Managing Business Finances: Accounting Techniques

The notion of accounting can be daunting for many people. However, managing your finances is a key to success in business and it's important that you have an understanding of the basics. This blog post will give you some basic tips on how to manage your cash flow and balance sheet so that you can avoid future headaches! The first thing we'll discuss are accounting techniques - specifically debits vs credits.

The notion of accounting can be daunting for many people. However, managing your finances is a key to success in business and it's important that you have an understanding of the basics. This blog post will give you some basic tips on how to manage your cash flow and balance sheet so that you can avoid future headaches! The first thing we'll discuss are accounting techniques - specifically debits vs credits.

The first thing we'll discuss are accounting techniques - specifically debits vs credits. While it might seem like a simple concept, knowing this basic rule can go along way in helping you to understand your finances and balance sheet! In the world of business finance, Debit refers to an increase in assets or a decrease in liabilities. Meanwhile, credit refers to an increase in your equity (or net worth) and/or the reduction of debt owed by you!

While it might seem like a simple concept, knowing this basic rule can go along way in helping you to understand your finances and balance sheet! In the world of business finance, Debit refers to an increase in assets or a decrease in liabilities. Meanwhile, credit refers to an increase in your equity (or net worth) and/or the reduction of debt owed by you!

When using accounting techniques - remember that debits are expenses, credits are revenues and decreases = debit while increases = credit.

When using accounting techniques - remember that debits are expenses, credits are revenues and decreases = debit while increases = credit. This is the most fundamental rule for understanding your business finances!

Now let's talk about cash flow management. Cash Flow refers to how money flows into and out of a company. If you're able to manage your cash flow well, you'll be able to avoid future headaches and stay in business.

The best way for a small business owner/manager to manage their cash flow is by using the 50-30-20 rule!

Now let's talk about cash flow management. Cash Flow refers to how money flows into and out of a company. If you're able to manage your cash flow well, you'll be able to avoid future headaches and stay in business. The best way for a small business owner/manager to manage their cash flow is by using the 50-30-20 rule!

The best way for a small business owner/manager to manage their cash flow is by using the 50-30-20 rule! The basic idea behind this strategy is that 50% of your total revenue should be going towards expenses such as rent, salaries and other bills. Meanwhile, 30% should go towards reinvesting in your company and 20% should be used for yourself - whether it's a holiday, buying some new clothes or whatever!

The basic idea behind this strategy is that 50% of your total revenue should be going towards expenses such as rent, salaries and other bills. Meanwhile, 30% should go towards reinvesting in your company and 20% should be used for yourself - whether it's a holiday, buying some new clothes or whatever!

Remember that if you have expenses coming from your personal account (for example: travel) then make sure to note them as such so they don't get mixed up with business expenses. It also doesn't hurt to keep receipts and other records in case of an audit!

Remember that if you have expenses coming from your personal account (for example: travel) then make sure to note them as such so they don't get mixed up with business expenses. It also doesn't hurt to keep receipts and other records in case of an audit! As always, we recommend keeping good records of all transactions for at least five years. As always, we recommend keeping good records of all transactions for at least five years.

The next thing you should know are the different types of accounting methods and how they work. These include: Cash-based Accounting - focuses on reporting where money is going in and out of a business but doesn't look into past expenses or assets.

Focuses on reporting where money is going in and out of a business but doesn't look into past expenses or assets. Accrual-based Accounting - focuses on matching revenue earned with the corresponding expense incurred to earn that income. This means you need to match all your expenses against incoming cash flows, taking into account time differences between earning income and incurring expenses.

Focuses on matching revenue earned with the corresponding expense incurred to earn that income. This means you need to match all your expenses against incoming cash flows, taking into account time differences between earning income and incurring expenses. The last type is known as "LIFO" inventory accounting which stands for Last in First Out. It's used to determine the value of inventory that you have on hand, which is useful for calculating taxes or other forms of business valuation.

The last type is known as "LIFO" inventory accounting which stands for Last in First Out. It's used to determine the value of inventory that you have on hand, which is useful for calculating taxes or other forms of business valuation.

As always, we recommend keeping good records of all transactions for at least five years. As always, we recommend keeping good records of all transactions for at least five years.

We hope you found this article helpful! We'll be back with our next post in a few days' time.

Now that you know how to manage your business finances it's time to plan for the future and avoid any serious money problems - so make sure you read part two of our series, "How To Grow Your Business With Strategic Planning"!