The Accrual method records the income when the sale is made, whether you have been paid or not, and records the expense when incurred, even though it has not been paid. It is a more intricate system to learn, however, more accurately tracks your finances. Preferred by Accountants and CPA’s for management purposes.

Which is best for your Business?

MJB’s Bookkeeping Solutions assists businesses and individuals with their bookkeeping and budgeting needs. Services include but are not limited to installation, setting up chart of accounts, training, and troubleshooting problems. We understand the challenges of owning a business, and are ready to connect you to the answer for all your business questions.

Call us at (805) 433-3577,  follow us on Twitter @MJBSolutions and Like Us on Facebook !

Two Considerations for creating your bookkeeping system:

1. Types of transactions the business enters into and how information about those transactions can be captured
2. Type of financial information the business needs to efficiently manage its operations

The Chart of Accounts (COA), is the heart of every Company file. The COA should include:

Accounts to capture Income, Assets, Expenses, Liabilities, and Equity specific to your business, and be flexible enough to allow for future growth. Every transaction you enter is allocated to the appropriate COA account.

On a regular basis, you, your Bookkeeper, or Accounting Professional should run (3) financial reports to make sure your Company is healthy and on track:

1. **Profit and Loss or Income Statement- Summarizes your income and expenses for a period of time, so you can tell whether you’re operating at a profit or a loss, and where you might trim spending
2. Balance Sheet – Summarizes the financial position of a business as of a specific date – a “Snapshot” of your company. The value of the assets is always exactly equal to the combined value of the liabilities and equity.
3. Statement of Cash Flow – This report shows how your cash position changed over a period of time. Shows cash earned from profit; Where you received additional cash; Where your cash was spent; How cash was provided or used in terms of Operating, Investing, and Financing Activities.

Seeking Funds for your Business? These are THE reports that Lenders want to see.

Are you paying more for office assistance than you need to in belt tightening times?  Why pay three entities when you may need just one?  MJB’s Office Solutions will not only keep your books, we will also assist with back office administrative and low cost marketing projects.

http://content.kiplinger.com/features/archives/10-expenses-you-dont-need.html

http://www.tax.gov/virtualworkshop/

http://score.org

WHY Pay when there are FREE resources. USE that search engine!

Sincerely,

Marla @ MJB’s Office Solutions

• Profit and Loss Statement - This report shows you your income, your operating expenses, and the Net Income or Profit from all your hard work.  Analyzing this report regularly will show where you may be spending too much. 
• Balance Sheet - This report shows your Assets such as  cash, accounts receivable, inventory, equipment, furniture, building, and land; your Liabilities such as short/long term notes, accounts payable,  taxes, and interest;  and your Equity in terms of invested capital, and retained earnings.
• Cash Flow Statement - This report shows how your cash position changed over a period of time. It shows the amount of cash earned from profit, where you received additional cash, and where your cash was spent in terms of operating, investing and financing activities.

 Two documents that are particularly helpful for New Businesses are are the Start-Up Costs worksheet where you will estimate the capital you will need to open your doors,  and the Break-Even Analysis which will show the exact point where you will start making profit after covering all of your operating expenses.

These reports and more are built into QuickBooks accounting software.  If you need assistance with managing the financial aspect of your business, please email MJB’s Office Solutions   for assistance.

Sincerely,

MJB’s Office Solutions

infomjbs@mjbsoffice.net

http://www.vcstar.com/news/2010/jul/20/bill-would-let-credit-unions-increase-loans-to/