Traditional companies can usually make financial projections with a certain accuracy. Startups, however, have no way to obtain such predictability, which makes it even more crucial to control their finances.

In other words: financial management in startups is one of the most critical areas – and any mistake can cost the company its survival.
Potential investors look at two pieces of information to know whether or not to invest in a startup: good financial control and the idea itself.

Financial problems include the difficulty in attracting investment and also the lack of a plan for the efficient use of resources. The Ultimate Startup Failure Report 2020, published by Failory: 90% of global startups fail, and the main reasons listed are default, incorrect pricing and wrong planning.

Regarding the idea, it is useless to balance the startup’s cash flow if the idea is not, in fact, innovative and replicable. Many companies fail in this aspect and cease to exist, precisely because they cannot solve a specific problem of people or other companies in an adequate way. That said, some of the main challenges that startups face are:

1. Following the cash flow, always being attentive so that expenses are never greater than revenue, especially at the beginning of the operation. If you have not yet created a company account for your startup, you can do it here.
2. Having a chart of accounts: containing all monthly due dates and receipts, reducing the possibility of taking loans or getting into debt.
3. For this point, it is fundamental to have expense management software which allows you to organise all your expenses in a single place, in order to control your company’s finances. Check out the advantages of Everest’s expense management service;

Cost accounting: as the market fluctuates, this is not easy. Measuring costs helps you balance finances and price products and services correctly.