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All about Business Accounting
Management of business finances does not have to be a burden on your professional life. It doesn’t have to distract you from the causeses that you started the company. The basics of business accounting boil down to three reports, your balance sheet, income statement and cash flow statement. Although these may sound like they would require professional bookkeeping, the truth is that they are not.
This accounting checklist will help you streamline your tax preparation and show you the best timeframe for each accounting function You may be the proud owner or manager of a startup, or you are just starting your 10th year.
Business Accounting is the collection and analysis of financial information about business activity, recording transactions and producing financial statements.
Accounting is essential for many reasons. You can keep track of all your assets, liabilities and inventory to help you attract investors and protect your assets against theft. Accounting for small businesses includes bookkeeping, tax returns preparation and filing, as well as financial reporting.
To ensure smooth business operations, you need to be familiar with basic accounting concepts. Although you might be an expert in marketing or sales, it is important to understand the basics of accounting. It can be difficult to grow your business without a clear financial picture. Here are some important accounting terms and principles to help you get started. Take a look at our articles on accounting terms and principles for a deeper understanding.
Accounts due are money you owe creditors or vendors. These are listed under liabilities as they are legally required to pay.
Customers owe money for goods and services purchased. This is sometimes listed as a creditable asset since they are legally required to pay.
Accrual Basis Accounting allows businesses to recognize revenue and expenses at the point of sale.
Assetsare any assets your company has that have value. These include bank accounts, accounts receivables, inventory, furniture and equipment.
Balance Sheet A financial document that shows a snapshot of the financial position of your company at the end a particular period. It contains your company’s assets, liabilities and shareholder equity.
Cash basis accounting allows businesses to recognize a sale once a payment has been received.
Double-entry Bookkeeping This is where accountants enter two transactions for each transaction. Two corresponding sides must be equal. One side lists debits, the other credit.
Liabilitiesare any debt or financial obligation to a business, including accounts payable, income taxes and loans.
Profit and Loss Statement also known as the Income Statement, reports earnings, expenses and net profits for a specified period.
Small business accounting
Accounting is essential to running a business. Once you have mastered the basics of business accounting, you can begin to keep track of your company’s financial information. Accounting for small businesses involves recording all income and expenses generated by your company. This information is used to forecast, create invoices, file taxes, prepare payroll and make tax filings.
QuickBooks’ business accounting software is easy to use and intuitive. Our business accounting software makes running your business easy, from managing taxes to creating financial reports. Below are the duties that you will need to perform for your business.
Daily business accounting tasks
You have a lot to do when it comes down to your daily accounting business requirements. There are many financial statements you need to review each week, month, and quarter. However, your daily accounting business responsibilities only one task.
Weekly accounting tasks
The weekly accounting tasks can be a bit more complex. These tasks include invoicing, financial management, and other fun business bank account activities. A great accounting system is a must-have for this purpose.
View unpaid bills from vendors
Every business should keep a “unpaid vendor” folder. You should keep a detailed record of all vendors, including billing dates, due amounts, and payment due dates. You might want to consider taking advantage of vendors who offer discounts for early payments.
Sign checks and pay vendors
To avoid disgruntled associates and late fees, track your accounts payable. You can extend the payment date to net 60 or net90 if you are able. To make tax time easier, you can either make online payments or mail a check. Keep copies of all invoices that were sent and received by accounting software.
Create and send invoices
Include payment terms. Invoices are usually due within 30 business days. This is indicated as “Net 30” at bottom of invoice. Forecasting monthly revenue will be more difficult if there is no due date. Learn how to get paid faster with our guide to getting your invoices paid on-time.
Review or process payroll to approve tax payments
You may have a set schedule for paying your employees, usually semi-monthly, but you must also meet the payroll tax requirements. These are based on federal, state and local laws. Make sure you withhold, report and deposit any applicable income tax, Social Security and Medicare taxes to the appropriate agencies at the required times.
To avoid any errors in the next payroll period, make sure you review the payroll summary before payment is made. This can be done by a payroll service provider to save time and ensure accuracy at a fair price. To calculate how much you should withhold from each paycheck, you can use our free calculator.