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Accounting & Finance Reference Guide

Below you will find a number of common business accounting and finance terms defined. While this is primarily a short list of terms you are most likely to come into contact with as it relates to small business finances, we do help you will

find this useful during your evaluation phase (and even beyond).

  • Accounting Period – the period for which you are reporting – typically used for financial statement preparation purposes. Typical accounting periods are months, quarters, or years.
  • Audit – the process undertaken by your accountant/auditor to check and verify your books and records. Part of this process includes checking that your internal accounting procedures are applied consistently and follow legal requirements.
  • Auditors – the individual or team of accountants who audit your records.
  • Accounts Payable – money owed by your business to its creditors.
  • Accounts Receivable – money owed to your business by its debtors.
  • Asset – something of value owned by the business. An asset can be fixed, current or liquid.
  • Audit – the process undertaken by your accountant/auditor to check and verify your books and records. Part of this process includes checking that your internal accounting procedures are applied consistently and follow legal requirements.
  • Auditors – the individual or team of accountants who audit your records.
  • Balance Sheet – a snapshot taken at a particular time, which shows the business’s assets and liabilities. The excess of assets over liabilities will equal the equity in the business and approximates the value that will remain in the event of liquidation.
  • Balloon Payment – when you take out a loan you will agree to make loan repayments of a certain amount. Some loans have a set repayment figure for an agreed period and then a large one-off final payment – a balloon payment. Balloon payments are common on loans taken out to purchase company vehicles where often the owner has the choice of either making the large payment or returning the vehicle to the loan company.
  • Budgets/Budgeting – an estimated financial plan for a given period of operation. It summarizes projected income and expenditures. A budget should be monitored and revisited monthly and provides a business the opportunity to take action to correct any exceptions identified.
  • Business Plan – a plan that details what you are aiming to do with your business and how you are going to achieve your objectives. This is a key tool in persuading lenders to extend a loan.
  • Capital – the total amount tied up in the fixed and current assets of the business.
  • Capital Expenditure – expenditure on the fixed assets of the business.
  • Cash Flow – money coming into the business and money going out. It is important to control cash flow to ensure that funds are kept within agreed limits.
  • Collateral – property put forward by the borrower which the lender will take if they are unable to pay back a loan.
  • Credit – time allowed purchasers to pay for goods or services supplied to them.
  • Credit Agency or Bureau – provides information about companies’ credit ratings.
  • Credit Rating – a business’s history relating to repayment of past loans or debts.
  • Creditor – a supplier who has provided products or services to the business and has not yet been paid for them.
  • Current Assets – assets which are expected to be converted into cash within one year.
  • Debtor – a customer who has taken products or services and has not yet paid for them.
  • Depreciation – the amount by which the value of items such as equipment, cars, property etc, decreases due to wear and tear and the passage of time.
  • Direct Costs – see Variable Costs.
  • Factoring – a process where a business assigns money owed by customers to a company who immediately pays them a percentage of the invoice value and a further percentage when the customer pays the bill. The factoring company takes a percentage of the overall debts for providing its service.
  • Fixed Assets – assets that are retained and used in the business on a long-term basis.
  • Fixed Costs – overheads which remain the same regardless of the amount of goods sold or produced, for example rent or administrative staff salaries.
  • Gross Profit or Loss – sales less the Direct Costs
  • Guarantee – a third party guarantee to pay your loan if you default on repayments.
  • Indirect Costs – see Overheads.
  • Investor – a funding source that shares in the profit or loss of your business. based on the percentage he owns. Unlike, lenders, investors have potential for both greater reward and greater loss based on the success of your business.
  • Line of Credit – money on loan over a period of time but held as a reserve to be used as required.
  • Liquid Assets – cash or assets which can be quickly and easily converted to cash.
  • Net Profit or Loss – the surplus or deficit after all operating expenses and investment items such as interest (paid or received) and income taxes have been taken into account.
  • Operating Expenses – regular operating expenses of the business operation, excluding investment costs such as interest and income taxes.
  • Operating Profit or Loss – the profit or loss generated by the business operation after the operating expenses have been deducted but before any tax, interest (paid or received) and extraordinary costs have been taken into account.
  • Overheads – also known as indirect costs – operating expenses not directly related to the production of goods or services.

 

Small Business Resources

As you probably already know, there are a LOT of business resources on the Web for small and mid-sized businesses. While it would be impossible to list them all here, we do highly recommend taking a look at the following when you have the time

or the need (or even bookmarking them for future reference):

  • AllBusiness.com – AllBusiness.com helps entrepreneurs, small and growing businesses, consultants and business professionals save time and money by addressing real-world business questions and presenting practical solutions.
  • ASBDC (American Small Business Development Centers)  funded by the SBA, the ASBDC is the “most comprehensive small business assistance network in the United States and its territories. The mission of the network is to help new entrepreneurs realize their dream of business ownership, and assist existing businesses to remain competitive in the complex marketplace of an ever-changing global economy.”
  • Business.gov – “Business.gov is the U.S. Government’s official website for small businesses. Business.gov provides small business owners with information and resources they need to comply with laws and regulations, and to take advantage of government programs and services to help them start, expand and run their businesses.”
  • Entrepreneur.com – Online entity for the popular small business publication. Information to help start, grow or manage a small business.
  • NSBA (The National Small Business Association) – “a national nonprofit membership organization founded in 1937, representing America’s Small Business Companies and Entrepreneurs. Reaching more than 150,000 small businesses, NSBA is proud to be the first and oldest national small-business advocacy organization in the United States.”
  • SBA (Small Business Administration) – “The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.”
  • SCORE – “’Counselors to America’s Small Business’ is a nonprofit association dedicated to educating entrepreneurs and helping small business start, grow and succeed nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).”

 

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Note: the privacy practices set forth in this privacy policy are for this web site only. If you link to other web sites, please review the privacy policies posted at those sites.

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Terms & Conditions

Client must obtain an RMA# prior to sending the merchandise back. A returned package shipped to us without an RMA# will be refused. All returns must be adequately packed and can not be

shipped back using an envelope but rather a box of some type. Shipping & Handling is not refundable. Should you feel your order contains discrepancies, please report it to us no later then 24 hours after receipt of product. No returns on software after 30 Days. Certain items include an unconditional 30 day Money-Back Guarantee and should be returned directly to the manufacturer. Non-software related items must be returned within 7 days and must obtain and RMA number prior to return. Open Retail packages can only be returned to the manufacturer. Global Accounting, LLC will not accept back open retail packages. At our discretion, we reserve the right to deny a return should we determine the product has been tampered with.

latest knowledge base

Here are some of the questions that we often get from our customers.

  • Can I upgrade from a Premium version to a Pro version? No you must stay with the same flavor of software or go higher.
  • What software can you convert from? All if can export the data.
  • Can you do password retrievals for older versions of Peachtree (Sage 50)? Yes
  • Can you handle all of our bookkeeping needs including payroll? Yes
  • Can you do data repair for Peachtree and Sage 50? Yes
  • Can you help us customize our reports in our accounting software? Yes
  • Can you help us find a credit card solution that will work with our current accounting software? yes
  • Can you come out and set up our network for our office? Yes

This is a few of the questions that we often get from our customers.

recent topics

  • Business in usa ?

    We have customers all over the US. Yes we do offer training and will fly to your office to train your staff. Please call for details.

  • Business in All World ?

    We have partnerships with accounting specialist all over the world. If your company needs help, we will first try to match you up with one of our partners that is in your same country.

  • Changes in 2017

    We are adding Bookkeeping and Payroll services to our portfolio of services. We will also offer year end support for a flat rate.

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