Startup Accounting and Financial Forecasting

Startup Accounting and Financial ForecastingSimplifying and Getting It Right

1

David EhrenbergFounder and CEOEarly Growth Financial Services

2

“Startups face a huge burden in today’s economy, often having to choose between funneling resources toward creating their goods and services or managing the often complex accounting, tax and financial strategy planning necessary to run a successful business.”

~ David Ehrenberg, Founder and CEO Early Growth Financial Services

www.earlygrowthfinancialservices.com

Good accounting

Good understanding of the health and wellness of your business

Pre-Funding - Set up a low-cost, accrual-based accounting structure that can grow with you

• Open business banking account • Separate personal and business expenses• Keep records of receipts and invoices• Be mindful of tax obligations• Collect payments• Select payroll provider• Stay on top of stock records


Post-Funding – Financial strategy deepens and you’ll gain better understanding of your business

• Set foundation for future growth• Build financial infrastructure• Clarify funding objectives• Manage cash-flow• Create clean financials for investors• Hire professionals to help company become GAAP compliant

(Generally Accepted Accounting Principals)

www.earlygrowthfinancialservices.com 3

Accounts PayableFormalize your system for keeping track of business expenses

• Set up system early • Choose best tracking system for company needs• Helps maximize cash flow • Create essential financial reports• Enter every expense• Establish invoice AP schedule• Place vendors on net 30 payment terms• Build reputation of financial stability


Accounts ReceivableImprove cash collections

• List all open invoices and balances

• Create “friendly” invoices (and print hard copies)

• Put payment terms in writing for new clients

• Establish credit guidelines

• Create collection timeline


Taxes

• Select correct legal entity for company• Understand federal, state, and city tax obligations;

regional fees; and registrations• Separate business and personal finances• Deduct business expenses• Pay quarterly taxes• Stay on top of payroll taxes and 1099s



Financial Statements

Profit and Loss

10WWW.EARLYGROWTHFINANCIALSERVICES.COM

Cash Flow Statement


Balance Sheet



Financial Forecasts

Cash Burn Forecast

14www.earlygrowthfinancialservices.com

• Current Assets taken from balance sheet

• Average daily operating costs from income statement and cash flow statement.

Current Assets/Average daily operating costs = Burn Rate

Cash Burn Forecast


Top-Down Projection


Top Down Projection - Market Opportunity


Bottom-Up Financial Projection


Bottom-Up Projection


www.earlygrowthfinancialservices.com20

David Ehrenberg

415-234-3437

[email protected]


Follow us @EarlyGrowthFS

Startup Accounting and Financial Forecasting

Business

financial projection

financial infrastructure

financial statements

financial forecasts

cash flow statement

successful business

essential financial

track of business expenses