The financial complexities associated with the beginning of a new venture can feel overwhelming. Being aware of crucial financial terms used in the beginning is essential to making informed decisions and managing resources effectively.

Basic Bookkeeping: Accurate recording is the basis of financial management. It is a necessity for any startup that wants to obtain funding from investors or lenders. This includes GAAP certified financial statements (income, expenses), cash flow and a balance sheet.

Revenue and Costs: Tracking and monitoring the amount of revenue, operational expenses as well as other costs is an important part of financial startup foundations. This helps startups manage customer acquisition, turnover and revenue growth. It helps them understand how pricing for customers, product features and other factors affect their bottom line.

Financing: Startups rely on personal loans and credit cards to finance their business. This option can be costly and dangerous for startups, especially in the event that the business fails to meet repayment obligations. Alternative funding options for startups include business credit lines leasing equipment, equipment, and crowdsourcing platforms.

Cash Flow: A startup needs to be able forecast its cash position at any time. This can be a challenge for startups who bill annually or in arrears according to the usage. They aren’t able to give an accurate image of their financial position over time. Making payments more efficient, ensuring vendor payments are completed on time and accurately recording equity ownership can help startups avoid cash flow problems.

www.startuphand.org/2020/05/08/financial-startup-basics-for-business-owners/