Talking Cents

Accounting Terms: Rounding Out The O's And P's

At this stage, we've just about covered a majority of accounting terms, in purely technical terms. Since we're barely past halfway, though, that means we've still got a sizable list of terms to get through, so if you're hoping to skip out on hiring a dedicated accounting professional for your small business and you'd like to manage your accounts yourself, then you might want to familiarise yourself with the content we're covering today.

Is It A Bird? Is It A Plane?
Unfortunately, the direct costs of making goods or providing services are not the only costs related to managing your business. You'll also need to consider a broad range of costs related to other bills, such as rent on your storefront, the electricity you use to work, or any other subscriptions or reoccurring payments you might rely on, which can be things like software or security. These costs are called the overhead for your business, and they are recorded on your income statements as a separate type of cost.

Wouldn't You Want To Get Paid For The Work You Do?
When you have employees working for your business, it's important they're paid properly for their work. The process of paying them is referred to as payrolling, and it's vital that this process is completed without error as consistently as possible, because if you make regular mistakes, your employees are likely to lose morale, and that will quickly damage your business more than most other complication can. To make sure you're paying your employees properly, you'll need to track the hours they work, make sure they're being paid at the correct award rate, remove any taxes as required by law, and pay any superannuation contributions or other fees as necessary.

Teach A Man To Fish…
Money today is worth exactly what it says on the bank note; nothing more, nothing less. However, thanks to principal of inflation, that same amount of money won't be worth as much in the real world as time goes on, though this can be counter-balanced with an associated assumed rate of interest on the money you currently hold. The 'present value' of that money, then, is said to be it's value in the future, once you've accounted for the interest that would accumulate in that time.

Still Need A Hand?
Thankfully, you don't have to do this alone. When you work with the best business accountants in the city, the M.A.S Partners, you'll be able to rest easy while maintaining full confidence that your accounts are being handled properly. Our team has years of experience working with small businesses, so we're familiar with everything you might need, whether it's help making sure your business is tax compliant, or you need a budget drawn up to help you receive funding in the future. To speak with our team of small business accountants in Sydney about what we can do for you, call us on (02) 9211 5000.