Are you a small business owner who is looking for some help getting your accounting under control? If so, you’re in luck! In this article, we will walk you through the basics of small business accounting.
The first thing you need to understand is that there are two main types of accounting: cash flow accounting and accrual accounting. Cash flow accounting is simpler than accrual accounting, and is best suited for businesses that are just starting out or that have a very low volume of transactions. Accrual accounting is more complex, but it provides a more accurate picture of a company’s financial health. Most small businesses should use accrual accounting.
The second thing you need to understand is the difference between assets and liabilities. Assets are things that a company owns, such as cash, inventory, and equipment. Liabilities are amounts that a company owes, such as loans and accounts payable. It’s important to keep track of both assets and liabilities, as they can tell you a lot about your company’s financial health.
One of the most important things to remember when doing small business accounting is to keep accurate records. This means recording every transaction in a journal and posting the appropriate entries to the general ledger. It may seem like a lot of work in the beginning, but it will be worth it in the long run.
If you’re feeling overwhelmed by all of this information, don’t worry! There are plenty of resources available to help you get started. Our firm can help you with everything tax and accounting related. Our process is pretty simple: you contact us , we listen to you, we research your situation, and we provide you with some of the best outcomes for your particular case