Small Business Accounting 101

The Business Skills Needed For Success

Small Business Accounting 101 - Do you understand the terminology and processes involved in maintaining your businesses financial statements?

Small Business Accounting 101

As a small business owner, it’s important to understand how accounting activities tie into your everyday operations.

Keeping track of your profits and expenses will indicate how well your business is doing and what you need to do to improve.

Even if you are able to hire a bookkeeper or accountant to handle your finances, it’s good to have the basics of small business accounting down to oversee what is being done. 

Small Business Accounting 101 - Book

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Small Business Accounting 101: The Financial Intelligence Needed For Success

Small Business Accounting 101 - Preview

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Small Business Accounting 101 - B/S

The balance sheet (B/S) shows all the liabilities, assets and net worth of the company that provides a snapshot of what is owed and what is owned.

If you have investors or are seeking a loan, you most likely will need to produce a balance sheet to show them why you and your company are worth their investment.

Read More About Accounting 101 The Balance Sheet

Small Business Accounting 101 - COA

Learn how to set up a chart of accounts in QuickBooks. QuickBooks accounting software is one of the most user friendly, forgiving accounting software programs available.

It is especially so when setting up the accounting chart of accounts. QuickBooks makes it easy.

Read More About Accounting Chart Of Accounts

Small Business Accounting 101 - Liabilities

Long-term liability is a claim on the assets of a business and it has a major impact on the financial health of an organization over time.  

This is especially true if the long-term liability for a company is poorly recorded and poorly managed.  

Here we will show you how important these debts are for determining and preserving financial stability.

Read More About Accounting 101 Long-Term Liability

Small Business Accounting 101 - P&L

This is also known as an income statement, and shows what your company has brought in and paid out. It also displays what your income has been over a certain period of time.

With the profit and loss statement, you will know whether or not your company is making or losing money - an important part of understanding accounting and bookkeeping principles.

You can determine which processes, services or products you need to enhance, and which ones you need to get rid of.

Read More About Accounting 101 The Income Statement

Small Business Accounting 101 - Terms

Small Business Accounting

Assets

Assets are what you own or what is owed to you. This includes equipment, buildings, furniture and outstanding invoices (accounts receivable).

Liabilities

Liabilities are what you owe and other debts. This includes invoices you need to pay (accounts payable), payroll and taxes.

Net Worth

This is your assets minus your liabilities and is also known as your company’s equity.

Read More About Accounting 101 Financial Terms

Small Business Accounting - Summary

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These financial activities are crucial elements of any small business and should be prepared on a monthly or regular basis through professional bookkeeping services, the expertise of an accountant, or the diligent efforts of the business owner. It is essential to review these financial records to assess the company's standing and make informed decisions accordingly.

Consider investing in a reliable financial accounting program that can generate these essential documents promptly and effortlessly. Such a program not only streamlines the process but also assists in designing and preparing invoices and estimates. Moreover, it consolidates all financial records and information into one centralized location, facilitating better recordkeeping and organization.

While the principles of small business accounting are not overly complicated, they require due diligence and the implementation of sound reporting procedures. Once you overcome the initial hurdle and familiarize yourself with the learning curve, keeping up with these accounting and bookkeeping basics will become second nature.

In case you need assistance, there are classes available that provide comprehensive instruction in business accounting 101. Alternatively, you can rely on outsourced bookkeeping services or your accountant to guide you through the fundamentals. Remember, the financial health of your company relies on your commitment to maintaining accurate and up-to-date records.

By prioritizing sound financial practices and investing in the necessary resources, you set your small business up for success. Consistent attention to accounting and bookkeeping ensures that you have a clear understanding of your company's financial standing, enabling you to make informed decisions, identify areas for improvement, and foster long-term growth. Embrace the importance of these practices and commit to maintaining a strong financial foundation for your business.

If you would like more help with anything, please feel free to contact me.

More Small Business Accounting 101

• Accounting 101 The Balance Sheet
• Accounting 101 Chart Of Accounts
• Accounting 101 Financial Terms
• Accounting 101 The Income Statement
• Accounting 101 Long-Term Liability
• Small Business Accounting 101

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