Digital Ventures Accelerator Batch 0 or DVAb0 is entering its 5th month. This project involved selected startups who joined courses to enhance skills necessary for their business. These courses featured specialists from different sectors, some as regular mentors while some attended as exclusive speakers.
Aside from the knowledge and insights from the experts, Startup DVAb0 also organize the DVAb0 Knowledge Sharing. These sessions are where they exchange ideas between teams. Each team possesses distinctive know-hows, skills, and experiences, therefore, sharing them ignites new thoughts which may prove beneficial to others. In this occasion, PeerPower shared their takeaways from the book Entrepreneurial Finance by Harvard Business School (H.B.S) professor, Steven Roger regarding “Finance Management in Startups”
Get to know the financial situation.
Entrepreneurs need plans that will help them adapt to new situations or uphold their financial condition. Failing to do this means inefficient preparation for auditor visits.
“Financial discipline is a habit.”
Entrepreneurs must be financially organized ex. have a checklist, know when to acquire outsource assistance on issues they cannot handle, use efficient tools, have an income-expenditure account and pay taxes.
Tech-startups shall not fail when it comes to financial statements, especially with cash flows.
Financial statements consist of the following 4 main items.
Balance Sheet is often highlighted by entrepreneurs. This sheet is disclosed by PLC of larger enterprises. The balance sheet requires very detailed process and consumes time. It is in the final stage of the financial statement.
Income Statement is in the first accessible touchpoint. In this process, pay extra attention to the accrual.
Statement of Changes in Owner’s Equity shows the changes to the owner’s equity. This section is still not common among startups.
Statement of Cash Flow is favorable for executives or managers as it clearly states the complete details of the cash and relates to tax calculation. For instance, in cases of accrual, if the revenue is recorded with the absence of a cash transaction, it shall not yet be in the statement of cash flow. This is because taxes are calculated from this amount and tax return issues will become a problem if cash cannot be collected.
Visit us again soon for more financial stories from PeerPower.
PeerPower is a Thai fintech startup focusing on Peer-to-Peer Lending.