Bookkeeping terminology you should know

Posted on:May 29, 2020

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Keeping on top of your business finances is important for many reasons. Not only does it mean that you don’t have a backlog of work to do before your chosen Accountants Chippenham way such as https://chippendaleandclark.com/ file your end of year returns, but it also helps to give you an indication of how your business is doing in terms of profits, cash flow and tax position projections.

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Here are some of the key terms that you need to be aware of:

Account Payable – this is money owed by your business to other businesses that have provided you with goods and services.

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Accounts Receivable – this is money that is owed to your business by others for goods and services that you have provided.

Balance Sheet – this is where your business financial position is reported and looks at your assets, liabilities and any capital that is in the business. It gives you an overall snapshot of how your business is doing.

Chart of Accounts – this is a list of all the accounts that are used in your general ledger. You can have this split in a number of different ways and may have accounts for each of your key services or product types so you can see what is making you money.