There are five bookkeeping accounts you should know and understand:
A contentious customer will be fast to argue or fume over mistakes, technical issues, or even something you as a business didn't see as a problem before. You need to understand what is bothering, get to the bottom of why they are frustrated and use that to find a solution.
- Assets: Anything of value in your business is considered an asset. This includes cash in your bank accounts, your accounts receivable (A/R), balance (since that is money owed to you by customers), as well as inventory, computers, and furniture.
- Liabilities: Any debts owed by your business are considered liabilities, such as your accounts payable (A/P) balance, (since that is what’s owed to vendors), as well as any loans the business owes.
- Revenue/income: Revenue, also called income, is simply any monies earned by your business either through products sold or services rendered.
- Expenses: We’re all familiar with expenses. Your electric bill, your employees’ salaries, and your working lunch with a potential client are all considered expenses.
- Equity: When you subtract your business liabilities from your business assets, you have equity, which reflects your financial interest in the business.