A business should have a grasp of how the accounting department works. To let you prepare, here are 5 basic bookkeeping ideas needed to be known.

1. 5 BOOKKEEPING
BASICS
Every small business owners must know.
BOOKKEEPING 101:

2. Most business owners got skills on the
selling aspect of the business but
lack basic knowledge in bookkeeping.
A REQUIREMENT
FOR SMALL
BUSINESS

3. The business may have an in house
bookkeeper but when the owner himself is
unable to understand the finances all will
be futile.
NO KNOWLEDGE
MEANS NO
PROGRESS

4. Perhaps engaging on study sessions to
fully understand books might be helpful.
But before enrolling, here are 5 of the
common bookkeeping account types
relevant to small business owners.
A CRASH
COURSE OF THE
BASICS

5. CASH
In the cash account, all business
transactions were passed.
In order to keep up, bookkeepers use two
journals:
CASH RECEIPTS
CASH DISBURSEMENT

6. CASH
RECEIPTS
JOURNAL
A journal that let you keep track of
received cash by creating a record.
C
A
S
H

7. CASH RECEIPTS
JOURNAL C
A
S
H
INCOME and DEBTORS - major categories
SUNDRY - various miscellaneous (sample:
capital or loan cash received)
BANK - used to show total cash from specific
period.

8. DISBURSEMENT
A journal kept by accountants to record
financial expenditures of the company.
Function as 'checkbook ledger'
C
A
S
H
CASH

9. ACCOUNTS
RECEIVABLES
This is more applicable to companies that sells
products or services.
Tracking of receivables is critical due to it
not being collected immediately.
OUTSOURCED ACCOUNTING
For an assured timely sent bills or invoices,
perhaps engaging on an
would be beneficial.

10. ACCOUNTS
PAYABLE
The money owed to creditors.
Handling of your bookkeeping well will
assure you of unmissed payments.
TIP: Paying your bills early could
lead to discounts.

11. OWNERS'
EQUITY
Keeps track of amount put by each owner in
the business.
The books must contain all owners' equity
accounts to avoid biased order.

12. RETAINED
EARNINGS
Cumulative earnings that shows the money
retained since the company started.
Keeping track of this account will show if
the business was a success or a failure over
time.
FORMULA:
Retained Earnings (RE)
= Beginning RE + Net Income - Dividends

13. BENEFITS OF KEEPING
TRACK OR YOUR RETAINED
EARNINGS:
The earnings could be invested to areas of
the company to create growth opportunities.
SAMPLE:
Addition of new
machinery.
Allot money on research
and development.

14. THANK
YOU!