Bookkeeping Basics for Entrepreneurs
While running a business, you need to know everything about your business s finances, not just your bank account balance.Basics of Bookkeeping will help you keep the books up-to-date and…
Start with this guideAccounting basics guides
Plain-English explanations of the accounting ideas a small business owner meets every month.
About these guides
Start here if you keep your own books or want to understand what your accountant sends you. The guides explain bookkeeping and journal entries, the chart of accounts, assets and liabilities, the balance sheet and the profit and loss statement, receivables and payables, bank reconciliation, closing the books, cash flow, and inventory accounting, with worked examples.
All Accounting Basics articles
122 articles, newest first
EBITDA vs EBIT vs net profit: key differences, formulas and examplesEBITDA vs EBIT vs net profit explained with formulas, a worked ₹10 lakh example, margin calculations and why EBITDA is…
Bad debt expense: how to calculate, record and recover unpaid invoicesLearn how to calculate bad debt expense, record write-offs and allowances, handle recoveries, and when Australian GST…
Inventory Shrinkage: How to Find and Record Stock Losses in Your AccountsLearn what inventory shrinkage is, how to calculate it, and record verified stock losses with a journal entry, plus…
Customer Advances vs. Unearned Revenue: How to Record Payments Before DeliveryCustomer advances vs unearned revenue explained for small businesses, with balanced journal entries, examples, and when…
Trial Balance Explained: Format, Examples, Errors & How to Prepare OneA trial balance checks that total debits equal total credits. Learn its format, a worked example, the errors it…
Prepaid Expenses Explained: What They Are and How to Record ThemPrepaid expenses are a current asset you expense over time. Learn what they are, why they count as an asset, and how to…
Vendor Scorecard: 10 Metrics to Evaluate Supplier PerformanceVendor scorecard guide: learn 10 key metrics to evaluate supplier performance, with formulas, scoring tips, examples,…
How to Calculate Product Profitability: A Practical Guide for Small BusinessesProduct profitability measures the revenue retained from a product after subtracting the costs attributable to that…
Accrued Expenses vs Accounts Payable: Key DifferencesAccrued expenses vs accounts payable explained with examples, key differences, accounting treatment, and tips for…
Operating Expense Ratio: How to Calculate & Improve ItLearn how to calculate Operating Expense Ratio, interpret your results, identify cost drivers, and improve operating…
Cash Flow vs Profit: What’s the Difference for Small Businesses?Understand cash flow vs profit, the key differences between them, and why both matter for managing a successful small…
What Is Working Capital and Why Does It Matter for Small Businesses?Learn what working capital is, how to calculate it, why it matters, and practical ways small businesses can improve…
How to Create a Cash Flow Forecast for a Small BusinessLearn how to create a cash flow forecast for your small business, track future cash and spot potential shortages before…
How to Read a Profit and Loss Statement: A Practical Guide for Small BusinessesLearn how to read a profit and loss statement, understand key figures, spot trends and make better business decisions.…
The Must-Know Breakeven Number Before You Price Any ServiceBefore setting a price, know your breakeven: fixed costs ÷ contribution margin. A practical guide for service…
How to Create an Accounting Workflow for a Growing Small BusinessLearn how to build an efficient accounting workflow for a growing small business, from invoicing and expenses to…
Cash vs Accrual Accounting in Australia: Which Method Should Your Business Use?Cash vs Accrual Accounting in Australia: Compare both methods, understand GST implications, and choose the right option…
Dead Stock Explained: How to Identify, Reduce and Prevent ItDead stock explained with practical tips to identify obsolete inventory, reduce losses, and improve inventory…
Financial Red Flags Every Small Business Owner Should Never IgnoreLearn the financial red flags every small business owner should spot early to improve cash flow, reduce risks, and stay…
Accounting for Advertising Agencies: Challenges, Best Practices & SolutionsLearn how accounting for advertising agencies improves cash flow, profitability, invoicing, and financial management…
Business Budgeting for Small Businesses: How to Create a Budget That Actually WorksMaster business budgeting with this practical guide for small businesses. Learn how to plan expenses and improve…
How to Build a Monthly Finance Dashboard for Your Business (And the 12 Metrics You Should Never Ignore)Learn how to build a monthly finance dashboard and track the 12 metrics that reveal cash flow problems before they…
Bank Reconciliation Explained: Why Every Business Should Reconcile Bank Transactions RegularlyBank balance and books don't match? This guide explains bank reconciliation step by step so you can spot the errors…
Vendor Management Best Practices for Small Businesses: How to Build Strong Supplier RelationshipsFollow these vendor management best practices to cut costs, prevent stockouts, and keep suppliers accountable. (2026…
Chart of Accounts Explained: How to Structure Your Business Accounts CorrectlyChart of Accounts explained for small businesses. Learn how to structure accounts for accurate reporting and…
Accounts Payable vs Accounts Receivable: What Every Business Owner Should KnowLearn the difference between accounts payable and accounts receivable, how they impact cash flow, and best practices to…
Inventory Reconciliation Explained: Why Your Stock Never Matches Your ReportsBecause when inventory reconciliation isn't happening consistently, every report becomes questionable. And once…
What Financial Reports Should Small Business Owners Review Every Month?Learn which financial reports small business owners should review monthly to track profits, cash flow, and…
Common Inventory Management Mistakes Small Businesses MakeCommon inventory management mistakes can lead to stock mismatches, cash flow issues, and lost sales. Learn how to avoid…
How to Close Books of Accounts: A Step-by-Step Checklist for SMEsClose books of accounts with this practical checklist for SMEs covering reconciliations, GST, TDS, inventory, and…
The Easiest Way to Reduce Accounting Workload (Without Hiring More People)Reduce accounting workload with conversational AI. Automate reports, get real-time insights, and save hours each week.
How Small Businesses Should Manage Accounting Daily (Simple Workflow Guide)Learn how small businesses should manage accounting daily with a simple workflow to track expenses, invoices, and cash…
Financial Year-End Checklist for Businesses in India (2026 Guide)Ready for March 31? Follow this 2026 financial year-end checklist for India to reconcile GST returns, clear TDS, and…
Is Cash an Asset? The Ultimate Guide to Understanding Cash in Your BusinessIs cash an asset? Learn why cash is a current asset, where it appears on the balance sheet, and why it matters for…
Operating Income: Definition, Examples & CalculationWhat is operating income? Learn the definition, formula, and simple examples to calculate it and track business…
The Founder’s Guide to Startup Accounting (2026 Playbook)A practical 2026 guide to startup accounting for founders. Learn reports, cash flow basics, and simple systems to keep…
How to Calculate Retained Earnings (Formula and Examples)At ProfitBooks, we often see business owners staring at their balance sheet with one recurring question: "What's this…
How Much Does a CPA Cost? A Realistic Guide for Business OwnersHow much does a CPA cost? Get a clear breakdown of fees, factors that affect pricing, and what businesses can expect in…
What Is a Statement of Accounts?Not sure what a statement of accounts is? It’s a simple summary of invoices and payments that helps avoid confusion and…
What Are Current Assets?Current assets are cash, stock, and other items that convert quickly to money. Understand what qualifies and why it’s…
What Type of Account Is Unearned RevenueUnearned revenue is money received before delivery and treated as a liability, not income. Learn why it matters and how…
Difference Between Purchases and Expenses [A Simple Guide]In this guide, I'm going to walk you through the difference between purchases and expenses in the clearest terms I can…
What Is Net Sales?That's the difference between gross sales and net sales. And if you don't understand it, you're flying blind.
What is Equity in Accounting?What is equity in accounting for a small business?
What is a Capital Account: How Does It WorkLearn what a capital account is and how it works in business. Simple explanation with examples to help you understand…
How to prepare Profit and Loss Statements?Learn how to prepare profit and loss statements. Track revenue, expenses, and profit to make smarter financial…
How AI is Revolutionizing Bookkeeping for Small Businesses and Accounting Professionals in 2025Discover how AI in bookkeeping and India’s GST 2025 reforms simplify accounting. Learn how automation saves time, and…
Fund Accounting 101: How Nonprofit Software Simplifies Restricted FundsDiscover how nonprofits can manage restricted funds better with fund accounting software, improve ROI, and apply…
How to Do Secure Financial Data Sharing with Your AccountantLearn how secure financial data sharing keeps your business safe and helps you work smoothly with your accountant…
Financial Planning for Seasonal Sales in Online Clothing BusinessesThis article provides strategies & financial planning tips to help online clothing businesses maximize profits and…
Guide to Inventory Management For WholesalersGuide to Inventory Management For Wholesalers is how you monitor, track, and govern your inventory and the flow of…
Saas Accounting Challenges & How To Solve ThemThis article explores Saas accounting challenges that companies face, delving into cloud accounting costs,…
5 Practices To Make Your Accounts Payable Process SmootherAccounts payable process involves recording and processing the transactions made during the supply of goods and…
Retail Inventory Management Methods & TechniquesIn this article, we'll go through all the industry-standard inventory management methods that solve complex inventory…
Wholesale Price Method in Branch AccountingLet's unravel the intricacies and advantages of adopting the wholesale price method in branch accounting, in this guide…
Retail Inventory Management Best PracticesIn this article, we'll go through what retail inventory management is and what the best practices for retail inventory…
Introduction To Understanding Accounts Payable (AP)All businesses or organizations have two indispensable financial flows: Expenses and Revenue. The expenses part is what…
7 Online Bookkeeping Service ProvidersDiscover the top 7 online bookkeeping service providers in this article, that can help you keep your financial records…
How To Track Small Business Expenses – 4 Easy StepsA small business always needs to be ahead of the business expenses, which must be tracked, and this article will show…
3 Golden Rules of Accounting – Types & ExamplesAccounting for businesses is like a chore; it just has to be done! If that's the case, the rules of accounting…
7 Effective Ways To Account For Business Credit Card.Few simple steps on how to account for credit card transactions in ProfitBooks accounting software. It also explains…
Cash Flow Statement: Explanation and ExampleA very important metric that every business owner should be well aware of is the metric of managing once cash flow.…
How To Manage Cash Flow In Small BusinessTips to improve and manage cash flow in small business. Learn about best practices for positive cash flow, how to fix…
30 Cost Cutting Ideas To Survive Cashflow CrunchHere is a list of 30 simple & easy to implement cost cutting ideas that can help you save money in your business. Best…
12 Things Every Business Must Do Before Financial Year EndHere is a financial year end checklist for Indian businesses. Income, expense & tax related obligations every business…
How to Prepare an Income Statement?We refer to an income statement as a financial statement that provides insight into a company's financial performance.…
What are Liabilities in accounting?Liability in accounting are a tricky subject for a lot of business owners, espacially in small business owners. This…
How To Close The Books For an Accounting Period? in 2023This is done so that these accounts do not affect the upcoming accounting periods. The balance from these accounts is…
The 5 Essential Duties Of An AccountantThe duties of an accountant revolve around financial record keeping, decision-making, and other aspects that can ensure…
What is a Profit and Loss Report?Profit and Loss reports are very crucial for a business no matter how big or small the operation is. with the help of…
What Is An Accounting Journal? – Comprehensive GuideSeveral unaccounted transactions cause an imbalance in financial statements. Accounting Journal is one such document…
What is a Debit and Credit?(revised in 2023)Debit and Credit are the most basic elements of accounting if you know how to maintain your debit and credit books…
What is the Cost Of Goods Sold (COGS) and How To Calculate it?Cost of goods sold or COGS define as the cost you pay to sell a product, and how you can reduce it with proper…
Understanding Gross Profit Margin with Formula and ExampleBusinesses run on the sole motive of keeping growing consistently and earning profits. But all days are not the same.…
What are Assets and Liabilities?Assets and liabilities are the foremost things to manage, especially in accounting. Financial statements include the…
What Is A Ledger In Accounting?Thus, every business entity must keep a record of financial transactions or ledger. The account books are maintained to…
What Causes Inventory Inefficiency & How to Avoid ItInventory inefficiency causes a lot of loss for a business. This article helps with efficient inventory management, to…
5 Tips For Reducing Business Expenses EffectivelyIn this article, we will be talking about how you can easily do business expense tracking for your business. By the end…
Accounts Payable – Meaning, Definition and ProcessAccounts payable (AP) is an account that represents the company s responsibility to pay off short term debts to its…
How to do Accounting for Small BusinessThis blog discusses managing accounting for small businesses and share actions you can take to ensure that your…
Top 9 Financial Mistakes Small Business Owners MakeFinancial mistakes small business owners make can cost them their businesses but are very easy to avoid. All they need…
How To Setup Efficient Inventory Management SystemA retail business's inventory is among its most precious assets.
What is a Balance Sheet?A balance sheet is often referred to as a statement of financial position and helps declare the assets, liabilities,…
5 Accounting Tips for New EntrepreneursAccounting is on of the most important aspect of a business, but a lot of Entrepreneurs are not good at it. This…
How Online Bookkeeping Helps Save Time And Money?Most of the small and medium scale businesses are looking for the best way to save their financial resources .By using…
4 Signs You Need to Outsource Your Accounting DepartmentAccounting or accounting department are one of the most important department in any business opertion. A lot of…
The Hidden Costs of In-House Bookkeeping and AccountingYou might be evaluating how productive and profitable your systems are, including how you've been managing your…
Bank Reconciliation- Format And BenefitsTransactions can be difficult and to ensure that all is in place, bank reconciliation is necessary.
What Is Inventory Turnover Ratio? (Formula & Meaning)The inventory turnover ratio is an efficiency ratio. It shows how successfully a company is managing its inventory. It…
Accounting Vs Bookkeeping – Most Comprehensive GuideFor most of you, bookkeeping and accounting are one and the same. It is true that bookkeeping and accounting are often…
5 Smart Tips To Avoid Stock DamageBy implementing these effective tips from this blog, you can significantly reduce stock damage and enhance the…
Inventory Valuation MethodsAn inventory valuation allows your company to provide a monetary value for items that make up their inventory.…
What is a Bill Of Materials?In a nutshell, a Bill of Materials (BOM) is the complete list of all the items that are required to build a product.…
3 Expert Tips on Upscaling Your Online BusinessThe world of online retail is still showing considerable signs of growth on a global scale, and despite trends…
Top Order Management SoftwareCheck out a list of best order management software for traders and manufacturers. We have reviewed and compared top 10…
Automating Your Warehouse OperationsWarehouse automation is one of the best-known ways to improve efficiency and functionality, as well as an excellent way…
Eco-Friendly PackagingCheck out the top 10 eco-friendly packaging options that can help you save money in your business. Learn about corn,…- Inventory Control MethodsIf you have a lot of inventory in your warehouse, it will tie up your cash as well as space. This makes inventory…
Flexible PackagingFrom reduced space wastage to lowered transport emissions, the benefits of flexible packaging are endless. To help you…- Understanding SKU CodesFind out what is SKU and where it is used. We explain how to generate SKU codes, difference between SKU and UPC Barcode…
Understanding Inventory ControlFind out what is Inventory control or stock control, the difference between inventory control and inventory management,…
Understanding Inventory ManagementLearn what is inventory management and the terms associated with it. For example, LIFO/FIFO, Dropshipping, Re-ordel…
How to deal with surplus inventoryLearn how to liquidate surplus inventory smartly. In this post, we explain 4 strategies to get rid of the excess stock…
How To Calculate Reorder Level?Choosing the right quantity of an item to keep up a satisfactory stock level is a challenging task in any business. If…- Top 15 Key Inventory Metrics You Should Be TrackingTracking the right metrics is the key to understand how your business flow is going. Here are top 10 key metrics you…
Guide On Advance PaymentsFind out what is an advance payment, best practices for taking advance payment from customer or giving it to vendor.…
Difference between direct & indirect expensesFind out what is a direct expense and what is an indirect expense. Learn about the difference between direct and…
10 Cashflow Mistakes That Can Kill Your BusinessHere is a list of worst cashflow mistakes that business owners make. Ignoring these mistakes can cause failure in your…
What Is Fixed Asset? (Updated in 2023)Find out what is fixed asset in business accounting terms, types of fixed assets, its formula and examples of fixed…- What Is Accounts Receivables? (Updated in 2023)Accounts receivables can be attributed to the amount of money the company or the respective business organisation is…
Difference Between Cash & Accrual Accounting MethodFind out what is the difference between Cash and Accrual accounting methods, Which method is best suited for your…
What Is Depreciation – Types, Formula & Calculation MethodsFind out what is depreciation in business accounting, types of depreciation, its formula and how depreciation is…
3 Important Financial Statements Every Business Owner Should KnowLearn about 3 Important Financial Statements. Find out what is Trial balance, how to generate Profit & Loss statement…
FIFO Vs LIFO – Which Is The Best Inventory Valuation Method?FIFO Vs LIFO - Learn Pros & Cons of each method and find out which inventory valuation method is the best for your…
Tips To Seprate business And Personal Finances in 2023Lot of business owners mix up their business and personal finances and end up being at the wrong side of the law. This…
12 Inventory Management Techniques To Cut LossesImprove efficiency with these inventory management techniques and best practices. Includes FIFO, carrying cost,…
Advanced Accounting Using Journal EntryAdvanced accounting is an skill every business owner should have, in this artical we will be talking about 10 ways to…- Manage Entire Purchase Cycle Of InventoryLearn how to Record Purchase Of Inventory in ProfitBooks accounting software. This guide explains how to manage the…
- How to record Loan Transaction?An easy guide on how to record loan transaction in profitbooks for accounting purposes.
- How to record owner contribution in the business?Founders or owners keep investing in their business to manage cashflow. This guide will show you how to record owner…
Manage Business ExpensesTrack and manage Business Expenses online using ProfitBooks accounting software. Learn how to book bills, record unpaid…
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