Speak My Language – Common Accounting Terms

by | Jul 15, 2020

Trust and Commitment in a Remote Team 

A couple of months ago, I made my first overseas trek since 2017 – not for vacation – but to meet with the rest of the Fritz Financial Solutions team of accountants in the Philippines. It was important to me to show these women the time and attention needed to...

Understanding Financial Accountability  

"I'm not here to give you the good news."  I say that phrase to clients much more often than you might think. Because I ultimately want to celebrate their business's success with them, I’m there to tell them the actual state of their company's finances and guide...

Client Spotlight: Andrea Freidman 

As a business owner, one of the most significant challenges to overcome is work-life balance. This dilemma has only been exacerbated over the last several years and forced many "traditional" industries, such as the legal profession, to change their ways. Long before...

MEET THE TEAM: Joy mercado, Staff Accountant 

Joy Mercado joined Fritz Financial Solutions just over six months ago after completing an accelerator program with TOA Global, our offshore recruiting partner specializing in the accounting industry. Joy has quickly become an invaluable team member doing highly...

Client Spotlight: Isaac Crawford  

Isaac Crawford is a ray of sunshine who went after his dreams and came out on top when he started his own hair salon. He has been in the hair industry for almost 15 years and has serviced hundreds of clients in Chicago. An inspiration to entrepreneurs, we are excited...

MEET THE TEAM: Milen Gomez, Staff ACCOUNTANT

6 months ago, we added a new staff accountant to our team: Milen Gomez. Our newest staff accountant is the best we could ask for with her incredible attention to detail and efficient mindset. She has been an essential part of our continued growth by always putting her...

Starting a business isn’t easy. You start out with an entrepreneurial spirit and a great idea. Before long you suddenly have a million thoughts, concerns, and questions swirling around in your head. Small business accounting tends to take a backseat to other items.

This is understandable, as accounting terminology leaves most with a headache. However, the continued success and stability of your business depends on having your accounts in order. That’s why we took the time to clearly define the most common accounting terms that you will encounter. That way, you can face your Quickbooks account with confidence.

Small Business Accounting Terms

Revenue – This is the money that your company brings in from each sale

Liabilities – This is the money that your company owes. Liabilities are divided into short term(due within one year) and long term(not due within one year.)

Assets – This is a combination of the tangible and intangible property that bring value to your company. Current assets can be converted to cash within 1 year, for instance, money owed to you by customers, while fixed assets don’t convert that quickly, such as furniture and equipment you’ve purchased.

Cost of Goods Sold – This is one of the most important pieces of information that a small business owner should know. This is how much money it costs to produce what you sell. If you know how much it costs you to produce an item, it will guide you in what you should price your product at in order to make a healthy profit.

P&L – Otherwise known as ‘Profit & Loss.’ This report details earnings, expenses and net profits for a given period. This report is also sometimes called Income Statement. Your company is profitable if your revenue exceeds your expenses.

Balance Sheet – This report is a snapshot of of your assets and liabilities at a single point in time, often used, in conjunction with your P&L, to evaluate the performance of your company. If your assets (cash, property, equipment, inventory, etc) are larger than liabilities (debit, payables, etc) then you company is solvent, meaning you have the ability to meet any outstanding financial obligations.

Small business accounting can seem overwhelming, however, we are confident that just knowing a few key terms can provide clarity At My Small Business Pro we take pride in handling the accounting so that our clients are empowered to make important decisions accurately and with confidence.

Trust and Commitment in a Remote Team 

A couple of months ago, I made my first overseas trek since 2017 – not for vacation – but to meet with the rest of the Fritz Financial Solutions team of accountants in the Philippines. It was important to me to show these women the time and attention needed to...

Understanding Financial Accountability  

"I'm not here to give you the good news."  I say that phrase to clients much more often than you might think. Because I ultimately want to celebrate their business's success with them, I’m there to tell them the actual state of their company's finances and guide...

Client Spotlight: Andrea Freidman 

As a business owner, one of the most significant challenges to overcome is work-life balance. This dilemma has only been exacerbated over the last several years and forced many "traditional" industries, such as the legal profession, to change their ways. Long before...

MEET THE TEAM: Joy mercado, Staff Accountant 

Joy Mercado joined Fritz Financial Solutions just over six months ago after completing an accelerator program with TOA Global, our offshore recruiting partner specializing in the accounting industry. Joy has quickly become an invaluable team member doing highly...

Client Spotlight: Isaac Crawford  

Isaac Crawford is a ray of sunshine who went after his dreams and came out on top when he started his own hair salon. He has been in the hair industry for almost 15 years and has serviced hundreds of clients in Chicago. An inspiration to entrepreneurs, we are excited...

MEET THE TEAM: Milen Gomez, Staff ACCOUNTANT

6 months ago, we added a new staff accountant to our team: Milen Gomez. Our newest staff accountant is the best we could ask for with her incredible attention to detail and efficient mindset. She has been an essential part of our continued growth by always putting her...

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