Episode 90: The ABCs of Accounting (Part I)
February 17, 2023
Welcome to the Therapy For Your Money School of Accounting! Today, Julie's going over key financial terms that are vital to running a successful business.
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- A = Asset
- Any resource owned or controlled by a business
- B = Burn Rate
- Measures your outgoing cash flow based on the money your practice typically spends each month
- C = Cash Accounting
- Method of accounting that only reflects transactions at the time the payment is actually received or made (versus accrual accounting method)
- D = Double-Entry Bookkeeping
- When each transaction has both a debit and a credit - this ensures accuracy, and balances your financial statement at all times
- E = Expenses
- Any cost associated with running your practice (includes a variety of things - payroll, office supplies, technology costs, rent/utilities, taxes, etc.)
- F = Fiscal Year
- The timeline that you use to budget your finances
- G = General Ledger
- Where every single transaction is accounted for in order to prepare budgets, taxes, audits, etc.
LINKS & RESOURCES
GreenOak Accounting - www.GreenOakAccounting.com
Therapy For Your Money Podcast - www.TherapyForYourMoney.com
Profit First for Therapists - www.ProfitFirstForTherapists.com