Attention Small Business Owners:

If you don't have good bookkeeping methods in place



"3 Steps to Mastering your Finances"


If you own a small business, you understand the importance of understanding your businesses cash flow. In my 35 Years as a bookkeeping consultant I've consistantly shown my clients proven, time tested methods that save time, money, and

My proven techniques will:

  • help you obtain information in a usable format in the fastest and easiest way possible
  • streamlining your bookkeeping process while keeping the integrity needed to provide you with reports that help you manage your business better
  • keep it simple and efficient


Our website is here to help you make the overwhelming task of bookkeeping easier. We give you suggestions on streamlining your bookkeeping process while keeping the integrity needed to provide you with reports that help you manage your business better. We will provide you with easy to understand reports that can keep you in control and let you know where your problems are.

Our over 35 years of experience has given us an opportunity to help many business know the benefits of timely financial information and we want to pass that information on to you. We believe in helping you obtain information in a usable format in the fastest and easiest way possible. We help you keep it simple and efficient. We will help you with suggestions that have been proven through repeated use of our many clients. We can help you make your numbers come alive.

We are always delighted and energized when our readers send us fascinating techniques they use to make an overwhelming task easier and more rewarding and we love to pass them on to our readers. Our readers and we look forward to receiving your suggestions on categories you would like to know more about and techniques that you use to simplify your bookkeeping. Please e-mail us with your suggestions to

AS EASY AS 1-2-3

Are you too busy, paper work constantly piling up on you? Are you losing sight of your overall plan and letting opportunities slip by? Wonder where your business will go next? Not able to produce the desired results to help your businesses grow. You need to have a complete and simple way to get the information you need without delay?

Having a simplified system that will streamline and restructure your financial information into manageable segments can give you back the control of your finances and provide you with the edge needed to help your business grow.

These ď3 Easy Steps To Mastering Your FinancesĒ are designed to simplify the process of recording your financial information. It will give you everything you need to know to shorten the time and management needed to keep your records current. Whether you do it yourself or have someone do it for you these 3 easy steps will help make the process more efficient and avoid unnecessary mistakes.

Step One:


Your chart of accounts is used to organize your business information and produces your financial statements. It categorizes all the activities, in your business, by name and or number. These classifications are used in your financial reports to help you see whatís going on in your business.

Here are some samples of categories in your chart of accounts:

Your company: uses a phone Telephone expense

buys items to resells Inventory

sells those items Sales

buys paper goods Office supplies

hires employees Payroll expense

Payroll taxes

Health insurance

Pension fund

Well you get the idea. Your Chart of Accounts are all the categories used to organize your businessí financial information. All of these categories are the building blocks to producing financial reports that will help you clarify your vision and obtain your goals.

The idea here is to keep it simple. Use as few categories as possible to give you the most important information needed. Click here for a simplified sample of a basic chart of accounts

Remember, whether you do your own record keeping or have someone else do it for you, keeping your entries within the guidelines of the chart of accounts you have set up helps you or your bookkeeper be more efficient in recording your information. It sets guidelines for how everything is going to be recorded avoiding miss-classification and resulting in more accurate reporting. Make sure you analyze any additions you want to make to it. Ask yourself, ďHow will this new category enhance my ability to manage my finances better?Ē If you can answer the question or the effect will not have a significant impact on your reporting why do it?

Step Two:

Easy to understand accounting terms

All that talk about assets, liabilities, equity and cash flow, book values, profit margins, and working capital can be too much to handle. Well the good news is, you donít have to understand every little detail of accounting to understand and easily produce reports that keep you in control. Here are some of the more widely used terms defined in plain English.

Revenue: You sell a product or perform a service that you bill for Ė thatís revenue. Itís your sales and other sources of income.

Expenses: You know the old saying ďit takes money to make money: thus expenses were born for gas, electric, office supplies, postage, maintenance, accounting fees, telephone, etc.

Cost of Goods Sold: (AKA CGS) itís just a fancy way of separating the expenses that are directly related to the sale or services. Your customer wants to buy a widget from you. The amount that you pay for that widget is a direct cost of the sale or CGS.

If you are in a service business (such as computer repair and maintenance) in addition to any computer parts that may be used is performing your service, the employees pay that executed that service is also part of CGS.

Assets: If your company owns it and it has a value itís an asset. Itís what you own or have and what others owe you. This includes, cash, securities, accounts and or loans receivable, inventory, and other tangible properties or intangible items such as goodwill.

Liability: Any money your company owes. This includes accounts payable, notes, loans, taxes payable, and yes, even credit cards payable.

Accounts Payable: a list of all the money you owe for the purchase of goods or services and to whom you owe it to. Picture a credit cared statement that lists all the charges you made the previous month, well your accounts payable is a similar thing expect it show all bills that have not been paid to date.

Accounts Receivable: A list of all money owed to your company for the sale of goods or services and who owes it to you. One important thing to remember, just because people owe you money that is not a guarantee that you will get it. The older your invoices become the harder they are to collect so monitor your receivable carefully and often.

Equity: The easiest way to explain it is: itís your companyís net worth after subtracting all liabilities (all you owe) from all your assets (all you own). The good news: your Accountant will set it up and make sure itís maintained correctly.

Retained Earnings: A collection of profits and losses from the day your company started that have not been distributed to yourself and other stockholders. This is another area of your business finances that your Accountant will maintain.

Income Statement: (AKA Profit & Loss Statement) Tells you what has happened over a period of time; whether you made a profit or a loss.

Balance Sheet: Tells you how financially strong your company is by showing you what your company owns verses what your company owes on a particular date. Itís a snapshot in time, much like a report card for your business on a given date.

For additional definitions click here

Step Three:

Break your work into easy to manage segments

Revenue: Processing your invoices and collecting money due is one of the most important aspects of your business.

Having a good invoicing systems and setting up payment terms is key to a healthy cash flow. When customers clearly know how much they have to pay and when they are more likely to pay on time.

Your terms should include: price, delivery arrangements, payment terms, sales tax rate, and interest and or debit recovery charges on late payments.

Time is also an issue when billing a customer. The longer you wait the longer it takes you to get paid. Make sure you have a billing system that lets you bill as soon as the product is shipped or the service completed.

Sometimes customers pay on time, some have to be reminded and some have to be threatened. Waiting for you money can cost you, so donít let too much time go by without contacting a late payer. Provide reminders in short intervals, at least every two weeks. You can call, e-mail or snail mail but some form of communication must happen. The sooner you ask the sooner you get paid.

If you are not using an Accounting program like QuickBooks itís time to start now. It will help tremendously with your process. With programs like QuickBooks your work is quicker than ever on tasks ranging from invoicing, payments, bill paying, payroll and more. With QuickBooks, and many other similar programs, repetitive tasks such as entering customer, vendor and employee information is done just once and the program will do the rest with pre-filling common forms such as invoices, checks, etc., saving countless hours of repetitive data entry.

The reports that can be generated can save you hours of having to hunt through piles of paper to locate specific information and to be able to quickly see the big picture of what you business is doing. With a few key strokes you can obtain information on the sales you did for any period of time, what your expenses are, how much business you did with any one of you customers an the list goes on and on.

Payables: This process makes bill paying almost painless.

Most companies can break their payables up into 2 segments: the bills that can be issued and payment made and received by the vendor between the 1st and the 15th of each month and those that can be issued and sent between the 16th and the end of the month. This allows you to set aside a time bi-monthly for you or your bookkeeper to process all the bills.

Look at each bill when they come in and verify that the price is correct and the product or service was satisfactorily received. Mark the bill as payable or mark any adjustments that may be needed and assign a category from your chart of accounts. Whether you pay your own bills or have someone else do it for you, the pre-qualification and assignment of a category makes the process simple and more accurate.

Create two ďto be paidĒ files, one for each of the bill paying periods and place all your bills to pay in the one of the folders until it is time to pay them. Of course unexpected situations can arise and a check may have to be issued immediately but for the most part bill payments can be issued twice a month. You can then mail your payments timely as the due date nears. If you place the date due on the top right corner of the envelope to be mailed (where the stamp is placed) it will help remind you when the payment has to be sent. If you pay your bills online, you can still process all the paperwork marking the bills with the date to be paid and the category to assign it to and use a monthly tickler file to make sure you process the online payment on time. By consolidating your billing paying process this way you can save time and avoid late payments.

For credit card charges make sure you create an envelope and put in all the charge receipts for the month. If you order online or phone print the acknowledgment or jot down the information on the monthly envelope. When your bill is received record on the statement the category for each entry as you are verifying their validity and approve the bill for payment. Circle the due date to assure timely payment and make sure who ever is going to pay the bill knows how much you want to pay against it. Mark any charges that were returned or should not be paid with specific instructions if you are not taking care of them immediately. Now it is ready for one of the ďto be paidĒ file.

If one of the bookkeeping functions that your company has to do is payroll, if you donít have a payroll company doing it for you, you should. It is much more cost effective then you or your bookkeeper doing it. You can use one on of the national payroll companies or look into some of the local smaller companies. If find they are usually less expensive and also much more attentive to your needs. For more information on payroll services click here.

CBA Business Services631-846-3369 contact by email
217 Birchwood Rd, Medford, New York 11763

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