Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Personal Accounting
If you have a bank account, of course you balance it periodically to account for any differences between what's in your statement and what you wrote down for cheques and deposits. Many people do it once a month when their statement is mailed to them, but with the advent of online banking, you can do it daily if you're the sort whose banking tends to get away from them.
You balance your cheque book to note any charges in your bank account that you haven't recorded in your cheque book. Some of these can include ATM fees, overdraft fees, special transaction fees or low balance fees, if you're required to keep a minimum balance in your account. You also balance your cheque book to record any credits that you haven't noted previously. They might include automatic deposits, or refunds or other electronic deposits. Your cbank account might be an interest-bearing account and you want to record any interest that it's earned.
You also need to discover if you've made any errors in your record keeping or if the bank has made any errors.
Another form of accounting that we all dread is the filing of annual income tax returns. Many people use an accountant to do their returns; others do it themselves. Most forms include the following items:
Income - any money you've earned from working or owning assets, unless there are specific exemptions from income tax.
Personal allowances - this is a certain amount of income that is excused from tax.
Other allowances - some personal or business expenses can be deducted from your income to reduce the taxable amount of income.
Taxable income - This is the balance of income that's subject to taxes after personal allowance and deductions are factored in.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Thursday, September 23, 2010
Tuesday, September 21, 2010
Bookkeeping Basics
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Bookkeeping Basics
Most people probably think of bookkeeping and accounting as the same thing, but bookkeeping is really one function of accounting, while accounting encompasses many functions involved in managing the financial affairs of a business. Accountants prepare reports based, in part, on the work of bookkeepers.
Bookkeepers perform all manner of record-keeping tasks. Some of them include the following:
-They prepare what are referred to as source documents for all the operations of a business - the buying, selling, transferring, paying and collecting. The documents include papers such as purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeepers also determine and enter in the source documents what are called the financial effects of the transactions and other business events. Those include paying the employees, making sales, borrowing money or buying products or raw materials for production.
-Bookkeepers also make entries of the financial effects into journals and accounts. These are two different things. A journal is the record of transactions in chronological order. An accounts is a separate record, or page for each asset and each liability. One transaction can affect several accounts.
-Bookkeepers prepare reports at the end of specific period of time, such as daily, weekly, monthly, quarterly or annually. To do this, all the accounts need to be up to date. Stock or Inventory records must be updated and the reports checked and double-checked to ensure that they're as error-free as possible.
-The bookkeepers also compile complete listings of all accounts. This is called the trial balance. While a small business may have a hundred or so accounts, very large businesses can have more than 10,000 accounts.
-The final step is for the bookkeeper to close the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Bookkeeping Basics
Most people probably think of bookkeeping and accounting as the same thing, but bookkeeping is really one function of accounting, while accounting encompasses many functions involved in managing the financial affairs of a business. Accountants prepare reports based, in part, on the work of bookkeepers.
Bookkeepers perform all manner of record-keeping tasks. Some of them include the following:
-They prepare what are referred to as source documents for all the operations of a business - the buying, selling, transferring, paying and collecting. The documents include papers such as purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeepers also determine and enter in the source documents what are called the financial effects of the transactions and other business events. Those include paying the employees, making sales, borrowing money or buying products or raw materials for production.
-Bookkeepers also make entries of the financial effects into journals and accounts. These are two different things. A journal is the record of transactions in chronological order. An accounts is a separate record, or page for each asset and each liability. One transaction can affect several accounts.
-Bookkeepers prepare reports at the end of specific period of time, such as daily, weekly, monthly, quarterly or annually. To do this, all the accounts need to be up to date. Stock or Inventory records must be updated and the reports checked and double-checked to ensure that they're as error-free as possible.
-The bookkeepers also compile complete listings of all accounts. This is called the trial balance. While a small business may have a hundred or so accounts, very large businesses can have more than 10,000 accounts.
-The final step is for the bookkeeper to close the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Sunday, September 19, 2010
Profit and Loss
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Profit and Loss
It might seem like a no-brainer to define just exactly what profit and loss are. But of course these have definitions like everything else. Profit can be called different things, for a start. It's sometimes called net income or net earnings. Businesses that sell products and services generate profit from the sales of those products or services and from controlling the attendant costs of running the business. Profit can also be referred to as Return on Investment, or ROI. While some definitions limit ROI to profit on investments in such securities as stocks or bonds, many companies use this term to refer to short-term and long-term business results. Profit is also sometimes called taxable income.
It's the job of the accounting and finance professionals to assess the profits and losses of a company. They have to know what created both and what the results of both sides of the business equation are. They determine what the net worth of a company is. Net worth is the resulting value amounting from deducting a company's liabilities from its assets. In a privately held company, this is also called owner's equity, since anything that's left over after all the bills are paid, to put it simply, belongs to the owners. In a publicly held company, this profit is returned to the shareholders in the form of dividends. In other words, all liabilities have the first claim on any money the company makes. Anything that's left over is profit. It's not derived from one element or another. Net worth is determined after all the liabilities are deducted from all the assets, including cash and property.
Showing a profit, or a positive figure on the balance sheet, is of course the aim of every business. It's what our economy and society are built on. It doesn't always work out that way. Economic trends and consumer behaviors change and it's not always possible to predict these and what income they'll have on a company's performance.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Profit and Loss
It might seem like a no-brainer to define just exactly what profit and loss are. But of course these have definitions like everything else. Profit can be called different things, for a start. It's sometimes called net income or net earnings. Businesses that sell products and services generate profit from the sales of those products or services and from controlling the attendant costs of running the business. Profit can also be referred to as Return on Investment, or ROI. While some definitions limit ROI to profit on investments in such securities as stocks or bonds, many companies use this term to refer to short-term and long-term business results. Profit is also sometimes called taxable income.
It's the job of the accounting and finance professionals to assess the profits and losses of a company. They have to know what created both and what the results of both sides of the business equation are. They determine what the net worth of a company is. Net worth is the resulting value amounting from deducting a company's liabilities from its assets. In a privately held company, this is also called owner's equity, since anything that's left over after all the bills are paid, to put it simply, belongs to the owners. In a publicly held company, this profit is returned to the shareholders in the form of dividends. In other words, all liabilities have the first claim on any money the company makes. Anything that's left over is profit. It's not derived from one element or another. Net worth is determined after all the liabilities are deducted from all the assets, including cash and property.
Showing a profit, or a positive figure on the balance sheet, is of course the aim of every business. It's what our economy and society are built on. It doesn't always work out that way. Economic trends and consumer behaviors change and it's not always possible to predict these and what income they'll have on a company's performance.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Saturday, September 18, 2010
Sage training for payroll in Mansfield
Sage training for payroll in Mansfield
Nottingham Accounting Solutions Ltd can help you
• Sage Training
When you have invested in Sage Payroll software, either Sage 50 Payroll or Sage Instant Payroll, it needs to work for your business. We offer one-to-one Sage Payroll Training on your own system for you and your staff. Our Sage Payroll Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage support training as you go through your month end and year end routines at the appropriate times. For more information see our website at Sage Training for Payroll in Mansfield.
• Sage Payroll Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Payroll Software, then set it up and configure it for YOUR business. Save hours of frustration.
• Sage Payroll software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage Payroll products at competitive prices.
• Nottingham Accounting Solutions Ltd can sell you the Sage Payroll software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs.
We aim to put you on the fast track to getting the most out of your Sage Payroll software but as an alternative, why not outsource your Payroll to the Nottingham Accounting Solutions Ltd. Payroll Bureau.
Take a look at our Payroll Nottingham Mansfield web page for more details.
We also offer Sage Training for Accounts in Mansfield.
So call Colleen on 01623 550793
Nottingham Accounting Solutions Ltd can help you
• Sage Training
When you have invested in Sage Payroll software, either Sage 50 Payroll or Sage Instant Payroll, it needs to work for your business. We offer one-to-one Sage Payroll Training on your own system for you and your staff. Our Sage Payroll Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage support training as you go through your month end and year end routines at the appropriate times. For more information see our website at Sage Training for Payroll in Mansfield.
• Sage Payroll Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Payroll Software, then set it up and configure it for YOUR business. Save hours of frustration.
• Sage Payroll software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage Payroll products at competitive prices.
• Nottingham Accounting Solutions Ltd can sell you the Sage Payroll software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs.
We aim to put you on the fast track to getting the most out of your Sage Payroll software but as an alternative, why not outsource your Payroll to the Nottingham Accounting Solutions Ltd. Payroll Bureau.
Take a look at our Payroll Nottingham Mansfield web page for more details.
We also offer Sage Training for Accounts in Mansfield.
So call Colleen on 01623 550793
Friday, September 17, 2010
Bookkeeping
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Bookkeeping
So what goes on in the accounting and bookkeeping departments? What do these people do on a daily basis?
Well, one thing they do that's terribly important to everyone working there is Payroll. All the salaries and taxes earned and paid by every employee every pay period have to be recorded. The payroll department has to ensure that the appropriate government and local taxes are being deducted. The pay slip attached to your pay cheque records these taxes. They usually include income tax and National Insurance contributions that need to be paid to the government. Other deductions include personal ones, such as for retirement pensions, holiday pay, sick pay or medical benefits. It's a critical function. Some companies have their own payroll departments; others outsource it to specialists.
The accounting department receives and records any payments or cash received from customers or clients of the business or service. The accounting department has to make sure that the money is sourced accurately and deposited in the appropriate accounts. They also manage where the money goes; how much of it is kept on-hand for areas such as payroll, or how much of it goes out to pay what the company owes its banks, suppliers and other obligations. Some should also be invested.
The other side of the receivables business is the payables area, or cash disbursements. A company writes a lot of cheques during the course of year to pay for purchases, supplies, salaries, taxes, loans and services. The accounts department prepares all these cheques and records to whom they were disbursed, how much and for what. Accounting departments also keep track of purchase orders placed for stock or inventory, such as products that will be sold to customers or clients. They also keep track of assets such as a business's property and equipment. This can include the office building, furniture, computers, even the smallest items such as pencils and pens.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Bookkeeping
So what goes on in the accounting and bookkeeping departments? What do these people do on a daily basis?
Well, one thing they do that's terribly important to everyone working there is Payroll. All the salaries and taxes earned and paid by every employee every pay period have to be recorded. The payroll department has to ensure that the appropriate government and local taxes are being deducted. The pay slip attached to your pay cheque records these taxes. They usually include income tax and National Insurance contributions that need to be paid to the government. Other deductions include personal ones, such as for retirement pensions, holiday pay, sick pay or medical benefits. It's a critical function. Some companies have their own payroll departments; others outsource it to specialists.
The accounting department receives and records any payments or cash received from customers or clients of the business or service. The accounting department has to make sure that the money is sourced accurately and deposited in the appropriate accounts. They also manage where the money goes; how much of it is kept on-hand for areas such as payroll, or how much of it goes out to pay what the company owes its banks, suppliers and other obligations. Some should also be invested.
The other side of the receivables business is the payables area, or cash disbursements. A company writes a lot of cheques during the course of year to pay for purchases, supplies, salaries, taxes, loans and services. The accounts department prepares all these cheques and records to whom they were disbursed, how much and for what. Accounting departments also keep track of purchase orders placed for stock or inventory, such as products that will be sold to customers or clients. They also keep track of assets such as a business's property and equipment. This can include the office building, furniture, computers, even the smallest items such as pencils and pens.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Thursday, September 16, 2010
Sage training for payroll in Nottingham
Sage training for payroll in Nottingham
Nottingham Accounting Solutions Ltd can help you
• Sage Training
When you have invested in Sage Payroll software, either Sage 50 Payroll or Sage Instant Payroll, it needs to work for your business. We offer one-to-one Sage Payroll Training on your own system for you and your staff. Our Sage Payroll Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage support training as you go through your month end and year end routines at the appropriate times. For more information see our website at Sage Training for Payroll Nottingham.
• Sage Payroll Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Payroll Software, then set it up and configure it for YOUR business. Save hours of frustration.
• Sage Payroll software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage Payroll products at competitive prices.
• Nottingham Accounting Solutions Ltd can sell you the Sage Payroll software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs.
We aim to put you on the fast track to getting the most out of your Sage Payroll software but as an alternative, why not outsource your Payroll to the Nottingham Accounting Solutions Ltd. Payroll Bureau.
Take a look at our Payroll Nottingham web page for more details.
We also offer Sage Training for Accounts in Nottingham
So call Colleen on 01623 550793
Nottingham Accounting Solutions Ltd can help you
• Sage Training
When you have invested in Sage Payroll software, either Sage 50 Payroll or Sage Instant Payroll, it needs to work for your business. We offer one-to-one Sage Payroll Training on your own system for you and your staff. Our Sage Payroll Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage support training as you go through your month end and year end routines at the appropriate times. For more information see our website at Sage Training for Payroll Nottingham.
• Sage Payroll Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Payroll Software, then set it up and configure it for YOUR business. Save hours of frustration.
• Sage Payroll software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage Payroll products at competitive prices.
• Nottingham Accounting Solutions Ltd can sell you the Sage Payroll software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs.
We aim to put you on the fast track to getting the most out of your Sage Payroll software but as an alternative, why not outsource your Payroll to the Nottingham Accounting Solutions Ltd. Payroll Bureau.
Take a look at our Payroll Nottingham web page for more details.
We also offer Sage Training for Accounts in Nottingham
So call Colleen on 01623 550793
Wednesday, September 15, 2010
Sage Training for accounts in Nottingham
Sage Training for accounts in Nottingham
Nottingham Accounting Solutions Ltd can help you
•Sage Training
When you have invested in Sage Accounts software, either Sage Line 50 or Sage Instant Accounts, it needs to work for your business. OK you can go on a Sage Accounts training course which are very expensive, very general and usually miles away from your business. We offer one-to-one Sage Training on your own system for you and your staff. Our Sage Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage training and support training as you go through your month end, VAT returns and year end routines at the appropriate times. See our website for more details at Sage Training for Accounts in Nottingham
•Sage Accounts Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Accounts Software, then set it up and configure it for YOUR business. This alone can save you hours of frustration.
•Sage Accounts software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage products at competitive prices.
So:
•Nottingham Accounting Solutions Ltd can sell you the Sage software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs. We aim to put you on the fast track to getting the most out of your Sage Accounts software but as an alternative, why not outsource your accounting and bookkeeping to Nottingham Accounting Solutions.
Take a look at our Accounts and Bookkeeping Nottingham Mansfield web page for more details.
We also offer Sage Training for Payroll Nottingham Mansfield.
So call Colleen on 01623 550793
Nottingham Accounting Solutions Ltd can help you
•Sage Training
When you have invested in Sage Accounts software, either Sage Line 50 or Sage Instant Accounts, it needs to work for your business. OK you can go on a Sage Accounts training course which are very expensive, very general and usually miles away from your business. We offer one-to-one Sage Training on your own system for you and your staff. Our Sage Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage training and support training as you go through your month end, VAT returns and year end routines at the appropriate times. See our website for more details at Sage Training for Accounts in Nottingham
•Sage Accounts Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Accounts Software, then set it up and configure it for YOUR business. This alone can save you hours of frustration.
•Sage Accounts software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage products at competitive prices.
So:
•Nottingham Accounting Solutions Ltd can sell you the Sage software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs. We aim to put you on the fast track to getting the most out of your Sage Accounts software but as an alternative, why not outsource your accounting and bookkeeping to Nottingham Accounting Solutions.
Take a look at our Accounts and Bookkeeping Nottingham Mansfield web page for more details.
We also offer Sage Training for Payroll Nottingham Mansfield.
So call Colleen on 01623 550793
Accounting Principles
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Accounting Principles
If everyone involved in the process of accounting followed their own system, or no system at all, there would be no way to truly tell whether a company was profitable or not. Most companies follow what are called Generally Accepted Accounting Principles, or GAAP, and there are huge tomes in libraries and bookstores devoted to just this one topic. Unless a company states otherwise, anyone reading a financial statement can make the assumption that company has used GAAP.
These GAAP principles are not cut and dried, however. They're guidelines and as such are often open to interpretation. Estimates have to be made at times, and they require good faith efforts towards accuracy. You've surely heard the phrase "creative accounting" and this is when a company pushes the envelope a little (or a lot) to make their business look more profitable than it might actually be. This is also called massaging the numbers. This can get out of control and quickly turn into accounting fraud, which is also called cooking the books. The results of these practices can be devastating and ruin hundreds and thousands of lives, as in the cases of Enron, Rite Aid and others.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Accounting Principles
If everyone involved in the process of accounting followed their own system, or no system at all, there would be no way to truly tell whether a company was profitable or not. Most companies follow what are called Generally Accepted Accounting Principles, or GAAP, and there are huge tomes in libraries and bookstores devoted to just this one topic. Unless a company states otherwise, anyone reading a financial statement can make the assumption that company has used GAAP.
These GAAP principles are not cut and dried, however. They're guidelines and as such are often open to interpretation. Estimates have to be made at times, and they require good faith efforts towards accuracy. You've surely heard the phrase "creative accounting" and this is when a company pushes the envelope a little (or a lot) to make their business look more profitable than it might actually be. This is also called massaging the numbers. This can get out of control and quickly turn into accounting fraud, which is also called cooking the books. The results of these practices can be devastating and ruin hundreds and thousands of lives, as in the cases of Enron, Rite Aid and others.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Friday, August 27, 2010
Basic Accounting Principles
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Basic Accounting Principles
Accounting has been defined as, by Professor of Accounting at the University of Michigan William A Paton as having one basic function: "facilitating the administration of economic activity. This function has two closely related phases: 1) measuring and arraying economic data; and 2) communicating the results of this process to interested parties."
As an example, a company's accountants periodically measure the profit and loss for a month, a quarter or a fiscal year and publish these results in a statement of Profit and Loss. These statements include elements such as accounts receivable (what's owed to the company) and accounts payable (what the company owes). It can also get pretty complicated with subjects like retained earnings and accelerated depreciation. This at the higher levels of accounting in an organization so lets not bother with them here.
Much of accounting though, is also concerned with basic bookkeeping. This is the process that records every transaction, every bill paid, every penny owed and every pound and penny spent and accumulated.
But the owners of the company, which can be individual owners or millions of shareholders are most concerned with the summaries of these transactions, contained in financial statements. The Balance Sheet summarizes a company's assets. A value of an asset is what it cost when it was first acquired. The fBalance Sheet also records what the sources of the assets were. Some assets are in the form of loans that have to be paid back. Profits are also an asset of the business.
In what's called double-entry bookkeeping, the liabilities are also summarized. Obviously, a company wants to show a higher amount of assets to offset the liabilities and show a profit. The management of these two elements is the essence of accounting.
There is a standardised system for doing this; not every company or individual can devise their own systems for accounting; the result would be chaos!
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Basic Accounting Principles
Accounting has been defined as, by Professor of Accounting at the University of Michigan William A Paton as having one basic function: "facilitating the administration of economic activity. This function has two closely related phases: 1) measuring and arraying economic data; and 2) communicating the results of this process to interested parties."
As an example, a company's accountants periodically measure the profit and loss for a month, a quarter or a fiscal year and publish these results in a statement of Profit and Loss. These statements include elements such as accounts receivable (what's owed to the company) and accounts payable (what the company owes). It can also get pretty complicated with subjects like retained earnings and accelerated depreciation. This at the higher levels of accounting in an organization so lets not bother with them here.
Much of accounting though, is also concerned with basic bookkeeping. This is the process that records every transaction, every bill paid, every penny owed and every pound and penny spent and accumulated.
But the owners of the company, which can be individual owners or millions of shareholders are most concerned with the summaries of these transactions, contained in financial statements. The Balance Sheet summarizes a company's assets. A value of an asset is what it cost when it was first acquired. The fBalance Sheet also records what the sources of the assets were. Some assets are in the form of loans that have to be paid back. Profits are also an asset of the business.
In what's called double-entry bookkeeping, the liabilities are also summarized. Obviously, a company wants to show a higher amount of assets to offset the liabilities and show a profit. The management of these two elements is the essence of accounting.
There is a standardised system for doing this; not every company or individual can devise their own systems for accounting; the result would be chaos!
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
What Is Accounting Anyway?
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
What Is Accounting Anyway?
Anyone who's worked in an office at some point or another has had to be involved with accounting. “The Accounts” … they're the people who pay and send out the bills that keep the business running. They do a lot more than that, though. Sometimes referred to as "bean counters" they also keep their eye on profits, costs and losses. Unless you're running your own business and acting as your own accountant, you'd have no way of knowing just how profitable - or not - your business is without some form of accounting.
No matter what business you're in, even if all you do is balance a cheque book, that's still accounting. It's part of even a kid's life. Saving a pocket money, spending it all at once - these are still accounting principles.
What are some other businesses where accounting is critical? Well, farmers need to follow careful accounting procedures. Many of them run their farms year to year by taking loans to plant the crops. If it's a good year, a profitable one, then they can pay off their loan; if not, they might have to carry the loan over, and accrue more interest charges next year.
Every business and every individual needs to have some kind of accounting system in their lives, otherwise, the finances can get away from them, they don't know what they've spent, or whether they can expect a profit or a loss from their business. Staying on top of accounting, whether it's for a multi-million pound business or for a personal bank account is a necessary activity on a daily basis if you're clever. Not doing so can mean anything from a bounced cheque or posting a loss to a company's shareholders. Both scenarios can be equally devastating.
Accounting is basically information, and this information is published periodically in business as a profit and loss statement, or as part of a set of management accounts.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
What Is Accounting Anyway?
Anyone who's worked in an office at some point or another has had to be involved with accounting. “The Accounts” … they're the people who pay and send out the bills that keep the business running. They do a lot more than that, though. Sometimes referred to as "bean counters" they also keep their eye on profits, costs and losses. Unless you're running your own business and acting as your own accountant, you'd have no way of knowing just how profitable - or not - your business is without some form of accounting.
No matter what business you're in, even if all you do is balance a cheque book, that's still accounting. It's part of even a kid's life. Saving a pocket money, spending it all at once - these are still accounting principles.
What are some other businesses where accounting is critical? Well, farmers need to follow careful accounting procedures. Many of them run their farms year to year by taking loans to plant the crops. If it's a good year, a profitable one, then they can pay off their loan; if not, they might have to carry the loan over, and accrue more interest charges next year.
Every business and every individual needs to have some kind of accounting system in their lives, otherwise, the finances can get away from them, they don't know what they've spent, or whether they can expect a profit or a loss from their business. Staying on top of accounting, whether it's for a multi-million pound business or for a personal bank account is a necessary activity on a daily basis if you're clever. Not doing so can mean anything from a bounced cheque or posting a loss to a company's shareholders. Both scenarios can be equally devastating.
Accounting is basically information, and this information is published periodically in business as a profit and loss statement, or as part of a set of management accounts.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
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