With some knowledge and a lot of order, you can have clarity about your business accounts. This way you will be able to reduce the payment of your taxes and avoid delay in payments. know accounting of your business is important.
Accounting serves in a company to keep accounts and control over all daily operations such as purchase, sale, expenses and investments. The person in charge of this work must organize the documents and both record and report the activities that are carried out with the money, either tangible or intangible movements.
The operations are to analyze, classify, summarize and finally put them in a financial statement or balance that must contain all the truthful information and financial reality of the company.
In many cases, because it is a small business, a microenterprise, a store or an enterprise, you do not have enough resources to have a payroll that includes an accounting department, or at least one professional person in the area to handle it. of economic affairs . know accounting of your business is important.
What often becomes a problem, because surely the person who created the company or the work team is not an accountant, economist or administrator and even worse does not have a good management of their finances , because they only cared about empowering their capacities and perhaps the product or service that was dedicated to sell.
During the first year, everything may turn out well. But the moment in which several invoices start arriving to pay taxes for the constitution of your company and then you have to run to collect bills that you never saved and report the assets and obligations that you never registered. Not only that, you can lose tax benefits for having no idea of the subject.
So the best thing is that you build the habit of reading so that you are up to date with the changes that happen in the country and that can benefit you and also, that you learn some basic accounting things so that at least you can keep your operations in order and in case you can make correct decisions for the financial situation of your company.
Let’s start with some basic concepts
According to vivoemprendiendo.com, taking control of your business financially allows you to know the needs you have to face and the resources you have to do so. In fact, he assures that if you are not careful with the accounting, you are risking to exhaust your income in the middle of the month or to ignore the loans granted to a third party.
Look at these two concepts:
- General Balance: it is a summary that reflects the current panorama of your company. This will guide you to make financial decisions. Basically it is a summary of everything the company has, what it owes and what really belongs to the owner. The report is classified as follows:
1.1 Assets: are all the assets and rights that are owned by the company and that contribute to the generation of profits. Example: real estate, bank accounts etc. know accounting of your business is important.
1.2 Liabilities: are the debts and obligations that the company is responsible for and that somehow generate costs to the company. Example: accounts payable, loans etc.
1.3 Equity: is the result of subtracting liabilities to assets. This will know exactly what the business owner has in tangible or intangible form, or rather if any loss is reported.
- The Income Statement: this document records the data of a specific moment in the company so that it shows us the profit or loss statement. Its components are:
2.1 Income: those that were obtained during the accounting period that is being reported. Example: income from sales, financial income or other income.
2.2 Costs: is the economic cost that represents the manufacture of a product or the provision of a service. When determining the cost of production, you can establish the retail price that is the sum of the cost plus the benefit.
2.3 Expenses: always implies an outflow of money. can be fixed costs such as, for example, the payment of the rent, the payroll or the services or variable expenses for any emergency. know accounting of your business is important.
In four steps we tell you how you should organize yourself to take good management of your company’s movements and financial operations. The key to achieving this is to be disciplined and create the habit of filing all the documents that are necessary. These are the steps that emprendedores.es proposes
- Get a billing program: the control of income and expenses is the main thing. Use technology to do this a software that has templates for invoices and that file them so that you can analyze the information to make projection about your business.
- Keep a record of your expenses and income: in both cases organize them by categories. Write or make a copy of the receipts that you give to your clients and in the case of expenses divided into fixed (credits, services, payroll etc) and variables (emergencies, or sporadic expenses)
- Keep a record of taxes: the first task is to find out what taxes you have to pay according to the constitution of your company and if you are a natural or legal person. Make a calendar to record the important dates of the year in which you must have documents ready and you must comply with this obligation.
- Save time and money: choose once a month or every fifteen days a day to organize the documents and archive the accounting operations for the time you need to make the balance sheet or the tax payment. Remember that if you have everything in order you can find tax benefits. know accounting of your business is important.