Accounting is the language of business. For anyone in a managerial or ownership role, it’s important that basic small business accounting principles are understood. The people making important business decisions must understand how to evaluate and discuss business financial information with an accountant in order to guide the company into the future.
Business Accounting ServicesWe offer a full range of business accounting services and other financial management services:
- Bank reconciliations
- Generation of monthly operating statements
- Accounts payable and accounts receivable
- Sales and income tax preparation
- Bookkeeping clean up
Accounting Tips From The CPAAccounting is the word used to describe the methodical process for recording values for expenses, revenues, assets, accounts receivable and accounts payable. Documenting financial activity and categorizing it to generate financial statements is the main purpose of business accountants.Income statements, cash flow statements and balance sheets are the three main financial statements used to determine a business’s health at any point in time.Lenders, government officials and business executives use these statements routinely to evaluate business health and determine taxes owed.Before an executive can analyze important numbers, he must first understand the definitions of the terms used.Fortunately, a person can quickly learn the definitions necessary to have an intelligent conversation about financial matters.Below are some accounting terms that should be learned by every professional in a decision-making role in a company:
- Accounts receivable figures reflect the debt owed to the company as the result of extending credit to customers.
- Assets represent the things owned by a company such as equipment, offices and stock to name a few.
- Liabilities represent everything that is owed to others.
- An invoice is a bill showing transaction details that are often sent to customers that owe the company money for products or services sold.
- Accounts payable figures represent the amount a company owes.
- Receipts are a written record of a specific sales transaction.
- Equity represents the difference between assets and liabilities. This gap defines how much of the company is owned by stockholders, partners or a sole proprietor.