Any ACH, check, deposit, paycheck, vendor payment, or debit/credit card charge is a transaction. The accrual method (when a transaction happens w/out payment) or the cash method (cash is received) can affect the company’s financial/tax reporting.

Presents a summary of the company’s financial activity over a certain period of time. These reports show the company’s financial position, cash flow, and are useful for business owners, creditors, and investors. Conveying this information is key.

A balance sheet is like a financial snapshot of a company, giving you a quick look at its assets, liabilities, and shareholders’ equity at a specific moment. Think of it as a financial portrait, with one side listing what the company owns (assets) and the other side showing what it owes (liabilities and equity).

Matching the balances on your bank statement with the corresponding entries in your accounting records. Banks do make mistakes, and one of the best ways to find those mistakes is by reconciling all of your bank accounts weekly or monthly.

Cash flow pertains to the movement of money into and out of your business, encompassing both income and expenses. While the goal is to maintain a positive cash flow, conventional bookkeeping methods make it challenging to consistently monitor your cash flow.

Expenses encompass the costs incurred to sustain your business, ranging from goods sold to rent, office supplies, and payroll. These expenses are recorded on your profit-and-loss statement and can be utilized for tax deductions.