On that note, Finsmart Accounting – one of the best-outsourced accounting services providers in India – decided to share an extensive guide on how accounting processes operate in the logistics sectors. Read on!

Understanding Accounting in Logistics

At its core, accounting in logistics involves tracking, analyzing, and managing financial transactions related to the movement and storage of goods throughout the supply chain. This includes everything from procurement and inventory management to transportation and distribution. Unlike traditional accounting, which primarily focuses on recording historical financial data, accounting in logistics is forward-looking and strategic, aiming to identify opportunities for cost savings and efficiency improvements.

Key Components of Accounting in Logistics

– Cost Management

One of the primary objectives of accounting in logistics is to control costs throughout the supply chain. This includes identifying cost drivers, analyzing cost structures, and implementing measures to reduce expenses without compromising quality or service levels.

– Budgeting and Forecasting

In a volatile and ever-changing market environment, accurate budgeting and forecasting are essential for planning and decision-making. Accounting in logistics involves creating detailed budgets and forecasts based on historical data, market trends, and business projections.

– Financial Reporting

Timely and accurate financial reporting is critical for monitoring performance, identifying trends, and making informed decisions. Accounting in logistics includes preparing financial statements, variance analysis, and key performance indicators (KPIs) to assess the financial health of the organization.

– Compliance and Regulation

The logistics industry is subject to various regulations and compliance requirements, both domestically and internationally. Accounting professionals in logistics must stay updated on relevant laws and regulations to ensure compliance and mitigate the risk of penalties or fines.

Logistics Accounting vs. Conventional Accounting

While accounting principles remain the same across industries, accounting in logistics presents several unique challenges and considerations:

– Complexity

The logistics industry operates on a global scale, involving multiple stakeholders, modes of transportation, and regulatory requirements. Accounting in logistics must account for this complexity, including cross-border transactions, currency fluctuations, and diverse tax regimes.

– Inventory Management

Unlike traditional businesses that may hold inventory for extended periods, logistics companies often deal with perishable goods or fast-moving inventory. Accounting in logistics must account for inventory turnover, obsolescence, and storage costs to accurately reflect the financial position of the organization.

– Transportation Costs

Transportation expenses are a significant component of logistics costs and can vary widely depending on factors such as distance, mode of transport, and fuel prices. Accounting in logistics involves tracking and analyzing transportation costs to optimize routing, mode selection, and carrier negotiations.

– Technology Integration

With the advent of digitalization and automation, logistics companies are increasingly adopting technology solutions such as transportation management systems (TMS) and warehouse management systems (WMS). Accounting in logistics requires integrating these technologies to streamline processes, improve data accuracy, and enhance decision-making capabilities.

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Expert Industry Tips for Effective Accounting in Logistics

– Invest in Technology

Leverage advanced accounting software and integrated ERP systems tailored to the needs of the logistics industry. These tools can automate routine tasks, improve data visibility, and enhance collaboration across departments.

– Monitor Key Performance Indicators (KPIs)

Identify and track key financial metrics such as cost per mile, on-time delivery rates, and inventory turnover. Regularly monitor KPIs to identify trends, evaluate performance against targets, and drive continuous improvement initiatives.

– Stay Updated on Regulations

Stay abreast of regulatory changes and compliance requirements relevant to the logistics industry, including customs regulations, trade agreements, and environmental standards. Partner with legal and compliance experts to ensure adherence to applicable laws and regulations.

Accounting for Logistics: Wrapup

Accounting in logistics is a multifaceted discipline that requires a deep understanding of financial principles, industry dynamics, and technological advancements. By adopting strategic approaches to cost management, and leveraging advanced technologies, logistics companies can effectively navigate the complexities of accounting in logistics and drive sustainable growth in an increasingly competitive market landscape.

Still got questions to ask? Send them at connect@finsmartaccounting.com and get a quick reply from accounting experts.

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In this comprehensive guide, Finsmart Accounting – one of the leading accounts outsourcing services providers in India – will explore the intricacies of incremental budgeting. Be it the fundamental principles, advantages, or the working process – we will look at everything briefly. 

First, let us understand the meaning of Incremental Budgeting in more detail.

Incremental Budgeting: What Does It Mean?

Incremental budgeting is a strategic financial planning approach in which the current budget is based on the previous period’s actuals. It’s a budgeting method that makes adjustments—the increments—to the previous year’s budget. This method acknowledges that not all expenses and revenues fluctuate significantly and aims to streamline the budgeting process. This budgeting method is commonly considered the most conservative approach.

If we make a comparison with the zero budgeting method, which starts from scratch each period, incremental budgeting relies on historical data. This provides a stable foundation for forecasting future financial needs. 

Key Components of Incremental Budgeting

Incremental budgeting involves several key components that collectively contribute to its effectiveness in financial planning.

Baseline Budget

The baseline budget is considered the starting point of incremental budgeting, which is the previous year’s budget or actual expenditures. This is the foundation upon which incremental adjustments are made.

Historical Data Analysis

Incremental budgeting heavily relies on the analysis of historical financial data. By efficiently examining past expenditures and revenues, businesses can identify trends, patterns, and areas that may require adjustments.

Fixed Costs

Fixed costs, commonly known as recurring expenses, remain relatively constant regardless of changes in production or sales volume. These costs, such as rent and salaries, are typically carried over from the previous budget with minimal adjustments.

Variable Costs

Variable costs fluctuate in direct proportion to the changes that are meant to be made in production or sales. Incremental budgeting accounts for these costs by adjusting them based on expected changes in business activities.

Performance Metrics

Monitoring and incorporating performance metrics are essential in incremental budgeting. Key performance indicators (KPIs) and financial ratios help assess the effectiveness of the budget and identify areas for improvement.

Strategic Goals Alignment

The incremental adjustments made in the budget should be made in a way that aligns with the organization’s strategic goals. This ensures that financial resources are directed toward activities that contribute to the overall success and growth of the business.

Advantages of Incremental Budgeting 

Incremental budgeting comes with several advantages that make it a widely adopted financial planning approach for businesses. Here are the key advantages you should consider while zeroing down on a budgeting model:

– Consistency and Stability

Incremental budgeting is based on past budgets and provides a stable and consistent financial framework. This consistency aims to build long-term financial planning and helps businesses maintain financial stability.

– Efficiency in Resource Allocation

By harnessing the power of historical data, incremental budgeting follows the path of efficient resource allocation. It identifies the areas of the business where resources can be optimally deployed, ensuring that departments have the necessary funds to meet their goals.

– Simplicity in Implementation

As compared to other budgeting methods, the incremental budgeting process makes it easy to implement. It streamlines the budgeting process and saves time and effort because it doesn’t require a complete re-evaluation of every line item in the budget, 

– Adaptability to Changes

Incremental budgeting is flexible. It facilitates the changes made in the business environment by allowing for adjustments based on evolving circumstances. This adaptability is crucial in dynamic industries where conditions may change rapidly.

– Historical Data Utilization

Leveraging historical data ensures that budget projections are grounded in reality. Past performance provides valuable insights into trends and sets as key elements to improve more, helping businesses make more accurate predictions about future expenses and revenues.

– Departmental Focus

Incremental budgeting allows for a focus on individual departments. This enables departments to have a budget that aligns with their specific needs and objectives, fostering accountability and responsibility at the departmental level.

– Reduced Disruptions

Since incremental budgeting only requires adjustments for changes rather than a complete overhaul, it reduces disruptions in day-to-day operations. This can lead to smoother budget implementation without causing major interruptions in business processes.

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Step-by-Step Guide to Incremental Budgeting

For businesses looking to adopt incremental budgeting, a step-by-step guide is essential. While the guide can be as comprehensive as possible, make sure that these points are included:

• Step 1: Evaluate Historical Data

The first step is to gather and analyze the historical financial data from previous budget periods. The data must include both expenses and revenues of every department within your organization.

• Step 2: Identify Key Drivers

The next step is to identify the factors that influence your organization’s expenses and revenues. These may include inflation rates, market trends, changes in consumer behavior, or industry-specific variables.

• Step 3: Determine Baseline Budget

Using the historical data and key drivers identified, establish an effective baseline budget for the upcoming period. This baseline budget is considered to be the starting point for incremental adjustments.

• Step 4: Adjust for Changes

Evaluate the changes or developments that may impact your organization’s financial outlook positively. This could include anticipated increases in costs, expansion into new markets, changes in regulations, or unexpected opportunities.

• Step 5: Allocate Resources

The resources are now to be allocated based on departmental or project-specific needs, keeping the baseline budget in mind. Ensure that each department has the necessary resources to achieve its goals while staying within the overall financial budget.

• Step 6: Monitor Performance

This is the most important step to follow in incremental budgeting. Regular monitoring and performance tracking against the incremental budget is super important. Use key performance indicators (KPIs) to assess the effectiveness of budget allocations and identify areas for improvement.

• Step 7: Communicate and Collaborate

Maintain open communication channels with stakeholders across the organization to ensure alignment and transparency in budgeting processes. 

• Step 9: Document it all

Make a document of all budget-related decisions, adjustments, and rationale to maintain clarity and accountability throughout the budgeting process. 

• Step 10: Recap and Improve

Continuously keep improving upon the incremental budgeting process based on lessons learned and feedback received. 

Incremental Budgeting Guide: Final Words

Organizations in India can effectively implement incremental budgeting as a strategic financial planning tool, enabling agility, adaptability, and informed decision-making in dynamic business environments. However, if you don’t have an accountant who has expertise seek help from outsourced partners who have experts in the field.

Get in touch with our team of outsourced accountants in India to establish an incremental accounting process. Still, have questions to ask? Send them to sales@finsmartaccounting.com  and get a quick reply from top accounting experts.

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In reality, both are distinct processes, each serving a unique purpose. Curious about the differences? In this blog, Finsmart Accounting will unravel the complexities of budgeting and accounting by highlighting the crucial differences that set them apart. 

We bet that by the end of this read, you’ll have a clear understanding of how budgeting and forecasting diverge. And most importantly, how you can harness their power effectively for your business’s financial success. 

Let’s begin! 

Budgeting and Forecasting: Meaning 

Before we delve into the key differences, it is important to understand what they exactly mean. Budgeting is a financial planning process that involves setting specific, assessable targets for income and expenses over a defined period. Typically annually, it serves as a detailed roadmap for allocating resources and controlling spending to achieve financial goals. 

Forecasting, as the name suggests, is a financial analysis technique that involves the use of historical accounting data, market research, and economic indicators to predict future financial outcomes for a company. It is valuable for long-term planning and risk assessment, rather than day-to-day operational control in budgeting. 

Budgeting vs Forecasting: Scope 

Budgets have a narrow scope. They usually involve specific line items for income and expenditures which often get broken down as spending by project or department within a business. This ballpark figure is important for controlling and managing day-to-day financial activities.   

Forecasts, on the other hand, have a broader scope. Why, you ask? Because they provide a high-level overview of financial trends, focusing on overall business revenue, cost, and profit projections. And that too without delving into individual line items or departmental details. 

This broader perspective helps businesses make strategic decisions and adapt to changing market conditions. 

Budgeting vs Forecasting: Time Horizon

Although it is obvious that both budgeting and forecasting are time-oriented financial practices, in this section we will delve deeper into their distinct time horizons. Budgets are meticulously crafted for a specific, fixed time period (say for a fiscal year or a quarter). 

They let accountants create a comprehensive financial plan with precise targets and guidelines for the duration of that period. Forecasting, in contrast, is not bound by a fixed time frame. From short-term forecasts covering the next few months to long-term projections stretching several years into the future, it can span over various time horizons. 

Benefit? Well, this flexibility allows businesses to adapt their financial strategies according to changing circumstances over different time scales. 

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1. Budgeting vs. Forecasting: Flexibility 

Budgets are known for their rigidity. Meaning, they are challenging to adjust without formal revision once set. This rigid structure is intentional as it helps businesses maintain a grip over their spending. It also ensures adherence to predetermined financial goals.  

The same can’t be said for forecasting in the accounting world. That’s because forecasts can be updated and revised regularly as new information comes in and circumstances change. Put simply, forecasting offers a greater degree of flexibility. 

This adaptability allows businesses to respond quickly to market shifts, emerging opportunities, or unexpected challenges without being bounded by preset targets. 

2. Budgeting vs. Forecasting: Use of Historical Data

Forecasting heavily relies on historical data. Put simply, one needs to analyze past performance to identify trends, patterns, and correlations that inform future projections. By examining historical financial data, businesses can make more precise predictions. They can even get an understanding of how past events may influence their future outcomes, enhancing the reliability of forecasts. 

Although businesses can also incorporate historical data for reference while budgeting, their primary focus is on establishing future financial targets and allocating resources accordingly. Historical data here will serve as a baseline. However, the main emphasis will be on shaping upcoming financial activities. 

3. Budgeting vs. Forecasting: Performance Measurement 

Performance measurement is a central aspect of budgeting. Put simply, budgets serve as benchmarks against which actual financial results are compared. Businesses can analyze variances between budgeted figures and actual outcomes to asses their performance, identify areas of success, and pinpoint where targets were exceeded or missed. 

This helps them in day-to-day financial control and accountability. Forecasting, however, is not designed for performance measurement. It’s obvious after all. They provide insights into future trends and potential outcomes. Forecasts help businesses make informed decisions and adapt to changing conditions rather than serving as tools for evaluating past finance-based actions. 

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4. Budgeting vs. Forecasting: Precision 

This guide will remain incomplete without discussing this key difference! Budgets are crafted with a high degree of precision by accountants for businesses. They involve detailed calculations and specific, quantifiable targets for income and expenses. Precision in budgets is important as it helps businesses plan in advance for upcoming expenditures and investments. 

Forecasts, on the contrary, forecasting lacks the same level of precision as budgets. That’s because they involve making assumptions about future trends and outcomes based on available data and analysis. And we all know – the future is unpredictable.  Forecasts are more suitable for long-term strategic planning and scenario analysis rather than minute operational control. 

Budgeting vs. Forecasting: Final Words

Although both financial practices serve distinct yet supportive roles, it is important to pick the practice your business needs. While budgeting will offer you precision and better control over everyday financial operations, forecasting will give you flexibility and strategic insights to navigate an ever-changing business landscape. 

Struggling to manage your financial tasks due to a hectic schedule? Think about outsourcing to Finsmart Accounting. With our team of skilled accounting professionals, you can confidently and efficiently navigate your financial goals.

Email us at sales@finsmartaccounting.com to discuss your accounting needs today! 

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The post Budgeting vs. Forecasting: Everything You Need to Know appeared first on Finsmart Accounting.

That’s why Finsmart Accounting – trusted globally for outsourced accounting services in India – will share top 11 methods of budgeting for effective financial planning and forecasting.

Let’s start with the most popular methods of budgeting for businesses!

Methods of Budgeting

Below are the top budgeting methods and techniques used by businesses and organizations for effective financial planning:

1. Incremental Budgeting

One of the most commonly used budgeting methods, incremental budgeting represents the simple technique of adding or deducting a percentage from the last year’s figures. This technique for budgeting is best for small businesses since it requires limited accounting knowhow and is rather easy to execute.

Incremental budgeting technique simply takes the expense list from the previous period (quarter or year) and make changes based on projections.  

2. Activity-Based Budgeting

Activity-based budgeting records and analyses all business activities that could cost money. Every business activity that costs money is analysed to find possible ways for reducing costs and increasing profitability. Complex in comparison to incremental budgeting, this budgeting technique helps organizations in checking expenses on unnecessary activities.

Activity-based budgeting is commonly used by companies active in construction, healthcare, and manufacturing industries to eliminate extra expenses.

3. Zero Based Budgeting

Zero-based budgeting was introduced by Peter Pyhrr in the 1960s. In this budgeting method, managers have to justify every expense without taking reference from the previous year’s numbers.

Zero-based budgeting technique is time-consuming as every expense is looked into without support from previous data. This budgeting technique helps in cutting down unnecessary costs and zero down on critical expenses only. 

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4. Value Proposition Budgeting

Also known as priority-based budgeting, value proposition budgeting technique is used by businesses to ensure that every expense included in the budget is delivering value to the business. This is done by going beyond the numbers and looking at the value added. 

This budgeting technique works best for businesses that are more conscious about their budget and want to cut unproductive expenses. However, it sometimes becomes hard for businesses to decide what is important. That’s because requirements and needs change over the passage of time.

5. Flexible Budgeting

Flexible budgeting is good for seasonal and young businesses that depend on worker availability and revenue inflow. This budgeting technique is deployed by businesses that face big highs and lows during the peak seasons. Businesses using flexible budgeting techniques have to adjust their income and outcome according to sales and staff.

Adjusting costs and making changes in the budget help business owners remain competitive and profitable in the long run. However, this budgeting type can be time draining. 

6. Envelope Budgeting

This budgeting method is perfect for very small businesses that operate with a small budget (mostly in triple digits) rather than a big one. Modern businesses create digital envelopes for managing cash for different aspects of the business. 

Envelope budgeting technique helps in saving the time spent on taxes as businesses already have a record of how much cash is spent on which aspect of the business. Pretty simple budgeting method if you ask us!

Other Popular Methods of Budgeting

Above are not the only budgeting methods though. Here are some popular budgeting methods and techniques used by individuals and micro businesses: 

1. Pay-yourself-first budgeting 
2. 50/30/20 budgeting 
3. 80/20 budgeting
4. 60% solutions budgeting 
5. No budget budgeting

We hope that the above insights helped you learn about the best budgeting methods for effective financial planning. It is best to choose a budgeting method based on your business needs, size, and goals. 

Not sure which budgeting method is right for you? Connect with budgeting experts, tax attorneys, or your accounting professionals like Finsmart to choose the right budgeting method. 

Share Your Thoughts

Want to learn more about methods of budgeting or discuss your business accounting goals? Email us at sales@finsmartaccounting.com to get a reply from our accounting and finance experts.

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In Part 1 of our fundraising for startups series, we shared a list of tips and ideas to raise funds for your startup. If you have already read it, you must be aware of the best fundraising options. 

Whether you want to raise funds from angel investors, government funding schemes, or startup contests, there are some steps you simply can’t skip. In this blog, Finsmart –  trusted for accounting outsourcing in India – will share what’s almost obligatory if you want to raise funds for your startup.

Raise funding for your startup

If you want to capitalize on fundraising opportunities, here are some noteworthy tips and ideas to keep in mind: 

#1 Get your books in order 

The initial years of a startup’s life are chaotic. While the absence of streamlined processes is critical to its quick growth, the same can pose a challenge when it comes to fundraising. And one of the biggest ones appears in the form of haphazard accounting. 

Turns out, an efficient accounting function is critical for successful fundraising. If your books are in order, your potential investors will be able to understand how well your startup can handle debt and expenses. Therefore, keep an eye on books to enable more organized and uninterrupted growth. Since accounting can be challenging and expensive, it makes sense to partner with an outsourced accounting service provider.  

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#2 Take care of financial modeling 

Getting your books in order isn’t enough. Investors will also ask to look at data and insights from financial modeling. For those who don’t know, financial modeling is the process of looking at company expenses and earnings to make future projections and critical business decisions. Financial modeling is supported by spreadsheets and a lot of data generated during accounting comes in handy while undertaking the same. 

Investor decks are rarely prepared without data from financial modeling. Therefore, make sure that projections derived from financial modeling are impressive. Without that, going ahead with fundraising can turn out to be a time drain. 

#3 Prepare Yourself 

Would you take an interview for a lucrative job without preparation? Of course not. The same is true for fundraising. Investors want to witness what you, as the founder, are capable of. They would be looking for answers to questions like: 

• Are you driven enough? 
• Do you understand your market deeply? 
• Do you have the capability to crunch numbers? 
• Do you have a long-term vision? 
• Do you have an ace team? 

While your accounting and finance team will get the numbers ready, you will need to prepare mentally. Therefore, prepare yourself and your idea before pitching it to the investors for raising funds. 

#4 Secure Key Introductions 

The secret to pitching success while raising funds for a startup is tapping the investors and sources that are likely to be interested. The chances of success are multiple if you can get an introduction from a trusted friend, partner, or senior executive. Cold calls and unbidden pitches rarely land a funding round. 

The more introductions you secure, the greater your chances of closing an investment round. Try to connect with investors with a history of funding startups like you. But before this, make sure you have proof of success. If you don’t have sales, traffic, engagement, leads, followers, subscribers, or pledges to show, the introduction will fall flat on its face. 

#5 Capture the Essentials 

Investors meet a lot of founders and entrepreneurs every month. Therefore, you need to make an impact within the first minute of your pitch. Explain your core idea and business plan in the first couple of minutes. Touch up on these as well: 

• Potential audience
• Target market
• Current market analysis 
• Business plan 
• Forecasts
• Financial milestones
• Expected returns
• Metrics and key performance touchstones

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#6 Follow up carefully 

You have met some investors and cards have been exchanged. However, this doesn’t mean you should be dropping a call the next day only. Give the investors some time to go through the deck and follow up with additional queries. 

In case the call or email doesn’t appear, reach out to your ‘connection’ in the investors’ office to get some info. While doing that, try to be discreet and keep reaching out to more investors. Funding success will come sooner this way.  

Funding  your startup in 2023 

Above are important tips and ideas to keep in mind while preparing for raising funds for a startup in 2023. Keep in mind that the road to fundraising success can be an exhausting one. There will be sharp rejections and roadblocks. Be patient and march on toward your vision. Use your meeting experience to improve the deck and pitch. Pivot if investors have solid reasons to not fund your startup. 

For more than a decade now, we have been helping startups get their accounting and financial numbers in order. While lending support of accounting, AR/AP, payroll, and business setup, Finsmart has supported hundreds of startup growth stories.   

Got any queries to ask? Send them to info@finsmartaccounting.com and have them answered by our experts. 

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The post Raising Funds for Startups: 6 Preparation Tips from Finance Experts (Part 2) appeared first on Finsmart Accounting.

According to CB Insights, 38% of startups fail because they either run out of cash or fail to raise funds. Funding is basically the fuel on which young startups thrive before hitting profitability goals. No wonder, a lot of startups, especially those for which we manage accounting and AR/AP, often ask how to raise funds.

In this blog, Finsmart Accounting – trusted for accounting outsourcing in India – will share a list of 5 useful tips and ideas with startups to raise capital. If you are struggling with finances for your dream venture, here are some noteworthy tips to keep in mind:

#1 Self-finance to get started

You might have heard the quote, “If you want a job done right, do it yourself.” Our first tip to raise funds for your startup is all about that! A recent study suggests that 77% of entrepreneurs, especially first-timers, self-fiance their businesses. And why wouldn’t they?

Young entrepreneurs often struggle with fundraising since they don’t have traction to show. Even if they have a solid plan in place, financing sources such as bankers, venture capitalists, and government bodies need proof of success to back the venture.

Raising funds on your own gives you complete control of your company and increases its equity. Finsmart recommends startups to self-finance by:

• Doing a thorough inventory of assets: For those who don’t know, asset inventory is a method using which accountants list and document assets owned by startups. By doing a thorough inventory of assets, businesses are able to identify valuable properties that can be used for raising funds for your startup.
• Investing from your savings: The easiest and most cost-effective way to raise money for kickstarting your startup business is to use your personal savings. According to experts, young entrepreneurs can raise startup capital by setting aside a portion of their income each month.

Running a business already but want to raise funds for another business? No worries. Accountants at Finsmart can help you save on taxes, manage cash flow, make correct forecasting, and stamp out mistakes in account books.  

• Seeking funds from friends and family: This one is a no-brainer. Your friends and family already know your strengths and circumstances. What’s even better, they are more likely to be flexible in repayment schedules and interest rates.

Note: Self-finance works well for micro startups only. It might not work well if you need a significant influx of funds to get your venture off the ground.

#2 Consider Crowdfunding 

We bet most of you are aware of crowdfunding. For those who aren’t, it’s a method of raising capital with contributions that come forth either in small or large amounts through a network of individuals. Earlier, this method was used by non-profit organizations for social causes, charities, disaster relief, and events but now it is a significant fundraising force for Indian startups.

Our experts believe that crowdfunding platforms can be great places to get that initial funding, especially if it is in the embryonic stage. All you need to do is to produce a compelling story about your business, product or service, and propose a momentous reward for donations.

Many startups have been able to raise tens of lakhs of rupees via crowdfunding campaigns. Platforms like TheHotStart, Indiegogo, GoFundMe, and Start51 are considered the best options for entrepreneurs to raise funds for their startups in India.

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#3 Find Angel Investors 

Not all angels have wings, some have a lot of ready. In the startup world, they are known as angel investors. These high net worth individuals have helped build now-established companies including Google, Yahoo, and Alibaba.

Finding angel investors in India is not that easy since they prefer to invest in ideas that display high-growth potential so that they can earn high returns. We suggest considering these tips to get in touch with investors for funding support:

• Create an amazing deck. Make sure the deck quickly helps them understand your startup and its approach to fulfilling an unmet need, room to scale, financials, competitive landscape, industry, and regulatory challenges, and confidence in the management team.
• Start your search for an angel investor in your local community. You can also call up established entrepreneurs in your network to become your angel.
• Take every opportunity to network. Join business and trade organizations and regularly attend meetings. Attend fairs and events. Show your face, speak about your startup, and meet as many people as possible.
• Use connection services available on the internet. Platforms like AngelList India, Ah! Ventures, Mumbai Angels Network, and Venture Catalysts can help you hook up with angel investors to raise funds for your startup.

#4 Apply for Loans under Government Schemes 

Angel investors aren’t the only ones funding startups in India. Central and state governments also have a lot of programs to fund promising startups in 2023. There are various loan schemes started by the Indian government that can be selected, as per the nature of the startup and requirements.

Not to mention, these schemes allow selecting tenure as per the convenience to repay the loan in easy installments. While managing accounting books and finances, our team makes ensures that paperwork is in order and the business credit score is solid. This helps in faster loan approvals and low-interest rates.

Here are some schemes by the government of India to raise funds for startups in 2023:

• Credit Guarantee Scheme (CGS)
• Pradhan Mantri Mudra Yojana (PMMY)
• Stand Up India Scheme
• Coir Udyami Yojana
• Bank Credit Facilitation
• Market Development Assistance (MDA)
• PSB Loans in 59 minutes

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#5 Raise Funds by Winning Contests

Everyone loves winning contests but winning a startup competition delivers a lot more. In addition to the opportunity to secure funding, participating in a startup contest will also help validate your startup idea.

Startup competitions ask participants either to create a product or prepare a business plan that stands out from the crowd and is comprehensive enough to convince anyone it is worth investing in.

The Next Startup Event by Fail Safe, Xartup Fellowship Mumbai, Enterprise Next, Microsoft Brizsparks, and Hindsight Ventures Accelerators are some popular startup contests for entrepreneurs to raise funds in India.

How to Prepare for Raising Funds for a Startup? 

We bet you have already determined which option is best to raise funds for your startup. If the answer is YES, then, congratulations! You have reached a major milestone in your fundraising journey. Now, it’s time to work on identifying and attracting fundraising opportunities by forming relationships and preparing a pitch that does justice to your financial needs.

Of course, this part is more complex than the first one. That’s why we will be covering this one separately in detail.

Follow Finsmart on Linkedin to get updates on the latest blogs and resources!

Raise funding for startups in India

While the above are useful tips and ideas to raise funds for your startup in 2023, it is completely fine to use your own cash and bootstrap a venture. It’s also important to have your books and financial health in order if you wish to keep raising funding. Therefore, don’t forget to partner with a seasoned accounting firm to manage your accounting work.

Got any queries to ask? Send them to info@finsmartaccounting.com and have them answered by our experts.

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The post Raising Funds for Startup: 5 Tips from Leading Finance Experts (Part 1) appeared first on Finsmart Accounting.