Show me the Green -- Managing your Money
Show me the Green: Managing your Money
We've been reviewing some of the infrastructure and tools you'll need as you grow and strengthen your green business. Here is a quick overview of the typical reports you'll use to show how much money your business is bringing in:
You and other stakeholders' equity in the business is everything from the business cards you personally printed to spread the word about your business, to the new checks your partner ordered or brochures you printed up, to all investors' initial capital investment.
Assets are what the company owns that could be exchanged for cash: for example: cash, checking, savings, money market accounts, invoices that you've sent and are waiting for payment on (accounts receivable), loans that you've given out that you're waiting for payment on (notes receivable), physical property such as cars, computers, buildings, and any other item that you could liquidate.
Liabilities are what the company owes to creditors: for example, personal or bank loans, credit card debt, car loans, mortgage loans, and other payments that the company is responsible for.
A typical balance sheet displays the assets and liabilities of a company within a range of time, for example, on the first of the month.
Profit and Loss Statement
Federal Employee Identification Number or Tax ID Number
When you've collected these documents and made them accessible, you're ready to use the information whenever needed. Recordkeeping moving forward relates to time/payroll, expenses (itemized list of what was spent to pursue new business), income (what the business takes in - cash, barter, checks, credit card, notes, etc.), and equity (additional partner investment or debt).
I know it can be tedious, but your goal here is to show as strong a position as possible in terms of your emerging business. As you grow, you'll be able to find bookkeepers, accountants, tax preparers, and financial advisors to help you make the most of your hard-earned money.