Bookkeeping – Bada Business

9 Business Terms Every Entrepreneur Must Know

Summary: Starting a new startup business? Here are nine business terms everyone should know.

Running a startup business involves constant learning. Whether you are starting a business for the first time or have a more established small business, knowing a list of financial terms can help you grow your business.

Being an entrepreneur also means being a learner throughout your life because there is always a new market trend, a new tool to explore, a new challenge to overcome, and a new vocabulary to understand.

Many entrepreneurs often work with the best business motivational speaker and feel they don’t need to equip themselves with the business terms. However, knowing these financial terms will help you understand and negotiate.

Here is a list of business terms and finance terms that will help you find your way to successful small business funding:

1. Accounts Payable

Accounts payable is a financial term representing your small business’s obligations to pay debts owed to suppliers, lenders, and creditors—depending upon the type of credit provided to the company by the lender. It is sometimes referred to as A/P or AP in short.

2. Accounts Receivable

Accounts receivable represents money owed to your small business by others for goods or services rendered. These accounts are labeled assets because they represent a legal obligation for the customer to pay you cash for their short-term debt. They are also known as A/R or AR.

3. Bookkeeping

Bookkeeping is a method of accounting used to time record all financial transactions for the business.

4. Capital

Capital in business terms refers to the overall wealth as demonstrated by its cash accounts, assets, and investments. Often called “fixed capital,” it refers to the long-term worth of the business. Capital can be tangible, like durable goods, buildings, and equipment, or intangible such as intellectual property. Understanding these terms can help you navigate better financial deals even if you are working with the best corporate trainer.

5. Working Capital

It consists of the financial resources necessary for maintaining the day-to-day operation of the business. Working capital, by definition, is the business’s cash on hand or instruments that you can convert to currency quickly. It should not be confused with fixed capital; working capital is another business finance term.

6. Cash Flow

Maintaining tight cash flow control is essential to any small business, especially if it is new since ready cash can be limited until the company begins to grow and produce more working capital.

The business finance term and definition of cash flow refers to the amount of operating cash that “flows” through the business and affects the business’s liquidity. Cash flow reports reflect activity for a specified period, usually one accounting period or one month.

7. Depreciation

Depreciation occurs due to wear and tear. So, the value of any asset can be said to depreciate when it loses some of that value in increments over time. Various depreciation methods are used by businesses to decrease the recorded value of assets. You can also learn a few essential industry-related terms from your business coach.

8. Fixed Asset

A fixed asset is a tangible, long-term asset used for the business and not expected to be sold or otherwise converted into cash during the current or upcoming fiscal year. Fixed assets are furniture, computer equipment, equipment, and real estate.

9. Intangible Asset

Non-physical business assets are considered intangible. These assets can be items like patents, goodwill, and intellectual property.

Whether you are an entrepreneur or not, the business terms mentioned above are essential for everyone. They will help you to understand the diverse concepts in the business world.

The idea of managing a business is more straightforward said than done, and we agree with you. This is why to help you move forward with your business goals, we at Bada Business offer an exclusive Business Coaching Program that comes with Foundation courses, specialized courses, and value-added courses.

To know more, visit: www.badabusiness.com

4 Effective Bookkeeping Tips for Small Businesses

For business to be successful, it needs to record all its economic transactions chronologically without any emission or omission in the entry book. It helps a business to keep a tab on its dealings as well as inflow and outflow of the financial resources. Here, bookkeeping comes into picture. It undertakes the recording of financial transaction and involves preparing source documents for all transactions that are economic in nature, operations, and other dealings of an enterprise. It is not merely restricted to big business houses, forming the foundation of accounting bookkeeping are used in small as well as medium level business firms and non business enterprises. 3 Top Investment Schemes in India to put your money at!

For small businesses as well, a sound bookkeeping is an important prerequisite to keep all the financial transaction in check. It helps in regular valuation of the assets, tab on debtors and the borrowing activities of the firm. Bookkeeping also helps in keeping a check of embezzlement of funds and money laundering by an employee if any. Here are some tips for bookkeeping for small business:

Keep Personal and Firm’s Account Separate

The first and foremost principle of bookkeeping is to have a separate account of the business and the owner for financial purposes. Following the accounting principle of Separate Legal Entity, the accounts for both the entities should be different. All the transaction related to business should be done through enterprise’s account and not the owner’s personal one. 4 Smart Ways to raise fund for your startup without Investors.

Record Transactions Chronologically

One of the most prominent features of bookkeeping is that all the transactions are recorded timely and regularly. Ideally, all the dealing and financial events are recorded in the books of accounts on the day their occurrences. It also includes the accounts which are debited and credited after a transaction and a brief description about it. It helps the business to look for and clear discrepancies if any.

Organise Business Documentation

Various transactions are substantiated with relevant business documents including vouchers, bills, receipt among others. These works as an evidence to the transaction and provide various essential details about it such as the parties to the deal, date and time of the transaction, amount involves other terms and conditions if any.

Review the Records

To ensure that no fraud or miscalculation is taking place, a firm should keep reviewing its records on a regular basis. It helps business to evaluate all its transactions and accommodate for any omission or error in recording. It also enables the owner to keep a tab on expenses, account receivables, debtors, accrued income and other important accounts.