Commercial Finance
Commercial finance is focused on forward-looking activities that support your growth strategy.
Jobs to be Done
- Investment research
- Fraud detection and anti-money laundering
- Customer-facing process automation
- Personalized assistants/chatbots
- Personalized portfolio analysis
- Exposure Modelling
- Portfolio Valuation
- Risk Modelling
Records
The three main financial statements:
- Income Statement: shows a company's revenues and expenses over a specific period, indicating profitability.
- Balance Sheet: provides a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and equity.
- Cash Flow Statement: details a company's cash inflows and outflows over a specific period, indicating liquidity.
Operating cash flow indicates whether a company can generate sufficient positive cash flow to engineer a stronger platform to expand into new opportunities.
Key financial ratios to monitor include the Gross Profit Margin (measures profitability relative to costs), Current Ratio (indicates liquidity), and Return on Investment (ROI, indicates return generated from investments).
Regular review of these financial statements and ratios enables business owners and managers to identify areas of strong performance and those needing improvement, allowing for more informed decisions about budgeting, resource allocation, and investments. Overall, effective financial reporting provides valuable insights into a business's financial health, aiding in decision-making for future growth and sustainability
Commercial vs Compliance
For key financial workflows see table of commercial vs compliance activities.
| Business Procedure | Commercial Focus | Compliance Focus |
|---|---|---|
| Budgeting and Forecasting | Preparing budgets, forecasting revenues and expenses | Ensuring budgeting and forecasting processes comply with accounting standards |
| Financial Reporting | Preparing internal financial reports for management decision-making | Preparing financial statements in compliance with accounting standards for external stakeholders |
| Financial Analysis | Analyzing financial performance and identifying trends | Ensuring accounting systems and records are accurate and complete |
| Strategic Planning | Participating in strategic planning and decision-making | Providing input on compliance issues related to strategic plans |
| Capital Structure Management | Managing the company's debt and equity mix, investment decisions | Ensuring capital structure decisions comply with relevant laws and regulations |
| Risk Management | Identifying and managing financial risks | Implementing internal controls to mitigate financial and compliance risks |
| Transactional Activities | Managing cash flow, receivables, payables | Ensuring transactions are recorded accurately and timely, in compliance with accounting standards |
Accounting compliance is more about ensuring the company meets its obligations under accounting standards and regulations.
Startup Guide
- Personal Finance 101
- Equity 101
- How to Incorporate Your Startup
- A Quick Introduction to QSBS
- Raising Venture Capital: Strategy
- Raising Venture Capital: Mechanics
- How to Pay Yourself and Your Team
- Overview of Startup Finance
- Treasury Management
- Payroll, People and Taxes
- Selling Secondary Shares
- Stacking QSBS and Charitable Contributions
- Deep Dive on Trusts
- Selling Your Company
- Investing In Your Startup from your Retirement Account
- Recommend Software and Service Providers