https://startuphand.org/2020/09/09/financial-startup-basics-by-board-room/
The financial complexities can be overwhelming when launching an enterprise. Understanding the key terms used in startup finance will allow you to make informed decisions and effectively manage your resources.
Basic Bookkeeping: Accurate records form the core of financial planning. It is a necessity for any startup looking to get funding from lenders or investors. This includes GAAP certified financial statements (income and expenses) as well as cash flow and an account of balance.
Revenue & Costs – Monitoring and tracking revenue, operational expenses, as well as other expenses is an essential element of the financial startup fundamentals. This process assists startup founders control customer acquisition, churn, and revenue growth. It helps them understand how price of their customers, product features and other variables affect their bottom line.
Financing: Startups depend on credit cards and personal loans to fund their operations. This is a risky and expensive approach for startups, particularly if they fail to meet the repayment obligations. Alternative methods of financing for startups include business lines of credit, equipment leasing, and crowdsourcing platforms.
Cash Flow: Startups need to be able to predict their cash flow at any given time. This is a problem for startups who bill annually or in arrears in accordance with the usage. They aren’t able to provide a precise image of their financial position over time. The process of payment can be streamlined and ensuring that vendor payments are made on time, and accurately recording ownership of equity can help startups avoid cash flow issues.