All Fields Required

5 Finance Terms Small Biz Owners Must Know and Understand

5 Finance Terms Small Biz Owners Must Know and Understand

Posted On
March 16
By
SurePayroll
As a small business owner, you will have a lot on your plate. From hiring new employees to bringing in new business, you will wear many hats.

The more you understand about business in general the better off you will be. Even more so, you must have a strong understanding of the financial side of your organization.

Here are five finance terms all small business owners must know and understand:

  1. Accounts payable. These are bills to be paid as part of your business. Until an invoice is paid, it is recorded on your balance sheet as part of accounts payable.
  2. Accounts receivable. This can be considered the opposite of accounts payable, as it includes debts owed to your company. In short, this is the amount of money due to you from a customer who has not paid.
  3. Cash flow. The basic definition of cash flow is as follows: the total amount of money being transferred into and out of a business. As a small business owner, your goal is to have more money coming in than going out.
  4. Expense. There are many common expenses taken on by companies, including but not limited to: advertising, rent, travel, utilities, and salaries. It is imperative to track expenses as many are deductible against taxable income.
  5. Income statement. It does no matter if you call it an income statement or profit and loss statement, the importance of this finance term does not change. This shows sales, costs of sales, operating expenses, gross margin, and profits or losses.

Some small business owners, especially those with a finance background, have no trouble understanding these terms. Others, however, have to spend more time learning about this side of their business.

Every small business owner, regardless of industry and company size, must know and understand the five finance terms above.

14 comments

Leave a comment
  1. Chetan Yadav | Nov 11, 2016

    This is a very fine article as read. Stimulating to read more quality articles of yours. Keep it up with good work hope we will found more excellent posts from you soon.

    <a href="http://www.epicresearch.co/commodity-tips"><b>Commodity Tips</b></a>

  2. Tattoos | Nov 04, 2016
    Nice <a href="http://www.tattoosboygirl.com/">Tattoosboygirl</a>
  3. Tattoos | Nov 04, 2016
    Nice blog. <a href="http://tattoosboygirl.com/">TattoosBoyGirl</a>
  4. <a href="http://www.aep-bahrain.com/apartments-for-sale-in-bahrain/">apartments for sale in bahrain</a> | Nov 03, 2016
    great post. this post gives me a lot of ideas about the things that must be understand by the new entrepreneurs. the quality of the content is very good. i really appreciate your efforts to make this article. 
  5. <a href="http://www.nektalovtotalbody.com">weight loss clinic in nyc</a> | Nov 03, 2016
    thanks for sharing this wonderful article with us. this gives me a lot of ideas. as a businessman i got so many informations which i didnt know. thankyou so much. 
  6. fgf | Nov 03, 2016
    <a href="www.imgur.com">gff</a>
  7. Mili Jacob | Nov 03, 2016
    This post gives ideas on the finance terms that a business man must understand. I am a professional writer in buy dissertation online and you can find that there are more articles to be seen that is helpful for a business man in deatail to reach the heights of success.
  8. Teena Mariya | Oct 29, 2016
    This is very useful post for business mans. I am not related to business area, i am a writer at an online services. Last week we got a new project on "payable and receivable accounts".  perfect essay writing services assigned me to complete the work and i was in search of resources on payable and receivable accounts to start my work. 
  9. Deepavali Festival | Oct 20, 2016

    here is tha all things about happy diwali in india

    http://www.deepavalifestival.co.in/

  10. JohnAlax | Oct 20, 2016

    there are lots of festival in this world. but now its time to indian festival 2016. today i am describe about happy deepavali festival in india.

    <a href="http://www.deepavalifestival.co.in/">Deepavali Festival<a/>

  11. Happy Diwali Greetings | Oct 18, 2016

    A good post . Really enjoyable!

    Happy Diwali Greetings

  12. tanishq | Oct 17, 2016
  13. karan | Oct 06, 2016
  14. Ron Starc | Sep 23, 2016
    I am student of Commerce and now a days my topic going about Accounts receivable, Accounts payable I think you topic will helpful to me for my study help. Now I Pay Someone To Write My Essay because I am too busy in my accounting study but it's also necessary but I don't have much time to do it.

    Leave a comment