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11 Essential Bookkeeping Accounts for Any Small-business Owner
By: Lita Epstein
Posted: October 31, 2012, from the November 2012 issue of Skin Inc. magazine.
When you take the time to learn how to read and understand your books, you’ll have an excellent gauge of how well you’re doing. They also provide you with lots of information throughout the year, so you can test the financial success of your business strategies and make course corrections early in the year, if necessary, to ensure that you reach your year-end profit goals. When you have a firm grasp of the accounts your bookkeeper uses to manage your business, you’ll have a solid financial picture of your business, enabling you to make better decisions and to run your business more efficiently. Following are the most common, must-have accounts used in skin care facilities.
1. Cash. All your business transactions pass through the cash account, which is so important that bookkeepers often use two journals—cash receipts and cash disbursements—to track the activity.
2. Accounts receivable. If your skin care facility sells its products or services to clients on store credit, you definitely need an accounts receivable account. This account is where you track all money due from clients.
3. Inventory. Every company must have products to sell. Those money-making products must be carefully accounted for and tracked, because it’s the only way a business knows what it has on hand.
4. Accounts payable. No one likes to send money out of the business, but you can ease the pain by tracking and paying bills in your accounts payable account.