Bookkeeping Basics Every Small Business Owner Should Know

By February 5, 2018 No Comments

Millions of small business owners are leaders at creating great products and services, building excellent teams and winning over customers. Many of them, however, would probably flunk basic bookkeeping Gold Coast.

But if the business owner doesn’t understand the different types of “accounts” your bookkeeper who does your bookkeeping Gold Coast uses to organised your finances, measuring the success or failure your efforts will be futile.

  1. Cash book record

The payments that have been in and out of your bank account. Keep it up-to-date, and after several months, you’ll be able to use it as a tool rather than just a historical record.

  1. Sales Account and Sales Invoice Record

If you use an accounting package, you can use them to issue and store invoices. If you do them manually using Word, keep a record of a file. Store invoices in chronological order. Keep those who haven’t yet been paid at the front of the data to help your credit control. The Sales Account is where your records are being tracked of all incoming revenue from what you sell. Recording sales account in a convenient and accurate method are critical to know where your business stands.

  1. Purchase Invoice File

Get used to making notes on invoices about when you paid them and how. File them in chronological order. This will make your life easier and keep your accountants’ bill down. The Purchases Account is where business owner tracks any raw materials or finished goods that you buy for your business.

  1. Obtain Simple Accounting Software That Will help you in All of Your Business Needs

This is among the most critical and crucial bookkeeping tips for small business owners. This is because it gives you an opportunity to access your financial status anytime. Most of these accounting software programs are easy to use or somewhat easy to learn. They are also very multitasking with the ability to work out all your expenses as well as income of the business.

  1.  The Accounts Receivable and Retained Earnings

If bookkeeping gold coast, for example, sells products or services and doesn’t collect payment instantly, you have receivables, and you must follow Accounts Receivable. This is money due from customers, and keeping it up to date is critical to be sure that you send timely and accurate bills or invoices. The Retained Earnings account help tracks any of your company’s profits that are reinvested in the business and are not paid out to the owners. Managing this account doesn’t take a lot of time and is vital to investors and lenders who want to track how well the company has done over time.

  1. Inventory Recording

The current products you have in stock to sell are like money sitting on a shelf and must be accurately accounted for and tracked. The numbers you have in your books should be systematically tested by doing physical counts of record on hand.

  1. Accounts Payable

None of the business owners likes to send money out of business.  But it’s little less painful if you have a clear view of everything via your Accounts Payable.  Proper bookkeeping helps assure timely payments and – importantly – that you don’t pay anyone twice.  Paying bills early can also qualify your business for discounts.

  1. Loans Payable

If you’ve borrowed money to buy equipment, vehicles, furniture or other items for your business, this is the account that tracks what’s owed and what’s due.

  1. Payroll Expenses

This is the most significant cost of all for many businesses. No matter how much you beg, few people want to work for nothing.  Avoiding those responsibilities will put you in dangerously hot water.

  1. Owners’ Equity

The Owner’s Equity tracks the amount each owner puts into the business. Money is being put into the market to follow in Capital accounts, and any money taken out appears in Drawing reports. To be fair to all business owners, your books must carefully record all Owners’ Equity accounts.

Several business owners assume Bookkeeping Gold Coast  as a daily chore. But if you understand and make efficient use of the data your bookkeeper collects, accounting can also be your best buddy, helping you run your business more efficiently. If you have any concern and suggestions regarding this article, you can drop your messages in the comment box!

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