Know The Basic Bookkeeping And Accounting Lingo There are some important small business bookkeeping services terms you must know about. A sale is a transaction you receive cash for, it is the money in. Expense is the money out, it is something you pay for, like rent or supplies. A liability is something you owe money on, such as a small business loan. Asset is the item your business own, like a printer. Revenue is the income your company makes on a sale. To determine your profit, subtract the expense from the revenue. Accounts receivable refer to the money your customers owe when you send them an invoice. These are the important accounting lingo you should know about.
Save Important Bookkeeping Records It is smart to keep the types of documents such as payroll and inventory management for tax and other business purposes. A good rule of thumb to help you avoid getting caught without important document is, if you are in doubt, just scan and save it. You may never know when you need in small business accounting services to show the document. Now, some of these important documents include bank statements. Credit card statements, cancelled checks, receipts, bills, customer invoices, customer payments, sales receipts, etc. Making digital copies of bookkeeping records and storing them in designated, protected files make these accessible.
Separate Business And Personal Expenses One of the most important and often most difficult rules to follow when running a small business is keeping the business and personal expenses separate. That line is blurry when you first start out, so set up a separate bank account for business right off the bat. If you keep both the accounts separate this would only help you manage the finances and keep you sorted. All business owners prefer and need to maintain two separate accounts for personal and business expenses.
Track Every Business Expense Since you will have a separate business account, use it to track every expense with receipts and a dedicated business debit card. This many seem simple, but it is important to keep up with activity for tax purposes and profit monitoring. It is better not to combine personal and businesses expenses at all. Having separate small business accounting services helps you in several ways.
Keep Accounting Statements Up-to-date Sending an invoice is not the same thing as money in your hand. That is why accurate cash flow statements are important. Depending on the customers, products, payment system, you may be waiting on accounts receivable longer than you would like. Without the payment from the customer, you may not have the cash you need to cover bills and other expenses. Keep an eye on payments coming in and check the invoice that have not been paid. You need to send out past due notices. Avail small business bookkeeping services can surely help in this matter.
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