Whether we are business owners or working as part of a company team we are also parents, consumers, and home-owners, and it can sometimes be a struggle to juggle both our business and our personal lives. Being organized at work is a proven way for the small business owner to save both time and money, and it can also help to reduce stress along the way.
Here are four organizational tips that are easy to implement:
If you want to be taken seriously, you need to put thought into what it will take for your idea to actually be a successful business. You need a plan.
A business plan is a document where you outline your concept and strategy for success. It provides an overview of your potential company – what it will do, how it will generate revenue, what expenses it will incur, and who will be involved in running it.
Here are a few reasons why you should write a business plan:
Now that you are armed with the basic knowledge of what an Income Statement is , it’s important to understand what the Income Statement actually tells you.
- The Income Statement reports the main and any secondary sources of income. For example, Services would be the primary revenue in a Bookkeeping Service. If you had a bank account that earned interest, a secondary source of revenue would be Interest Earned.
- The terms used to describe the revenue will provide a clue about the nature of the organization. For example, Services implies a service company; while Sales Revenue implies a retail or wholesale firm.
- The items listed as expenses are expired, meaning they have no useful value left.
- The result of matching the revenues and expenses yields the Net Income. The term ‘net’ implies that the revenues and expenses have been matched, and therefore there is not an over or under statement of the income (loss).
What an Income Statement does not tell you
Accounting reports take the data stored in your books and present it in an easy-to-understand format. There are different types of reports that each serve an unique purpose. Here is the Balance Sheet.
What is a Balance Sheet?
A balance sheet provides insight into a business’s financial situation at a given time and is used to ensure the books are accurate. It consists of three sections: assets, liabilities, and the owners/shareholders equity.