Charlotte Accounting

Video from our FREE Online Business Course www.myownbusiness.org Session 8 Accounting and Cash Flow Question “Why is a good understanding of accounting important for running your own business?” Maureen Costello Wholesale Distributor Topics covered in this video: Understanding business accounting, cash flow, taxes, loans Transcript: I think that if an entrepreneur does not have a good understanding of accounting there will be a very high probability of failure. Accounting is the way you keep track of how well your business is doing. It’s how you keep track of your cash. If You run out of cash, even if your sales are growing and your profits on the books are high, you’re out of business. You can go bankrupt even with a successful business. So the only way you’re going to know is if you do really good accounting, do cash flow projections and really watch your cash. So that’s number one. Secondly, you have pay taxes, you have to be in compliance with the tax laws. If you’re not very good with accounting’re going to have problems with the IRS. They too can put you out of business. So you want to be sure what you know you’re supposed to be doing from an accounting point of view. So, you will not be able to get bank loans if you do not do a good job at accounting because you have to have financial statements that you can bring to a bank that are in the format that they are accustomed to, in order to gain their confidence to loan you money. So there are a number of reasons why … Video Rating: 5 / 5

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Video from our FREE Online Business Course www.myownbusiness.org Session 8 Accounting and Cash Flow Question “What should a business be doing on a monthly basis to stay on top of their accounting?” Ken Blake Certified Public Accountant (CPA) Topics covered in this video: business accounting, income statement, profit and loss, sales, expenses, receivables, payables, cash flow Well, it’s important on a monthly basis to be able to produce what we call an income statement or a profit and loss statement. This is the document that shows your sales as well as your expenses and it’s normally produced on a monthly basis. The main thing that you need to keep in mind is that for this document to be relevant you need to do a lot of the work, almost on a daily basis. For most companies, entering the bills as they receive them and then billing the customers as sales are made should be done on a daily basis if possible. On a weekly basis one should go in and look at the age of the receivable and thus the age of the payables. The older the payables are of course means that some of your suppliers will be after you to pay money so you want to keep on top of how old some of the bills are and on the other side of the coin you want to make sure that your customers are paying you on time. Checking the age of some of the outstanding bills on a weekly basis will make your financial statements that much more relevant than if you check them on a monthly basis. Video Rating: 5 / 5

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