The foundations
The accounting equation and double entry are the base of every report.
Read accounting for small business, the accounting equation and double-entry accounting. Choose between cash and accrual in cash vs accrual accounting.
The three statements
The income statement, balance sheet and cash flow statement each answer a different question.
The financial statement guide introduces them, and why they matter explains how owners use them. Lenders ask for them, so keep them current.
Margins and ratios
Ratios turn raw figures into comparable measures of profit, liquidity and debt.
See profit margin, current ratio and debt-to-equity ratio. Track the same ratios monthly so trends show.
Five numbers to review each month
You do not need dozens of metrics to stay informed.
- Revenue and gross margin.
- Net profit.
- Cash balance and the next 30 days of obligations.
- Accounts receivable and how old they are.
- Total debt and monthly debt payments.
Trends matter more than any single month, so keep the same definitions each time.
Accounting and your funding file
Clean books make funding faster and often cheaper.
Funders review bank statements and sometimes financial reports. If you borrow, you want to know the effect on margins before signing. Compare options in term loans or working capital with the payback math done first.
Nothing in this collection requires you to borrow. Many owners read, adjust their habits and never need financing. For those who do, ROI Funder matches each file to funders in our network and lays out the true cost, the payback period and the monthly-equivalent payment before you sign. The requirements are 500+ FICO, 6+ months in business and $20,000+ in monthly revenue, and the application is a few minutes online with no impact on your credit score.
Guides in this collection
- A Practical Bookkeeping Guide for Small Business Owners
- Accounts Payable: What It Is and How to Manage It Well
- Accounts Receivable Factoring: A Practical Guide
- Acid-Test Ratio: How to Calculate and Understand It
- Activity Ratios: How Efficiently Is Your Business Using Its Assets?
- Assets, Liabilities and Equity Explained for Business Owners
- Average Daily Balance: How It Is Calculated and Why It Matters
- Bank Reconciliation: How to Match Your Books to Your Bank
- Bookkeeping Courses: Which Path Fits Your Goal?
- Bookkeeping vs Accounting: The Difference and Which Help You Need
- Business Bank Account Benefits: Why Separate and What to Look For
- Business Operations: What They Are and How to Run Them Better
- Can You Get a Business Loan Without a Business Bank Account?
- Cash Basis vs. Accrual Accounting: Which Should You Use?
- Current Ratio: What It Is and What a Good Number Looks Like
- Debits vs. Credits: What They Mean and How to Use Them
- Debt Service Coverage Ratio: Formula and Examples
- Depreciation Explained: How to Write Off an Asset Over Its Life
- General Ledger Accounts: What They Are and How to Set Them Up
- General Ledger Examples: How Real Transactions Are Recorded
- How to Calculate Debt-to-Equity Ratio
- How to Choose the Best Bookkeeping Software
- How to Close Your Books Each Month and at Year-End
- How to Hire Bookkeeping Help: When, Who and What to Ask
- How to Open a Business Bank Account: Documents, Steps and What to Compare
- How to Read a Balance Sheet for Your Small Business
- How to Record Journal Entries for a Small Business
- How to Set Up a Business Instagram Account That Brings Customers
- How to get net 30 accounts
- How to manage accounts payable
- How to read a balance sheet
- How your business bank account shapes your funding odds
- Inventory Accounting: How to Track and Value What You Sell
- Inventory Turnover Ratio: How to Calculate and Improve It
- Profitability Ratios Every Small Business Owner Should Know
- Small Business Accounting: How to Set It Up and Keep It Simple
- Small Business Tax Preparation: A Practical Checklist
- Tax Credits for Small Businesses: The Ones Worth Asking Your Accountant About
- The Accounting Equation Explained With Simple Examples
- The Current Ratio Formula: How to Calculate It Step by Step
- The Income Statement: How to Read Your Profit and Loss Report
- What Goes on a Cash Flow Statement (With an Example)
- What Is Accounts Receivable and Why Does It Matter?
- What Is Double-Entry Accounting and How Does It Work?
- What Your Accountant Needs to File Your Small Business Taxes
- Working Capital Ratio: What It Tells You About Your Cash Cushion
Frequently asked questions
Do I need an accountant or can I use software?
Software handles routine recording. An accountant helps with taxes, structure and decisions, and is worth hiring as complexity grows.
Which statement matters most?
All three do. If you must choose, the cash flow statement shows whether you can pay your bills.
How often should I review my accounts?
Monthly, at least, with a quick weekly check of cash and unpaid invoices.