5 BOOKKEEPINGBASICSEvery small business owners must know.

BOOKKEEPING 101:

Most business owners got skills on theselling aspect of the business but

lack basic knowledge in bookkeeping.

A REQUIREMENTFOR SMALLBUSINESS

The business may have an in housebookkeeper but when the owner himself isunable to understand the finances all will

be futile.

NO KNOWLEDGEMEANS NOPROGRESS

Perhaps engaging on study sessions tofully understand books might be helpful.

But before enrolling, here are 5 of thecommon bookkeeping account typesrelevant to small business owners.

A CRASHCOURSE OF THE

BASICS

CASHIn the cash account, all businesstransactions were passed.

In order to keep up, bookkeepers use twojournals:

CASH RECEIPTS

CASH DISBURSEMENT

CASHRECEIPTSJOURNALA journal that let you keep track ofreceived cash by creating a record.

C

A

S

H

CASH RECEIPTSJOURNAL C

A

S

HINCOME and DEBTORS - major categories

SUNDRY - various miscellaneous (sample:

capital or loan cash received)

BANK - used to show total cash from specific

period.

DISBURSEMENTA journal kept by accountants to record

financial expenditures of the company.

Function as 'checkbook ledger'

C

A

S

H

CASH

ACCOUNTSRECEIVABLESThis is more applicable to companies that sellsproducts or services.

Tracking of receivables is critical due to itnot being collected immediately.

OUTSOURCED ACCOUNTING

For an assured timely sent bills or invoices,perhaps engaging on an

would be beneficial.

ACCOUNTSPAYABLEThe money owed to creditors.

Handling of your bookkeeping well willassure you of unmissed payments.

TIP: Paying your bills early couldlead to discounts.

OWNERS'EQUITYKeeps track of amount put by each owner inthe business.

The books must contain all owners' equityaccounts to avoid biased order.

RETAINEDEARNINGSCumulative earnings that shows the moneyretained since the company started.

Keeping track of this account will show ifthe business was a success or a failure overtime.

FORMULA:

Retained Earnings (RE)= Beginning RE + Net Income - Dividends

BENEFITS OF KEEPINGTRACK OR YOUR RETAINED

EARNINGS:

The earnings could be invested to areas ofthe company to create growth opportunities.

SAMPLE:

Addition of newmachinery.

Allot money on researchand development.

THANKYOU!