Table of Contents
Introduction to the Toolbox
As a business founder, it’s easy to get caught up in the excitement of building a new venture. However, as any successful entrepreneur will tell you, keeping track of your financials and taxes is crucial for the long-term success of your business.
If you’re a business owner, or aspiring entrepreneur, and want to make business decisions without having to rely on your finance team or CA for insights, we have exactly what you need!
Our toolkit consists of three essential parts that cover all aspects of financial management for your business: Accounting, Taxes and Finances.
Our accounting toolkit provides you with tools that will help you:
- Keep a close eye on your company’s financials
- Make informed decisions about your business’s future
Secondly, taxes are complicated – our Tax Tracker Toolkit will help unravel all that confusion for you!
Finally, our banking toolkit provides you with a comprehensive checklist of all the documents you need to open a current account.
Overall, our business toolkit is an indispensable resource for any business founder.
Let’s get started!
Accounting ratios are the best way to understand the financial performance of your business. Use this Ratio Analysis Toolkit to:
- Assess your company’s liquidity, solvency, profitability, and efficiency
- Compare your company’s financial performance to industry benchmarks and competitors
- Make informed decisions about their business strategy
- Forecast future financial performance and monitor the effectiveness of financial initiatives
In this toolkit you get:
✅ Meaning of the Ratio
✅ Why it is important to your business
✅ Ideal range you should aim for
✅ How to calculate the Ratio
✅ Tips on how to improve your performance
Revenue Growth Rate
|What is Revenue Growth Rate?||A measure of the rate of increase in a company’s total sales|
|Why is Revenue Growth Rate Important?||Indication of how much more revenue the business is bringing in vs the previous period|
|Bonus Tip!||Ideal Revenue Growth Rate = 10% to 25%|
|How to Improve Your Revenue Growth Rate||
|What is Profit Margin?||A measure of the percentage of each sale retained as profit.|
|Why is Profit Margin Ratio Important?||Helps in making decisions about how much to invest in the business, how much to pay employees, and how to price products or services|
|How to Improve Profit Margin?||
|What is Debt-to-Equity Ratio?||Measures the amount of debt a company has relative to its equity.|
|Why is Debt to Equity Ratio Important?||A high debt-to-equity ratio indicates that the business has taken on a significant amount of debt relative to its equity, which can increase the risk of default and financial distress.|
|How to Improve Debt to Equity Ratio||
|What is Current Ratio?||Measures a company’s liquidity|
|Why is Current Ratio Important?||A high current ratio indicates that the company has enough current assets to cover its short-term liabilities, which can increase investor confidence and make it easier for the company to secure financing.|
|How to Improve Current Ratio?||
|What is Burn Rate?||The rate at which a company is spending its cash reserves|
|Why is Burn Rate Important?||It helps startups estimate how long they can continue operating before running out of cash.|
|Bonus Tip!||Investors look for startups to have a burn rate that allows operations for at least 12-18 months before needing additional funding|
|How to Improve Return on Assets Ratio?||
Financial Statements Explained
Being able to read and understand the 3 main financial statements of your business as a founder is like having a superpower.
If you don’t have this superpower, fear not – with this toolkit in your arsenal, you’ll be super in no time!
By understanding these statements, founders will be able to make informed decisions about:
- When to invest in new products or services
- When to cut costs
- When to seek additional funding
Below are 3 templates: the P&L Account, Balance Sheet and the Cash Flow Statement.
We’ve explained each line item in each template, so keep these templates handy for the next time your CA presents you with your business’s financials.
Profit & Loss Account / Income Statement
Why is it important for a founder to know about the income statement?
- It provides a summary of a company’s revenue and expenses over a specific period.
- Determine the profitability of your business and identify areas where you may need to reduce expenses or increase revenue.
- Compare the financial performance of different periods
- Make informed decisions about the future direction of your business
Why is it important to know how the Balance Sheet works?
- It provides a snapshot of your business’s financial health at a specific point in time
- Determine the liquidity and solvency of your business
- Make informed decisions about managing your assets and liabilities
- Track changes in your business’s financial position over time
- Monitor the effectiveness of your financial strategies
Here is how your Balance Sheet works, explained for each line item.
*Only shows up on the balance sheet in case of a merger or acquisition
Cash Flow Statement
Why is a Cash Flow Statement important to you?
- Track the movement of cash in and out of your business over a specific period
- Identify the sources and uses of cash in their business and manage your cash more effectively
- Make informed decisions about investments, financing, and other strategic initiatives
- Predict future cash flows
Here is how the final financial statement works!
Tax Tracker Toolkit
Tax laws are complicated. Even with a million reminders on your phone and a CA telling you what to do, it is easy to lose track of all the deadlines!
And the worst part? Missing a deadline becomes quite a costly mistake. Here is a downloadable checklist for you – with all the most important deadlines for the coming Financial Year 2023-24.
Knowing when to pay taxes is only half the battle. The rest of it is knowing how much to pay!
This downloadable Tax Tracker Toolkit has all you need to manage your taxes for this coming financial year.
✅ Tax Tracker Calendar
✅ GST Rate Chart for FY 2023-24
✅ Income Tax Slabs for FY 2023-24
✅ TDS Rate Chart for FY 2023-24
As a founder, you need to have a deep understanding of your company’s finances to make informed decisions, allocate resources effectively, and drive growth.
Without proper financial management, even the most promising startups can quickly run into financial difficulties and ultimately fail.
Having the right financial support is what makes or breaks your business’s finances – effective financial relationships can help founders manage cash flow, optimize working capital, and finance business operations.
Here’s a checklist of the financial support that founders need:
- Credit facilities
- Vendor payments
- Integrations with Accounting Software
- Multi-user experience
- Tax Payments
- Maker Checker Account
- Corporate Credit Card
- Instant Beneficiary Addition
- Mobile App Facility
- Insights into financial performance
- Support and Prompt Issue Resolution
- On-the-go approval mechanism
- Payment Gateway
While this may seem like a very long list, each item is important for the smooth running of a business’s finances.
If you’re wondering where you might be able to find all these features in one place, look no further. RazorpayX saves you time, effort and resources by making business banking as smooth as ever.