Small business accounting is possibly among the most troublesome challenges that business owners perceive. This is because accounting for a small business isn't their forte. For many small business owners, they move into a startup since they're good at providing a specific service. Be this a catering company, contracting company or being a wedding planner.
Introduction to Small Business Accounting.
image source: google
To succeed at small business bookkeeping one doesn't have to be a magician. Being organized in keeping track of your cash flow is the key to good accounting for a small company.
Superior accounting for a business also means that you're tackling the financing of your company well. Since funds for the startup is taken from loans or from renting equipment and other resources, you can make certain to formulate a good plan to cover your own expenses.
Small business accounting is also significant due to the tax implications. As the business owner, it is your obligation to file taxes correctly to prevent getting any penalties.
At the end of the day, accounting simply means maintaining the documents clean for your organization. You take in all of what you've earned and then subtract your expenses, what you have left is the earnings.
Image illustrating business accounting
Below is a simple overview of some company accounting terms:
Revenues or earnings:
1. Payment for services rendered – labor, consultation fees and Such
2. Payment for goods sold – goods, materials, etc..
1. Leasing expenses – leasing price you pay for equipment, etc..
2. Cost of goods sold – everything you paid for your stock
3. Office supplies – necessary items for your workplace.