The financial complexities involved in the beginning of a new venture can feel overwhelming. Understanding key startup financial terms can help you make educated decisions and manage resources effectively.

Basic Bookkeeping: Accurate record-keeping is the basis of financial management. It is a necessity for any startup hoping to get funding from lenders or investors. This includes GAAP-compliant financial statements (income and expenses) as well as cash flow, the balance sheet, and financial projections.

Revenue & Costs: Tracking and monitoring the amount of revenue, operational expenses and other expenses is a key aspect of financial startup basics. This process helps startups manage customer acquisition, customer turnover, and revenue growth. It helps them understand the impact of customer pricing as well as product features and other factors on their bottom line.

Financing: Startups often depend on personal loans and credit cards to fund their operations. This approach can be expensive and risky for new businesses, especially in the event that the business fails to meet its obligations to repay. Alternative methods of financing for startups include business lines of credit, equipment leasing and crowdsourcing platforms.

Cash Flow: A startup has to be able to forecast its cash position at any time. This can be a challenge for startups that bill annually or in arrears according to the usage. They are not able to provide a clear image of their financial position over time. Streamlining the payment process and ensuring payments to vendors are received on time, and accurately recording ownership of equity can help startups avoid cash flow problems.

https://startuphand.org/2023/04/30/the-different-stages-of-funding-in-venture-capital/