Administrator

Nicole Roach
Marketing Coordinator
BizCentral USA

Key Speaker
Andrea Root
Accounting Coordinator
BizCentral USA
• BizCentral USA: A “One-stop” resource
center for small businesses nationwide!
• Key Speaker: Andrea Root

• Questions

• Recorded Webinar Available At:

http://www.bizcentralusa.com/webinararchive/index.php
I. Getting Started
II. Process
III. Financial Reporting Tools
IV. Solutions
V. Conclusion
VI. Questions
• Some of the information in this presentation is
complicated and generally takes more than
one day to learn. The best way to learn it is
through practice using a work book and real-life
examples.

• We recommend consulting a professional before

making any big financial decisions or changes
• Bookkeeping – basic recording of various
financial transactions.
• Asset – something you currently, or will own in the
future.
• Liability – something you owe to someone else.
• Accounts receivable – money owed by
customers.
• Accounts payable – money owed to others.
• Cash flow – a revenue or expense stream

• Cash receipt – cash received

• Cash disbursement – cash paid

• Revenue – all incoming money

• Expenses- all outgoing money

• Profit/Surplus – when revenue minus expenses
results in a positive number

• Deficit – expenditures were greater than

revenues

• Net – total before deductions

• Gross- total after deductions

• There are two ways to do this:
– Cash basis

– Accrual basis.

• The greatest difference between the two is

how you record transactions.
• There are several ways to keep track of your
financial records.

• I’ll give you a high-level overview of two

methods:
1. Single entry
2. Double entry
• There are two alternatives for the single entry
method:
Date Description Amount
11/2/09 Beginning Balance $1,000.00
11/3/09 Purchased Office Supplies ($100.00)
11/5/09 Performed Repair Service $250.00
11/30/09 Ending Balance $1,025.00

Date Description Revenue Expense

11/5/09 Performed Repair Service $250.00
11/15/09 Paid Electric Bill ($125.00)
November Totals $250.00 $225.00
• The double entry method is the preferred
method of recording transactions.
• This method may seem complicated at first, but
it will make things easier in the long run.
• When done correctly, your books will always
balance
• Every transaction has equal debit and credit
entries
 Debits reflect:  Credits reflect
– Increase in assets – Increase in liabilities
– Decrease in liabilities – Decrease in assets
– Decrease profit – Increase profit
(expense) (income)

Date Accounts Debit Credit

11/2/09 Cash $250.00
Product Sales $250.00
11/3/09 Electricity $125.00
Cash $125.00
• Budgets are important tools that can be used
to create comparisons, analyses, and help
manage your organization
• Budgets are changeable
• If your organization's actual revenues and
expenditures are widely different from your
budget, you need to determine the reason
for the differences
• A variety of financial statements and reports
can be derived from bookkeeping information
• You should become very familiar with these
documents
• You will likely see three primary reports amongst
others
– Profit and Loss Statement
– Balance Sheet
– Cash Flow Statements
• Shows changes in assets throughout the year
• Reflects if an organization is operating with a
surplus or deficit
• Highlights areas of concern
• Is typically required for loans
• Shows the overall value of your organization
• Shows total assets, subtracts total liabilities, and
reports net assets
• Generally reviewed at year end
• Banks or accountants may ask for this
document.
• Provides information about all cash inflows and
outflows from operations and investments

• Shows changes in cash throughout a given time

period (quarter or year)

• It is important to know how much cash your

organization has
• Advantages:
– You can organize the information using your own
system
– You will gain a better understanding of the
process and it can be an excellent learning
experience
• Disadvantages:
– There is a lot of room for error
– You need to be highly organized and stay on
top of the process
– Your accountant may not understand your
system
– Can be very time consuming and stressful
• Advantages:
– Makes entries easier and quicker
– Automatically updates ledgers
– Easily creates financial reports
• Disadvantages:
– You may not understand how the
accounting process really works
– You may become less diligent about keeping
records
– Software can be expensive and may take
time to learn
Advantages:
• Create and manage your income and expenses
• Handle all of your federal and state report forms
• Handle your key documents
• Create Reports
• Ensure compliance with regulations & industry
standards
• Decreases opportunity cost of time spent
supervising, training, & correcting records, entries,
and other flaws
Disadvantages:
• You are removed from the process
• You may not understand how the accounting
process really works
• This can become costly (but doesn’t have to!)
• Financial management is necessary for every
organization
• Several methods can be used to fulfill common
tasks and reach common goals
• Financial management can be complex,
although with the right knowledge, resources,
and tools, it doesn’t need to be stressful, or
overly expensive
• Consult a professional if you have concerns
about your organization's finances
• BizCentral Small Business Services
• Business Plan Writing
• Business Certifications
• Incorporation
• Website Development
• Graphic Design
• Marketing
• Bookkeeping & Accounting
• Nonprofit Services
• Using & Updating Your
Business Plan:
• 6-29-2010 3pm EST
• Contact Us
• Nicole Roach: Nicole@bizcentralusa.com
• Andrea Root: Andrea@bizcentralusa.com
• Visit www.BizCentralUSA.com or Call 407-857-9002

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