Ever feel more confused when you come off the phone with your accountant than before you spoke?
It can be really hard to keep up with the terminology when it’s not your area of expertise; it can be even when it is! So to help get you in the know, here are 5 common accountancy terms explained:
✨ “Asset” - Does your business own equipment, property, land? Anything with a cash value owned by your business is known as an asset.
✨ “Liability” - do you buy from your suppliers and then pay later? Or pay staff wages? A liability is all the money a business currently owes to people or other businesses.
✨ “Ledger” - it’s simply a record of financial transactions in a business. (See below)
✨ “Purchase Ledger” - This is also known as “Accounts Payable”. It shows all the money going out from your business, expenses, whether they have been paid or not.
✨ “Sales Ledger” - This is also known as “Accounts Receivable”. It shows all the money coming into your business from the products/services you have sold, whether your customers have paid you yet or not.
We hope that’s given you a little insight into the mysterious language of accounting professionals and helped you to feel more confident when chatting to your accountant!
Watch out for more terms explained over the coming weeks.
Haven't got an accounting professional on board? Contact us. We'd be happy to help!
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