Erica Sporer The Accounting Equation – Every Business Has Assets No matter how small your business, no matter what industry your company is part of, your company has assets. From a computer used to prepare customer invoices to a 20,000-square-foot processing plant, every single thing your company owns is an asset, as long as you can assign … Read more
Setting Up a System – What to Keep, What to Toss Accounting is full of paperwork. To keep your office from being overrun, you need to know which papers you can safely toss, because there are some your company is required to hold on to for a pretty long time. The government, through various agencies, … Read more
Setting Up a System – Reconciling Your Accounts The best way to verify your account balances is to reconcile them with out- side (meaning outside that account) information. Reconciling accounts sim- ply means making sure they are in agreement with something else. Doing that assures the accuracy of your books, or lets you find and … Read more
Setting Up a System – The Everyday Transactions Most companies have the same types of day-to-day transactions, and almost all of these involve revenue and expense accounts. Each of these common transactions involves some kind of document, whether it’s an invoice, a receipt, a check stub, or some cash register tape. From these source documents, … Read more
Setting Up a System – Mapping Out Your Accounting Processes You can start to develop your regular accounting procedures by separating your tasks by expected frequency: daily, weekly, monthly, quarterly, or yearly. General accounting chores will fall into each category, but tax- related tasks typically come up no more than monthly. Every business will have … Read more
Setting Up a System – Software Makes It Simpler The easiest way to get your bookkeeping done is to have someone else do it. That’s not always practical (especially from a cash-flow perspective) and not always a good idea for someone trying to get a handle on his business finances. FACT Simply using a computer … Read more
Setting Up a System – Get (and Stay) Organized By now you have probably realized that accounting involves dozens of forms, hundreds of other pieces of paper, and thousands upon thousands of numbers. Keeping track of all of that information can be tricky. Having a system in place that tells you how to fill out … Read more
Keeping Track of Transactions – The Accounting Cycle You now know about the bulk of what goes into the accounting cycle (the process that starts with a transaction and ends with financial statements). In fact, the entire accounting cycle can be summed up in eight basic steps. Write up transactions in the daily journals. Post … Read more
Keeping Track of Transactions – Checking It Twice With all those numbers floating around, mistakes are inevitable. One way to catch mistakes (though this is by no means foolproof) is to prepare a report called a trial balance. A trial balance is basically a listing of every account and its balance, with debit balances on … Read more
Keeping Track of Transactions – It’s All in the Posting The journals are where all the daily bookkeeping activities take place. Peri- odically, that information is transferred to the ledger to update each account. That transfer is called posting, and it’s a critical part of the full accounting process. With computerized systems, the posting process … Read more
