When an idea is developed into a business, establishing the accounting processes to track the revenue and expenses is generally not on the top of the list. A chart of accounts short name is (COA) and is defined as “a listing of the names of accounts that a company has identified and made available for recording transactions in its general ledger.” A chart of accounts has standard accounts you may see despite the industry of business you work in. However, typically the order of the accounts are as follows: Balance sheet accounts:
Income statement accounts:
Your account receivables are considered an asset, and so is your income but they are two completely different things. Account receivables are created by the sale of goods or services but income is what you have received from the sale of goods or services. You see, if you bill a customer and give them time to pay it is accounts receivable, and when you receive the money via deposit into your bank account then that is income. Many business owners may be using an accounting software to manage their chart of accounts. The software may provide a list of custom accounts to use but it will be the responsibility of the respective business owner to add custom accounts to ensure finances are recorded accurately. Below is an example of the chart of accounts for a Salon professional: Assets:
Fixed Assets:
Expenses:
A chart of accounts generally serves as an outline for the business structure and is a tool for gathering and organizing financial information. The chart of accounts example below is one sample guide. It identifies the account name (A), this name will depend on your type of business and sub-group (B), is dividing the chart of accounts into groups for financial representation and normally (C), indicates whether the account is normally increased by a debit entry or credit. For example, depending on the size of business the leader may have one individual responsible for reconciling all of the cash accounts to ensure online, in-store or one-time made purchases are all accounted for on a daily basis. But, in another business the leader may assign cash and accounts receivable to one individual (not recommended, but could happen) and they would be responsible for ensuring all cashed is received and accounted plus for in addition,
The debit and credit column indicates whether the account is normally increased by a debit or a credit. As an example, expense accounts are normally increased by a debit entry but income accounts are increased by a credit. If your looking to strengthen the accounting processes of your business, Fontenot & Associates Solutions LLC has the skills and tools to get you started. Even though your business may be a one person shop, the organization of your finances should be accurate and organized from day one. Getting started is simple, let us show you how.
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How is that Going for You?How does one define a non-profit organization? It has been defined as entities that perform charitable services by accepting funds from the general public. To help regulate the activities and encourage proper allocation of funds, accounting standards have been put in place by the Financial Accounting Standards Board also known as FASB. The accounting standards are used by management of non-profit organizations as a guide to record transactions and comply with program requirements. Many non-profit organizations exist to accomplish a goal and not to return a profit however as funding opportunities present themselves and partnerships begin to form, the financial statements will need to be accurately managed by a designated accountant or management. The finances are generally budgeted and every line item within the financials are accounted for. The operational budget is the foundation from which all of the work will be carried out. It allows you to establish benchmarks and determine priorities. In addition, it brings light to the variable cost which may exist and allows management to analyze and change the to fixed cost. Here are some key steps in developing your budget:
These steps are sufficient and valid for a newly established non-profit organization and those who have been established for five or more years. A well established and maintained budget is what donors look for. Donors want to know where the money is going. They want to give their money away to "a worthy cause", and it is management's responsibility to show them that that's what is occurring. Showing that you're non-profit organization is worthy starts with a good budgeting process which engages those who are responsible for adhering to the budget and implementing the organization's objectives in creating the budget. Get started today with the annual budgeting process, is it documented, with task, responsibility assignments and deadlines clearly state? It is never too late to get started. Fontenot & Associates Solutions, LLC offers the skills and experience to prepare the annual budgeting procedures in advance which will ensure proper delegation of assignments and the delivery of a clear message. The meaning of life is to find your gift. The purpose of life is to give it away." - Pablo Picasso There's a lot to do but so little time to accomplish everything when operating a small business. Even though this is true, many business owners remain hesitant about opening up their accounting records to a part-time accountant or business consultant even when they know their financial records are in shambles. Profitability is a primary goal of all business ventures. Without profitability the business will not last in the long run. Analysis of profit is of vital concern to stockholders because they derive revenue in the form of dividends. Profitability is measured with income and expenses. Increasing profitability involves determining which areas of a financial strategy are working and which ones need improvement. In a competitive marketplace, a business owner must learn to achieve a successful level of profitability. Without sufficient capital or the financial resources used to sustain and run a company, business failure is imminent. The bottom line is that no business can survive for a significant amount without making a profit. Measuring growth is possible by looking at statistics such as your weekly sales, staffing and turnover. Though present profitability of a company is good, as a business owner you should always explore future opportunities for greater profitability. Below are three key questions to consider when outlining or revising a business model:
Take time today to answer the necessary questions about your business stage and the next three to five years of future expectations. What are the areas of your business that concern you? Here at Fontenot and Associates Solutions, LLC we offer one to one consultations to ensure we put it on paper for you and your customers. Let's get started today with setting your business apart. Click here to email us your questions. “It’s fine to celebrate success but it is more important to heed the lessons of failure.” Many business owners would agree that, there is fear associated with launching your own business. When in the start-up phase of your business there will be a lot of planning and critical thinking involved. Decisions must be made regarding customer service expectations, client target markets and business accounting responsibilities. Establishing Standard Operating Procedures (SOP) are essential for your business success. They can provide the visual for how task should be performed and who is responsible for ensuring task are completed. You may ask if outcomes within your business design are measurable. The answer to is a definite Yes. As a small business owner here are four benefits to becoming highly productive:
A SOP is a living document, which is subject to change. Fontenot & Associates Solutions, LLC offers quarterly reviews and an electronic version of your unique guide as part of your servicing package. Putting together a clear and unique guide is just a click away, don't hesitate to contact us. Don't do it for just you, do it for your business. Every choice you make has an end result. – Zig Ziglar as a business owner, you may have one specific goal that remains consistent week after week on your checklist. Is increasing your customer base by a certain percentage, one of them? An increase in the customer base can be critical to the growth of the business and tends to be the trigger to an increase in revenue sales. not only that, the increase could aslo mean the current marketing techniques and strategies being performed are finally starting to pay off. |
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