What is accounting? The answers to master well
Often, the mere mention of the word "accounting" thrills many business leaders. Unpleasant, fussy, technical and uncertain: this is what is often criticized accounting. Yet mastering one's accounting is a great way to monitor the health of your business and, at the same time, find ways to improve it. Some basic elements to control your accounting.
ACCOUNTING, WHAT IS IT?
Accounting is simply a tool to:
to establish at a given moment a photograph of the company,
to take stock of a given period,
to make projections,
To do this, accounting is obviously based on numbers, but not just any ... and not just any way. Indeed, if we talk about accounting journals for example, it is because we are supposed to regularly enter data into these documents.
Which brings us to a council, size: the more we do its accounting regularly, and more it becomes simple!
And this should not be particularly complicated. For accounting is, quite simply, to:
note in a column, excluding tax and VAT, of course, the money entries associated with each date of collection and operation justifying the entry of money;
note in a parallel column, tax-free and always including all cash outflows, each associated with the disbursement date and the operation justifying the cash outflow.
It's as simple as that: by doing this, you have just completed your accounting journal. And by doing it regularly, not only do you not have to look for the supporting documents that may have been lost, but you can, at a glance (or almost) determine if one of the columns predominates over the other ...
ESSENTIAL COMPATIBILITY ELEMENTS
And above all this regular bookkeeping all that is simplest you will develop two basic tools to have a real visibility on the health of his business: the accounting dashboard and the cash plan .
THE ACCOUNTING DASHBOARD(Accounting Homework Answers)
The accounting dashboard is nothing more than a table that summarizes the company's expenses and revenues month by month. This is a formalization a little different from the table mentioned above but it is basically the same thing.
Double entry : the columns indicate the months, the rows the different products and charges
Monthly and cumulative : each line must be doubled to show the monthly result and cumulative result
Ideally, to avoid unpleasant
surprises, the charges to come but not yet paid must also be indicated each month .
With this table, you can know the month by month the health of your company since at the bottom of each column is recorded the result.
THE CASH PLAN
But that's not everything. Because we know it: cash is the nerve of war . It is therefore necessary to know also the state of its cash ... which takes into account the VAT for example, contrary to the result!
The cash plan is simply a table showing the statement of cash available month by month . It is therefore necessary to indicate the actual and projected receipts and disbursements. For example, if you know that a customer is paying you at 30 days, the receipt must be shown on the corresponding month.
