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Accounting Terms: Profit, Receipts And Retirement

As we've covered previously, there are a lot of accounting terms you'll need to familiarise yourself with if you'd like to manage the accounts of your own small business. Fortunately, if you're insistent on doing the work yourself, you can rely on us to help you get through it, and today, we've got a good selection of terms for you to learn.

Everyone Is Interested In How Much You've Earned In Any Given Accounting Period
Legally, you'll need to declare your income at regular intervals, both for the benefit of the public, and the government. To do so, you'll need to create income statements, or, as they're better know, a profit and loss statement. These reports show the flow of money through a business in the given accounting period, including every expense and every piece of generated revenue. When you combine this report with the cash flow statement and balance sheet of the business, you'll be able to determine a fairly comprehensive idea of the business' financial health, as well as their capacity to produce profit.

Leaving A Breadcrumb Trail Back To The Gingerbread House
When a business transaction takes place, it's fairly important that receipts change hands, too. It might be something that you've paid for with money, or it might be a service that you provide. Either way, when some financial gain is made or lost, there should be a receipt in writing to help document that transaction, which can be quite important for small businesses come tax time. Without receipts, businesses might have a hard time making some deductions on their yearly tax returns, which can be fairly important for helping keeping costs down and profits up.

Consider What's Left Of The Pie Once Everyone Gets Their Fingers In It
When your business generates money, there seems to be a hundred and one places for it to go before it ends up in your own pocket. You need to pay overhead costs, purchase new materials, and, of course, you need to pay any shareholders their agreed upon dividends, whatever that might look like. If you do need to pay dividends, the amount of money you're left with afterwards is then known as your retained earnings, or your earnings surplus.

Not Too Keen On Managing The Chaos Yourself?
It's okay if you've decided not to manage your own accounts after reading these guides. It's an incredibly complicated task to maintain the accounts of any business, and when you're busy running your own business, you probably don't have the extra time to also dedicate to the accounts. Thankfully, if that's the case, you can instead rely on the leading small business accountants, the M.A.S Partners, to help you. Our team has years of experience working in accounting, and we're able to help make sure every business is kept running smoothly and achieving the best results possible. To speak with our team of small business accountants in Sydney about what we can do for you, call us on (02) 9211 5000.

 
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