Accounting Tips That You Need to Know

unduhan-14What’s the difference between an accountant and a bookkeeper? What are accounting ratios, accounts receivables and accounts payables? And what exactly does your accountant mean when she says your financial statements need to follow GAAP standards?

Whether you do your own accounting, have an in-house accountant or hire a third party accounting firm, having a grasp on accounting speak can help your business tremendously. Not only will it allow you to understand your numbers better, but it will also help you make wiser business decisions. To help you get started, here are some basic accounting terms small business owners need to know, followed by our reference guides.

Accounts payable are the bills and other debts that the business needs to pay. As a matter of fact, the only thing that a business pays that is not considered accounts payable is payroll. Everything else falls under the category, making it a critical aspect of your business.

“The accuracy and completeness of a company’s financial statements are dependent on the accounts payable process,” said Harold Averkamp, founder and author of accounting advice website Accounting Coach. “The efficiency and effectiveness of the accounts payable process will also affect the company’s cash position, credit rating and relationship with its suppliers.”

Implementing a dependable accounts payable system will produce accurate financial information you need to plan for both the short and long term. Here’s what you need to know about keeping up with your business debts.