SmallBusinessWorkshopBusinessEssentials:QuickbooksOverviewPresentedby:ShawndelSpaderSpaderGroup,LLC

ImportanceofBookkeeping• Bookkeepingisthelanguageofbusiness• Astandardsetofrulesmeasuringafirm’sfinancialhealth• Requiredforallactivitiesandorganizationswhichutilizemoney

• Assessingacompany’sfinancialstatusiscriticalformakingdecisions• Whatproducts/servicesaretopperformers• Whatexpensesarenecessary/unnecessary• Whatexpensescouldbenegotiatedforalowercost• Setstructuredfinancialgoalsbasedonwhathashappenedhistorically• Setarealisticbudgetbasedonactualincome/spending

AccountingvsBookkeepingAccounting:Referstothecomprehensiverecordingoffinancialtransactions,aswellasanalyzingandreportingthesetransactionstothetaxentities.

Bookkeeping:Referstotheday-to-dayactionsthatarenecessarytorecordthefinancialtransactionsforacompany.- Invoicing - AccountReconciliations- AccountsReceivables -MonthlyFinancialReporting- AccountsPayables - Budgeting

CashvsAccrualAccountingCashBasisAccounting• Recordingincomeandexpensesasyoureceiveorpaythecash.

AccrualBasisAccounting• Recordingtheincomeandexpenseswhenaccrued.Basedontransactiondateinsteadofdatepaid.

WhatisaChartofAccounts?

• TypesofAccountsyou’llseeinyourChartofAccounts

- Assets - Liabilities - Equity- Income - CostofGoodsSold- Expenses/OverheadCosts

• AccountExamples

- IncomeCategories - Bank/CCAccounts - Loans- OwnersEquity - ExpenseCategories

AssetsAssetsincludebothCurrentandLong-TermAssets

• CurrentAssets:• Cash,CheckingAccounts,AccountsReceivables,Inventory

• Long-TermAssets:• NotesReceivables,Tools,Equipment,Land,Buildings

LiabilitiesLiabilitiesincludebothShort-TermandLong-TermLiabilities

• Short-TermLiabilities:(Amountsthataredueinwithinoneyear)• AccountsPayable,PayrollTaxLiabilities,PortionofLong-TermDebtforthatyear

• Long-TermLiabilities:• Notes/BondsPayables,Loans

Equity• Equityaccountsrepresentwhathasbeenputinbytheowneraswellasnetearnings

• Owner’sEquityismadeupofbothOwner’sContributionsandOwner’sDraw

• Retainedearningsincludeswhatthecompanyhasearnedovertheyears

IncomeandCostofGoodsSoldIncome:• Listeachofthewaysyouearnincome

- AdministrativeServices - BookkeepingServices- PayrollServices - ITServices

CostofGoodsSold:• Purchasesthataredirectlyconnectedtoprovidingyourservice/product

- ProductPurchases - FreightIn/OutCosts- ShippingtoClients - SubcontractorLabor- ReferralFees - PurchaseDiscounts

ExpensesandOverheadCosts

Expenses:• Variablepurchases

- Advertising - CharitableContributions - Dues&Subscriptions

- Maintenance&Repairs - Meals&Entertainment - OfficeExpenses- TravelExpenses

OverheadCosts:• Fixedcoststhathappeneverymonthregardlessofyourincome

- Insurance - Mortgage/Rent- Phone - Utilities

FinancialReports

• ThetwomostcommonlyusedreportstoassessabusinessesfinancialstatusaretheProfit&LossStatement(P&L)andtheBalanceSheet

• Profit&LossStatement• Summarizestherevenues,costsandexpensesincurredduringaspecificperiodoftime.Providesinformationregardingacompany’sability(ornot)togenerateprofit.Oftenreviewedmonthly,quarterly,andannually.

• BalanceSheet• Reflectsaspecificpointintimeanddisplaysthevalueofassets,liabilities,andequityofabusiness.Theaccountslistedinabalancesheetareconsidered“permanent”accounts

FinancialReports– Profit&Loss

FinancialReports– Profit&Losscont.

FinancialReports– Profit&Losscont.

FinancialReports– BalanceSheet

10StepsforBookkeepingSuccess

1) Makebookkeepingapriorityandscheduleitintoyourweek/month(Non-Negotiable)

2) Useanaccountingsystemfromtheverybeginning(QuickbooksOnlineRecommended)

3) Stayorganizedwithasystemthateasilyworksforyou

4) Simplifyyourchartofaccountsasmuchaspossible

5) ALWAYS keepbusinessandpersonalexpensesseparate6) Reconcilebankandcreditcardstatementsmonthly7) Establishyourcashflowbyenteringinvoices/billsandpayingaccordingtotheduedate

• Negotiatewithyourvendorstoestablishfavorablepaymentterms

8) Digitizeyourrecords• Saveyourbank/creditcardstatementselectronicallywithallcorrespondingtransactions(Ex.MayBankStatement,savedwithall

receipts/depositsthatarelistedonthatstatementinonefolder)

9 ) Subcontractors– ObtainFormW4assoonastherelationshipisestablished.FormW4mustbeinhandbeforeanypaymentsaremade.

10) Whenyougettoapointthatyoucannolongermanageyourbooksefficiently,ASKFORHELP!

SpaderGroup,LLC– ShawndelSpader,Ownerph:651.319.5259 Email:shawndel@spadergroup.com

http://www.spadergroup.com/http://www.facebook.com/SpaderGroup