What do I Need to Know about Finance and Accounting for my Startup?

Knowing a number of basic finance and accounting concepts is essential to the success of your startup. At the bare minimum, you need to understand basic bookkeeping and preparation of financial statements, even if you are going to hire an accountant (recommended). You also need to understand the basics of finance and financial markets, as they impact the economy. Without this knowledge of finance and accounting you are running your startup blind.

So, as a bare minimum, you need to master a beginning accounting and business finance class at the college level. I would suggest a local community college.

You should also take a course in basic taxation, because you need to understand that.

To be effective in running a business, you need these skills:

(1)basic bookkeeping (2) setting up and monitoring internal controls (3) banking and credit including the way credit works, how to balance your checking account, managing cash (4) payroll, and payroll tax compliance (5) Sales, GST and VAT tax compliance (6) the basics of income tax (7) cost accounting, to the degree necessary to figure out what your product/service costs are, your overhead, and your margin under varying circumstances (8) how to read a financial statement, including analyzing it using ratios, horizontal and vertical analysis (9) basic operations of the economy, how this impacts demand, competition, etc (10) product pricing(how you price your products/services (11) forecasting and budgeting and, (12) how to construct, modify, and use a business plan.

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