Talking Cents

Accounting Terms: I & J

We've made good progress thus far, but that doesn't mean we're at the end yet. If you've been keeping up, you probably think you're beginning to understand just how many distinct accounting terms there are that you'll need to be aware of to manage the accounting for your business. To make sure you do that properly, you'll need to know every term used in the industry, because even a small mistake can quickly become quite costly. Unfortunately, there's probably still a far larger number than you realise, but our friendly team is here to help.

Declare Your Earnings
Arguably the most exciting part of your accounting process will be where you get to record and declare your earnings, otherwise known as either a statement of revenue and expense or a profit and loss statement. These records are designed to help a company or business express their expenses and revenues across a set accounting period, which can be used to roughly approximate the total gross income for that time. Generally, these statements are used to assess the financial health of a company, though small businesses are likely also familiar with the profit and loss statements they'll submit to the ATO for taxation purposes.

Let Me Check In The Back
If you sell any sort of physical asset as part of your business, you have had to deal with and manage assets in the process. These assets might be either the final product that will end up on your shelves, or it might just be the raw materials you use to produce them. Typically, it's best to make sure that you don't hold too much inventory for too long, as it can quickly become obsolete, leading to loss, and there are also significant costs associated with the long-term storage of goods.

Maintaining A Daily Diary
When you record a business transaction into your general ledger, it is referred to as a journal entry. This journal entry can include a broad range of information useful for later analysis, including account names and number, whether it is a debit or credit transaction, the entry date, and an identifying number. Optionally, you may also choose to record a description with the entry, if you feel that might be of use at a future date.

Don't Waste Your Time Doing Someone Else's Job
Managing a small business is not easy, and it can quickly consume a large majority of your time. If you'd like to avoid the obligation of also managing your own accounting, it might be simpler to hire a team of business accountants to help you get the job done. Fortunately, the M.A.S Partners and our team have spent years working as the leading professionals in our region, and we're more than happy to help you make sure your accounting work is completed as required. To speak with our team of small business accountants in Sydney about what we can do for you, call us on (02) 9211 5000.