Get the Goods on the Bottom Line

Many people think marketing and sales are the most important aspects of running a business, but it’s the story told by the bottom line once the accounts payable and accounts receivable is balanced that lenders want to hear.  But what are these functions and why are they so important.

The  receives from vendors they do business with and owe money to are handed off to the accounts payable department to be paid.   These are the items bought on credit, or by using a purchase order.  Office supplies, utilities, insurance premiums, furniture, maintenance, and other expenses are examples.  Accounts receivables basically come from the invoices the business generates to get paid for the goods and services it provides its customer.  Every transaction that falls into one category or the other must be carefully accounted for based on a chart of accounts.  This that will be used to sort the expenses into categories that when tallied at the end of the month, will tell the business owner how much was spent in a specific category.  Large companies might have several people working only on receivables or payables.

A smaller company will have a bookkeeper doing both.  Just as they pay invoices they receive receives from vendors they do business with and owe money to are handed off to the accounts payable department to be paid.   These are the items bought on credit, or by using a purchase order.  Office supplies, utilities, insurance premiums, furniture, maintenance, and other expenses are examples.  Accounts receivables basically come from the invoices the business generates to get paid for the goods and services it provides its customer.  Every transaction that falls into one category or the other must be carefully accounted for based on a chart of accounts.  This that will be used to sort the expenses into categories that when tallied at the end of the month, will tell the business owner how much was spent in a specific category.  Large companies might have several people working only on receivables or payables.  A smaller company will have a bookkeeper doing both.  Just as they pay invoices they receive form service providers and vendors they do business with, they also create and send off invoices to bring in the revenue that sustains the business, pays the bills and funds the payroll.

There’s lot more to the profession, and those interested in becoming a professional, certified bookkeeper should check out the courses offered by Udemy.  They offer a complete certification for those who want to learn more about accounts payable and receivables, payroll and the other reports used on the job.  You’ll find a code from Groupon that can be used to save money on the cost of the course, but be sure to save the receipt, you’ll want to log it in as one of the expenses you acquired for the month.  Tax preparation and business administration is easier when you know the vocabulary of the business.  Let Udemy prepare you for a career in bookkeeping by teaching you what an account is, how to read a balance sheet, and how to compute your cost of goods.  And if you want to start a bookkeeping business of your own, you’ll get the goods on that, too.

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