A lot of business owners, as well as startup capitalists, are creating examples in the world through their awesome working teams, the creation of unmatched products and winning the trust of their customers. But, many of them are still falling behind when it comes to bookkeeping. Being an expert in digital marketing is never enough to succeed if you do not have a crystal clear image of your company’s finances.
Following are some of the basics of bookkeeping that every business owner must understand:
If your company is selling out your product but is unable to receive the payment for it that money will be termed as receivable and you must keep track of all such receivables to avoid corruption in your investment. This is the amount of money that is due from your customers, but it is advised to keep this payment updated to ensure that you are sending apt invoices and bills.
All the transactions and transfers of your business have to go through a cash account. This aspect of bookkeeping is so important that most expert bookkeepers like Xero bookkeeping services sunshine coast generally utilize two different journals, i.e. one for cash recipients and another one for cash expenditure.
All the products that your company is manufacturing and has in stock are just like deskbound money. Therefore, it is essential to stay accounted for those products and keep a proper tracking mechanism for them. The amount of these products written in your books should always be a counterpart when physical counting is done.
This account keeps track of all the money you have loaned from the investors. If you have borrowed money from people to fulfill the vehicle, furniture and equipment demands of your company, be sure to keep a check on this account as well.
For any kind of business, payroll expense is the highest cost of them all. Keeping this account updated and maintained is very substantial if you want to meet your payment delaines, taxes and other government-related requests.
This account is set up to keep track of investment that every owner has out into the business. If a business is small and owned by one person, then this term is not included in their bookkeeping since there is no stock sharing to divide the possession.