The financial complexities involved in starting a new business can feel overwhelming. Having a clear understanding of fundamental financial terms that are used during the startup phase is essential for making educated decisions and efficiently managing resources.

Basic Bookkeeping: Accurate records are the core of financial planning. It is essential for any startup looking to get funding from investors or lenders. This includes GAAP compliant financial statements (income, expenses) cash flow, the balance sheet.

Revenue & Costs: Monitoring and tracking operating expenses, revenues as well as other costs is a crucial part of financial startup basics. This process helps startups manage the acquisition of customers, customer turnover and revenue growth. It also helps them understand impact of customer pricing products, features of the product, and other factors on their bottom line.

Financing: Startups rely on personal loans and credit cards to finance their operations. This is a risky and expensive approach for startups, particularly if they fail to meet their repayment obligations. Alternative forms of financing for startups include business line of credit, equipment leasing, and crowdsourcing platforms.

Cash Flow: Startups have to be able to forecast their cash flow at any given time. This can be difficult for startups that pay 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. Streamlining the payment process and ensuring payments to vendors are received on time, and accurately recording equity ownership could aid startups in avoiding cash flow problems.