Now that you know some of the key terms, you need to put them to use! There are three basic documents that will help you answer critical questions about your business. Create the three must-have documents for financial success. What are accounts receivable? Accounts receivable refer to the money your customers owe you when you send them an invoice. To determine your profit, subtract your expenses from your revenue. What is revenue? Revenue is income your company makes on a sale. What is an asset? An asset is an item your business owns, like a printer. But actually, a liability is something you owe money on, such as a small-business loan. What is a liability? A lot of people confuse liability with expenses. What is an expense? Also called "money out," an expense is something you pay for, like supplies or rent. What is a sale? A sale is a transaction you receive cash for, also known as "money in."īusiness taxes can be confusing. Don’t be embarrassed if you aren’t familiar with all the technical definitions. Now it’s time to get up to speed on common bookkeeping and accounting terms. When you decided to start your business, you were just hoping to make more money than you put in. Know the basic bookkeeping and accounting lingo. Whether you’re just starting a small business or you’ve had one a few years, these easy tips will help you stay organized. No one article can tell you everything you need to know about business accounting, but we put together 10 tips to help keep it as simple as possible! 10 Tips to Small-Business Bookkeeping and Accounting Everything from paying your taxes to planning for the future rides on having accurate numbers. Unless you’re actually running an accounting or bookkeeping business, keeping the records for your business can seem overwhelming. Now add bookkeeper and accountant to that list! Sales leader, manager and customer service representative are just some of the hats you wear as a small-business owner.
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