Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories...
Transcript of Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories...
![Page 1: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/1.jpg)
![Page 2: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/2.jpg)
KnowYourNumbersPresentedby:ShawndelSpaderSpaderGroup,LLC
![Page 3: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/3.jpg)
ImportanceofBookkeeping
• Bookkeepingisthelanguageofbusiness• Astandardsetofrulesmeasuringafirm’sfinancialhealth• Requiredforallactivitiesandorganizationswhichutilizemoney
• Assessingacompany’sfinancialstatusiscriticalformakingdecisions• Whatproducts/servicesaretopperformers• Whatexpensesarenecessary/unnecessary• Whatexpensescouldbenegotiatedforalowercost• Setstructuredfinancialgoalsbasedonwhathashappenedhistorically• Setarealisticbudgetbasedonactualincome/spending
![Page 4: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/4.jpg)
AccountingvsBookkeeping
Accounting:Referstothecomprehensiverecordingoffinancialtransactions,aswellasanalyzingandreportingthesetransactionstothetaxentities.
Bookkeeping:Referstotheday-to-dayactionsthatarenecessarytorecordthefinancialtransactionsforacompany.- Invoicing - AccountReconciliations- AccountsReceivables - MonthlyFinancialReporting- AccountsPayables - Budgeting
![Page 5: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/5.jpg)
CashvsAccrualAccounting
CashBasisAccounting• Recordingincomeandexpensesasyoureceiveorpaythecash.
AccrualBasisAccounting• Recordingtheincomeandexpenseswhenaccrued.Basedontransactiondateinsteadofdatepaid.
![Page 6: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/6.jpg)
WhatisaChartofAccounts?
• TypesofAccountsyou’llseeinyourChartofAccounts
- Assets - Liabilities - Equity- Income - CostofGoodsSold- Expenses/OverheadCosts
• AccountExamples
- IncomeCategories - Bank/CCAccounts - Loans- OwnersEquity - ExpenseCategories
![Page 7: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/7.jpg)
Assets
AssetsincludebothCurrentandLong-TermAssets
• CurrentAssets:• Cash,CheckingAccounts,AccountsReceivables,Inventory
• Long-TermAssets:• NotesReceivables,Tools,Equipment,Land,Buildings
![Page 8: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/8.jpg)
Liabilities
LiabilitiesincludebothShort-TermandLong-TermLiabilities
• Short-TermLiabilities:(Amountsthataredueinwithinoneyear)• AccountsPayable,PayrollTaxLiabilities,PortionofLong-TermDebtforthatyear
• Long-TermLiabilities:• Notes/BondsPayables,Loans
![Page 9: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/9.jpg)
Equity
• Equityaccountsrepresentwhathasbeenputinbytheowneraswellasnetearnings
• Owner’sEquityismadeupofbothOwner’sContributionsandOwner’sDraw
• Retainedearningsincludeswhatthecompanyhasearnedovertheyears
![Page 10: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/10.jpg)
IncomeandCostofGoodsSold
Income:• Listeachofthewaysyouearnincome
- AdministrativeServices - BookkeepingServices- PayrollServices - ITServices
CostofGoodsSold:• Purchasesthataredirectlyconnectedtoprovidingyourservice/product
- ProductPurchases - FreightIn/OutCosts- ShippingtoClients - SubcontractorLabor- ReferralFees - PurchaseDiscounts
![Page 11: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/11.jpg)
ExpensesandOverheadCosts
Expenses:• Variablepurchases
- Advertising - CharitableContributions - Dues&Subscriptions- Maintenance&Repairs - Meals&Entertainment - OfficeExpenses- TravelExpenses
OverheadCosts:• Fixedcoststhathappeneverymonthregardlessofyourincome
- Insurance - Mortgage/Rent- Phone - Utilities
![Page 12: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/12.jpg)
FinancialReports
• ThetwomostcommonlyusedreportstoassessabusinessesfinancialstatusaretheProfit&LossStatement(P&L)andtheBalanceSheet
• Profit&LossStatement• Summarizestherevenues,costsandexpensesincurredduringaspecificperiodoftime.Providesinformationregardingacompany’sability(ornot)togenerateprofit.Oftenreviewedmonthly,quarterly,andannually.
• BalanceSheet• Reflectsaspecificpointintimeanddisplaysthevalueofassets,liabilities,andequityofabusiness.Theaccountslistedinabalancesheetareconsidered“permanent”accounts
![Page 13: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/13.jpg)
FinancialReports– Profit&Loss
![Page 14: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/14.jpg)
FinancialReports– Profit&Losscont.
![Page 15: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/15.jpg)
FinancialReports– Profit&Losscont.
![Page 16: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/16.jpg)
10StepsforBookkeepingSuccess
1) Makebookkeepingapriorityandscheduleitintoyourweek/month(Non-Negotiable)2) Useanaccountingsystemfromtheverybeginning(QuickbooksOnlineRecommended)3) Stayorganizedwithasystemthateasilyworksforyou4) Simplifyyourchartofaccountsasmuchaspossible5) ALWAYS keepbusinessandpersonalexpensesseparate6) Reconcilebankandcreditcardstatementsmonthly7) Establishyourcashflowbyenteringinvoices/billsandpayingaccordingtotheduedate
• Negotiatewithyourvendorstoestablishfavorablepaymentterms
8) Digitizeyourrecords• Saveyourbank/creditcardstatementselectronicallywithallcorrespondingtransactions(Ex.MayBankStatement,savedwithall
receipts/depositsthatarelistedonthatstatementinonefolder)
9) Subcontractors– ObtainFormW9assoonastherelationshipisestablished.FormW9mustbeinhandbeforeanypaymentsaremade.
10) Whenyougettoapointthatyoucannolongermanageyourbooksefficiently,ASKFORHELP!
Asking for help is a sign of strength. Accepting help is a sign of growth.
![Page 17: Know Your Numbers...-Income Categories-Bank/CC Accounts-Loans-Owners Equity -Expense Categories Assets Assets include both Current and Long-Term Assets •Current Assets: •Cash,](https://reader034.fdocuments.in/reader034/viewer/2022050310/5f7251c8d5082c50b7537c2d/html5/thumbnails/17.jpg)