West Chicago, IL - Contract cleaners are often pretty good at what they do, getting new clients, and building their businesses. But all too often they stumble when it comes to taking care of the "accounts."
We're not talking about your customers. We're talking about your bookkeeping accounts.
In order to get you more familiar with small business bookkeeping, this month's Business of the Business from Tornado®, manufacturers of professional cleaning equipment, lists the nine most common "accounts" used in accounting and what they mean.
Cash account: This is easy. If you are regularly paid cash for your services, it's to be deposited in a cash receipts journal or a cash account.
Accounts receivable: This is a list of who owes you what. This is money due from customers for services rendered.
Accounts payable: Just the opposite, this refers to the people you owe money to. Often vendors will offer a discount if the bills are paid early. Always note this in your accounts payable journal.
Loans payable: This differs from accounts payable because loans are typically long term and require a set amount to be paid each month; by contrast, accounts payable items are typically paid in full as received.
Inventory: If you also sell products, they must be accounted for and inventoried. This would be tracked in your inventory journal.
Purchases: A separate purchases account lists items you have purchased for your business; as with other expenses, this account helps determine your business profits.
Payroll account: To keep better track of payroll expenses, small businesses are advised to have a separate payroll account. This can be used to pay employees as well as independent contractors.
Owners' equity: This one can be a bit complicated but essentially it lists the share of business assets each business owner may have.
"Many cleaning contractors think of bookkeeping as an unwelcome chore," says Sean Martschinke, marketing manager for Tornado. "But understanding some of the terms makes it easier and helps you run your business more effectively."
About Tornado a Tacony Company
Tornado Industries has been engineering quality cleaning equipment for more than 80 years. The company has a long history of developing innovative products and applying the latest technology to increase productivity, reduce costs, and improve safety. Tornado prides itself on always being on the cutting edge of cleaning solutions. Many of the company's products are manufactured in the United States with domestically and globally sourced parts.
MEDIA CONTACT: ROBERT KRAVITZ