Payroll & Bookkeeping Blog

Organize accounts payable invoices by sending every bill to one intake point, verifying it against the purchase order or delivery receipt, coding it to the correct account in the chart of accounts, and filing it under a consistent naming format built from the vendor name, invoice date, and invoice number. Payment happens after those four steps, never before. Most advice on this subject assumes a business already has an accounts payable department, a purchase order

Bookkeeping services include recording every business transaction, reconciling bank and credit card accounts, tracking accounts payable and accounts receivable, closing each month, and preparing financial statements a tax preparer can file from. Most providers add year-end 1099 preparation, sales tax returns, fixed asset and loan schedules, and payroll support to that core list. Scope varies more than most business owners expect. One provider records transactions and stops there. Another handles the full monthly close, the

You manage accounts receivable effectively by setting credit terms in writing before work starts, invoicing the day the work finishes, following up on a fixed schedule instead of when a balance starts to worry you, and tracking aging and days sales outstanding so problems surface while they are still small. Below we cover what receivable management looks like inside your books, what belongs on a customer ledger, how to set terms and assess credit, the

The difference between accounts receivable and accounts payable is direction. Accounts receivable is money your customers owe you, recorded as a current asset. Accounts payable is money you owe your vendors, recorded as a current liability. Below we cover how one transaction creates both accounts at the same time, the journal entries from each side, how the two appear on your balance sheet, how the AP and AR processes differ step by step, where invoices

  A general ledger is the central record of every financial transaction your business makes, sorted by account. A general ledger holds five categories of accounts, assets, liabilities, equity, revenue, and expenses, and it is the record your balance sheet and income statement are built from. Below we cover what a general ledger account is, how accounts get numbered, what a ledger actually looks like on screen, how posting and balancing work, how the ledger

Accounts receivable is the money your customers owe you for goods or services you already delivered but have not been paid for yet. Accounts receivable sits on your balance sheet as a current asset, and most invoices carry terms of 30 to 60 days. Below we cover how accounts receivable is classified, why it is not the same thing as revenue, how the entries are recorded, the six-step accounts receivable process, how aging reports and

Accounts payable is the money your business owes vendors and suppliers for goods and services you already received but have not paid for yet. Accounts payable sits on your balance sheet as a current liability, and most payable balances come due within 30 to 90 days. Below we walk through how accounts payable is classified, how the entries are recorded, what the six-step accounts payable process looks like, how to reconcile and measure your payable

Accounts receivable is money your customers owe you for products or services you have already delivered. Accounts payable is money you owe your vendors or suppliers for products or services you have already received. Together, they represent the two sides of your business’s cash flow: money coming in and money going out. Getting both right in your books is critical for accurate financial statements, healthy cash flow, and smart decision-making. This article explains what each