Bookkeeping 101: Basic Terms & Tips You Need to Know
When you're running a business, whether big or small, you must know what is going on in every department. As a business owner, you need to understand how each part of your company works—be it with your marketing team, your inventory management, or even your salesforce process. This goes the same way when you deal with your business’ accounting facet.
Business Accounting and You
Accounting can be a tricky topic for some people, which is why it’s always best to hire professional accounting and bookkeeping services to help you with it.
Bookkeeping is the recording part of Accounting. All your receipts and transactions have to be recorded and compiled for your accounting team to create detailed reports. During this part of the process, you are most likely to be questioned about specific transactions, so it is best to be able to back up your information with the valid documentation
Here are some bookkeeping terms and tips you need to know for smoother bookkeeping sessions:
These are the payments you need to collect from customers and clients that have yet to be received. Account receivables are a significant factor to keep track of in order to avoid confusion and missed payments.
Keeping track of your inventory is vital for your whole business. It affects sales and most especially, your account. Products that are added and removed from the shelves need to be recorded immediately to keep your business on top and moving forward.
Account payables are your company's payments to clients, suppliers, and alike. Keeping track of your bills and debts will help prevent double transactions and other mishaps from happening.
When your company has been receiving an increase in sales, you need to keep an eye on your cash flow. It is best to work with a reputable bookkeeping service that will help you keep track of your company's standing.
It is essential to know how much your company spends on purchasing goods and services to help build your business and products. It would be best if you had this on record to understand your "Cost of Goods Sold.” With this, you can know how much profit you're earning when bumped against your production and sales costs.
These are a few of some standard bookkeeping terms you need to know so you and your accountant can communicate efficiently.
Bookkeeping Tips to Boost Your Business’ Efficiency
On the other hand, for a smoother accounting and bookkeeping system, here are a few tips you need to know:
Always organise your records
It's safe to say that being organised and disciplined about keeping your accounts and receipts can help you have smoother account record keeping. By being organised, you'll be able to prevent numerous accounting problems that could cause delays in your business and transactions.
Don't forget your deadlines
Keep track of your deadlines on your taxes, account payables, purchases, and any payments you need to settle. Skipping deadlines may cause further delay in your business' progress and may confuse your accounts and clients.
Keep track of your daily records
Keeping track of your daily expenses and receivables is the best way to be able to stay on top of things in your business. It is your responsibility to see that everything is in order and that the movement of your company's money is recorded. Keeping track of your inventory—knowing what product is low and out of stock is vital information for your daily records.
Staying on top of things and being responsible for your company's transactions and receivables will help your bookkeeping services record all the accounting data your company needs. Accounting is essential for any business because the information gathered here will help you make sound decisions for your company.
New Wave Accounting handles small business accounting in Australia. We offer expert accounting and bookkeeping services to our clients from different industries. Talk to one of our account specialists today!