Statistics show that over 50% of all businesses fail after few years in the United States due to lack of financial management.
This is really not a surprise to us because most business owners are neither CPA nor accountants. So this is the language every business owner must learn.If you don't understand, it would be hard to run a business in a win-win situation.
But we are on the mission to change that.
If you’re an entrepreneur or already have a business up and running and want to improve the bookkeeping of your business, then this post is for you!
Bookkeeping is essential for the business to maintain from the first day to the last day. It gives you a clear financial picture of your business. As a business owner, you need to be able to understand your finances and how much money is flowing through in and out of your organization. You can make better business decisions if you understand the state of finances. It will open a new path for your business to explore more opportunities.
Here at Ozark Accountants, we supervise the books for small business owners every day and have flawless considerations that help small businesses make better financial decisions that lead to greater profitability. If you’re new to managing your finances, then consider the following bookkeeping basics in your mind :
The first basic to consider is a cash account, which every bookkeeper often uses. This ledger shows how much cash your business holds. The business owner should check the cash account closely to understand the financial position of the business.
Account payable includes the money you owe to your vendors. It helps you to keep the track of payments that need to be done.
Account Receivable includes the money your clients owe. You must track Accounts Receivable and keep it up to date so that you send timely and accurate bills or invoices.
Inventory Account :
Inventory is the stock stored by the business owner and needs to be tracked & manage in a separate column. There are many different ways used by businesses to account for inventory, with first in first out (FIFO) and last in first out (LIFO) being the ones most widely used.
If you have borrowed the money from your business, then it falls into a loan payable account. This account tracks the payment & due dates.
Sales Account helps you to keep the track of the incoming revenue earned by selling products. Keeping track of sales in a timely and accurate manner is critical to knowing where your business stands.
Payroll Account :
Managing the payroll is a vital task which is carried out by the bookkeeper. Business owners must work towards making this process efficient and precise.
As your business grows, you’ll see the signs it’s time to hire a bookkeeper.
And If you find that you lack sufficient time or expertise to do your own bookkeeping, consider Ozark Accountant bookkeeping for your small business needs.