payment process, making sure vendor payments are made in a timely manner and accurately recording ownership equity.