QuickBooks is easy to use, intuitive and flexible. It was designed to give business owners, with little or no accounting experience, a way to have financial structure and compliance for their business But it is not an accounting manual or class or tutorial.
At Off-Site Business Services, two Certified QuickBooks ProAdvisors are on staff. Still, it helps to understand the basics. Here's a look at some terms and phrases you should understand.
Account. This refers to the accounts in your Chart of Accounts: asset, liability, owners' equity, income and expense.
Accrual Basis. This is one of two basic accounting methods. Using it, you record income as it is invoiced, not when it's actually received, and you records expenses like bills when you receive them. Using the other method, Cash Basis, you would report income when you receive it and expenses when you pay the bills.
Cash Flow. This refers to the relationship between incoming and outgoing funds during a specific time period.
Equity. This refers to your company's net worth. It's the difference between your assets and liabilities.
Payroll Liabilities Account. QuickBooks tracks federal, state and local withholding taxes, as well as Social Security and Medicare obligations, that you've deducted from employees' paychecks and will remit to the appropriate agencies.
Sales Receipt. This is how you record a sale when payment is made in full during the transaction.
Statement. You'll generally use invoices to bill customers, but you can also send statements, which contain transaction information for a given date range.
Trial Balance. This standard financial report tells you whether your debits and credits are in balance. Should you run this report and find a problem, let us know right away.
Vendor. With the exception of employees, this term refers to anyone who you pay as a part of your business operations.
These are just a few of the terms you should recognize and understand. We hope you'll contact Off-Site Business Services when you need help understanding how the accounting process fits into your workflow.