In this 1 hour webinar hosted by BizCentral USA, we discuss the basic financial management, bookkeeping and accounting methods to keep your small business on the right track! For more information, please visit: http://bizcentralusa.com/accounting_cpa_bookkeeping.php
1. Basic Financial Management & Bookkeeping Administrator Nicole Roach Marketing Coordinator BizCentral USA Key Speaker Andrea RootAccounting Coordinator BizCentral USA A Webinar By:
2. Welcome! BizCentral USA: A “One-stop” resource center for small businesses nationwide! Key Speaker: Andrea Root Questions Recorded Webinar Available At: http://www.bizcentralusa.com/webinararchive/index.php
4. Forward Some of the information in this presentation is complicated and generally takes more than one day to learn. The best way to learn it is through practice using a work book and real-life examples. We recommend consulting a professional before making any big financial decisions or changes
6. Getting Started: Key Terms Bookkeeping – basic recording of various financial transactions. Asset – something you currently, or will own in the future. Liability – something you owe to someone else. Accounts receivable – money owed by customers. Accounts payable – money owed to others.
7. Key Terms Cash flow – a revenue or expense stream Cash receipt – cash received Cash disbursement – cash paid Revenue – all incoming money Expenses- all outgoing money
8. Key Terms Profit/Surplus – when revenue minus expenses results in a positive number Deficit – expenditures were greater than revenues Net – total before deductions Gross- total after deductions
10. Process: Basics There are two ways to do this: Cash basis Accrual basis. The greatest difference between the two is how you record transactions.
11. Process: Posting Your Transactions There are several ways to keep track of your financial records. I’ll give you a high-level overview of two methods: 1. Single entry 2. Double entry
13. Process: Double Entry The double entry method is the preferred method of recording transactions. This method may seem complicated at first, but it will make things easier in the long run. When done correctly, your books will always balance
23. Profit and Loss Statement Shows changes in assets throughout the year Reflects if an organization is operating with a surplus or deficit Highlights areas of concern Is typically required for loans
24. Balance Sheet Shows the overall value of your organization Shows total assets, subtracts total liabilities, and reports net assets Generally reviewed at year end Banks or accountants may ask for this document.
25. Cash Flow Statement Provides information about all cash inflows and outflows from operations and investments Shows changes in cash throughout a given time period (quarter or year) It is important to know how much cash your organization has
27. Manual Record Keeping Advantages: You can organize the information using your own system You will gain a better understanding of the process and it can be an excellent learning experience Disadvantages: There is a lot of room for error You need to be highly organized and stay on top of the process Your accountant may not understand your system Can be very time consuming and stressful
28. Computer Based Record Keeping Advantages: Makes entries easier and quicker Automatically updates ledgers Easily creates financial reports Disadvantages: You may not understand how the accounting process really works You may become less diligent about keeping records Software can be expensive and may take time to learn
29. Outsourcing Advantages: Create and manage your income and expenses Handle all of your federal and state report forms Handle your key documents Create Reports Ensure compliance with regulations & industry standards Decreases opportunity cost of time spent supervising, training, & correcting records, entries, and other flaws
30. Outsourcing Disadvantages: You are removed from the process You may not understand how the accounting process really works This can become costly (but doesn’t have to!)
32. Conclusion Financial management is necessary for every organization Several methods can be used to fulfill common tasks and reach common goals Financial management can be complex, although with the right knowledge, resources, and tools, it doesn’t need to be stressful, or overly expensive Consult a professional if you have concerns about your organization's finances