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For start-up Businesses

Keeping Track of The Money

• Accounts Receivable (A/R)

• Account Payables (A/P)

• Accruals

• Accrual Basis Accounting

• Assets

• Bad Debt Expense

• Balance Sheet

• Capital

• Cash Basis Accounting

• Depreciation

• Dividends

• Equity

• Expenses

• Fiscal Year

• Forecasting

• General Ledger

• Journal

• Liabilities

• Profit and Loss Statement (P&L)

• Revenue

• Trial Balance

What is bookkeeping and

accounting?• Bookkeeping is the

recording of financial transactions, and is part of the process of accounting in business.

• Accounting is the system that tracks financial activity and generates reports (financial statements)

• Tracks Assets, Liabilities, Equity, Income & Expenses

Basic Bookkeeping and Accounting Procedures

Deposit Cash or Checks when received

Keep Copies of documents and file receipts

Invoice Customers Timely

Make timely Collection Calls (Accounts Receivable)

Track and pay vendors and bills on time

Record transactions into Accounting System daily

Process Payroll and Pay Payroll Taxes Timely

Prepare a Budget (forecast your Cash Flow)

Reconcile your bank statements monthly

Generate & Analyze Financial Statements

Complete year-end reporting (W-2 and 1099-Misc)

Financial Statements

• Income statement—A summary of the revenue and expenses for a specific period of time.

• Balance sheet—A list of the assets, liabilities, and stockholders’ equity as of a specific date.

• Statement of cash flows—A summary of the cash receipts and disbursements for a specific period of time.

Balance sheet - statement of a firm’s financial

position—what it owns and the claims against its

assets—at a particular point in time.

Photograph of firm’s assets together with its liabilities

and owner’s equity

Income Statement - financial record of a company’s

revenues and expenses, and profits over a period of

time.

Firm’s financial performance in terms of revenues,

expenses, and profits over a given time period.

Reports profit or loss.

Statement of cash flows - a firm’s cash receipts and

cash payments that presents information on its

sources and uses of cash.

Ratio analysis - tool for measuring a firm’s liquidity, profitability,

and reliance on debt financing, as well as the effectiveness of

management’s resource utilization.

Acid-test (or quick)

ratio measures the

ability of a firm to meet

its debt payments on

short notice.

Cash and equivalents

+ short-term investments

+ accounts receivable

Total current liabilities

Current ratio compares

current assets to current

liabilities.

Total current assets

Total current liabilities

Inventory turnover

ratio indicates the

number of times

merchandise moves

through a business.

Net sales

Average of inventory

Total asset turnover ratio

indicates how much in

sales each dollar invested

in assets generates.

Net sales

Average of total assets

Profitability ratios measure the organization’s overall financial

performance by evaluating its ability to generate revenues in excess of

operating costs and other expenses.

• Leverage ratios measure the extent to which a firm relies on

debt financing.

• Total liabilities to total assets ratio > 50 percent indicates that a

firm is relying more on borrowed money than owners’ equity.

• QuickBooks

• Sage Peachtree

• NolaPro

• LessAccounting

• Net Suite Financials

An Excel Spreadsheet is NOT an Accounting System!

• User Friendly

• Cost Effective

• Flexible to meet your

needs

• Features

• Reporting

Customization

• Secure

• Web-Based

• Integrated