In the accounting and bookkeeping world, it’s important to understand what accrual accounting means and how important it is during a company’s most busy sales quarter.
What’s accrual? It’s when you account for each financial transaction as it happens—every time you sell a product or service, you record it. In accrual bookkeeping, you record every transaction no matter when payment occurs.
Accrual bookkeeping is standard practice for most small businesses. Actually, since we’re headed for the holidays, this is the time to really look at your sales and not miss anything when they happen.
Imagine this: a small gift basket company, which takes in 30 orders a day in the off season, starts gaining to between 60 to 80 sales a day during the holidays. This doesn’t mean that each day the company would gain 60 to 80 payments; indeed, payment for all the gift orders will come in at variable times. However, if the company owner doesn’t keep track of each order as they accrue, it’s highly likely that he or she will lose the thread of how many sales and financial transactions he’s making per day, per month, even for the quarter. It’s good to keep track of these and record daily!
If you’re swamped during the holidays and aren’t able to keep up with recording your accrued sales, please feel free to call on us experts!
Here’s a gift idea for your clients; why don’t you buy a gift certificate for bookkeeping or other services from Facets Business Solutions for your most prized clients. We’re happy to offer a gift certificate for any amount you’d like to purchase. Please email us for more information: firstname.lastname@example.org