Business Accounting is the direct involvement of the transferring of funds in and out of your business. In Business you must control the main stream of revenue coming in and expenditures going out. Although they are conceived to be just involved in that business accounting is a lot more. They are often referred to as “Bean Counters”. The full details in Business Accounting is to keep an eye on profits, costs, and losses.
This job title as business accountant becomes more confusing and more time consuming as your business grows. If you as the business owner are not directly involved and being your own accountant, then you would have no way of knowing how profitable or not your business is without some form of business accounting.
The simplest of business accounting is the balancing of a checkbook. monitoring the basic financial endeavors of your personal income and wealth is a form of accounting.
Every business needs a good way of monitoring the business accounting of that business. This becomes even more critical in the online business industry. Otherwise the finances can easily run wild and away from you. You often do not see what you’ve spent, what you have received, or whether you can expect a profit or throw in the towel from a major loss. Whether you are a multi-billion-dollar business, or a one man shop it is imperative to stay on top of the business accounting details.
The results of not staying on top of the business accounting can be extremely harmful to your business in the future.
- Missed payment to a supplier
- Customers not paying in full
- Bouncing a check
- Overextending your spending
- Loss of shareholders
When you are an entrepreneur it is of the upmost importance to put into your life a good business accounting system. It does not matter if it is a simple register or a complete accounting team. That all depends upon the size of the company, the number of employees in the company, and the complexity of funds and expenditures the company holds.
It is often hard to keep up with our business accounting needs as an online business. We have multiple avenues in which we receive monies and multiple ways of expelling the money. As you may see in your own online business.
A good example of accounts receivable:
- Money transfers into accounts
- Payments made on time
- Affiliate accounts
- Credit card accounts
- And many more
A Good Example 0f accounts payable:
- Product returns
- Cancellations of services
- Affiliate Payouts
- Product Payouts
- Wholesaler Payout
- Retailer payouts
- Resell payouts
- Employee payroll
- and many others
Our Accountant team keeps all the records and transfers funds within all the accounts to make all of the accounts flow seamlessly in the departments needed. We have meetings monthly and publish quarterly a profit and loss statement with an income statement.
These statements are broken down into every aspect of our business. These number are summed and reported on profit/loss reports every quarter as well as predicted growth/loss for the next quarter.
To create such reports and financial statements that are easy to understand, there is a set of rules and practices that is established which we adhere to. These rules and guidelines are known as the Generally Accepted Accounting Principles, for short GAAP. GAAP was developed to provide basic guidelines for the rules of accounting to prevent the business accounting from getting too confusing.