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Accounting Savvy for Business Owners – Excerpt Chapter 4

Friday, November 25th, 2011

Petty Cash Expenses

Accountants frequently receive questions about how to handle cash layouts for business expenses. Usually, the questions involve one of the following scenarios:

  • Someone used cash or a personal credit card to buy something for the company and that person needs to be reimbursed.
  • Someone used the debit card for the business account to withdraw cash and didn’t use all of that cash for a business expense; the remaining cash needs to be tracked.
  • Someone is going to be traveling for the company and needs cash in advance (and will need to return unspent cash).

There are other scenarios similar to these, but the ultimate question is, “How do I manage cash transactions that fall outside of the usual data entry for vendor bills and payments”?

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Accounting Savvy for Business Owners – Excerpt – Chapter 1

Tuesday, November 15th, 2011

Chapter 1 – Basic Accounting Rules

Business accounting is based on a double entry system of bookkeeping. This means that for every entry you make there must be an equal and opposite entry. Opposite refers to the other side of the ledger.

The Ledger

The ledger sides are labeled DEBIT (always on the left) and CREDIT (always on the right), and you must make sure that every transaction has equal entries posted to both sides of the ledger.

If you do your bookkeeping manually, or in a spreadsheet program, you must enter both sides of the ledger. If you use checkwriting software (such as Quicken) you should move those transactions into a manual system or a spreadsheet program in order to enter transactions to both sides of the ledger accurately (or, even better, invest in real accounting software).
If you use accounting software, you usually have to enter only one side of the transaction because your setup and configuration of the software pre-determines the postings. For most transactions the software takes care of the “other side” of the entry for you automatically, so you don’t even have to think about it. (The exception is a journal entry which is generally used to adjust existing figures in the ledger.) However, you do have to assign the appropriate account to a transaction, which means you have to understand the way business accounting transactions work in order to set up your software properly.

QuickBooks – “Funny Category” Appearing in Reports

Wednesday, November 9th, 2011

Solving the QuickBooks Puzzle

Congratulations to Roberta Gold of California, who wins a copy of Accounting Savvy for Business Owners for solving our QuickBooks puzzle last month. Her name was drawn at random from the correct entries we received.

If you missed the puzzle, here it is:

A reader wrote to ask whether she could invoice multiple jobs in a single QuickBooks invoice. She'd been creating separate invoices for each job, but wanted to know if she could avoid these multiple invoices each month. She said she'd asked the question in the QuickBooks Community Forums and received several answers telling her she could. One answer told her to put each job on a separate line item of the invoice, which is what she did. Now, of course, her recent invoices aren't linked to jobs (and the same problem would occur if she were using Sales Receipts). She also said that in addition to listing each job with inaccurate data, her customer reports include a "funny category" she doesn't understand. What's the name of the "funny category" that's appearing in her customer reports?

The "funny category" in her reports is "Other". For each transaction that included multiple jobs for a customer there's a report section named ": Other. The actual job is never linked to the QuickBooks transaction.

Accounting Savvy for Business Owners has had excellent reviews from accountants and business owners. This book answers the most frequently asked questions business owners pose to their accountants. If you're a business owner you'll learn how to keep books accurately. If you're an accountant, this is a great reference for answering your clients' questions (or to present as a gift to that client who calls most often with questions like, "How do I take money out of the business?" or "Why doesn't my bill payment show the expense?").

Our Book Wins an Award

Wednesday, November 2nd, 2011

Award for Accounting Savvy for Business Owners

"Accounting Savvy for Business Owners", published by CPA911 Publishing, written by Philip B. Goodman CPA, has been awarded a prize in the Best Business Books category by The Next Generation Indie Book Awards. This is the largest Not-for-Profit book awards program for independent publishers. The awards recognize and honor the most exceptional independently published books.