Financial accounting is the process of recording and reporting all a business’s transactions resulting from operations over time. Operations are summarized to prepare financial statements for a company. Financial accounting utilizes many accounting principles based on the regulatory requirements established to provide consistent information to investors, creditors, regulators and tax authorities.
Financial accounting is typically performed using either the accrual method or the cash method. A combination of the two is used when necessary. Accrual accounting is when transactions are recorded if the revenue is recognizable. Cash accounting is when transactions are recorded only when cash has been exchanged. Income and expenses are often recorded only upon the receipt of payment.
Financial accounting is used to determine the net income and to report assets, liabilities and equity accounts on a balance sheet. The balance sheet is used to indicate ownership of the future economic benefits of a business. The biggest difference between financial accounting and managerial accounting is that financial accounting provides information to people outside of the organization, and managerial accounting information is utilized to help managers of the organization.
QuickBooks is one way for a company to keep track of their financial accounting reports. QuickBooks uses A2X, a certified Xero Connected Application, to import settlement data, creating invoices for a better understanding of payments made to the business. QuickBooks is used to make online accounting easy by organizing everything, recording sales, tracking money spent and income all in one place.
Many business’s financial accountants use QuickBooks daily to account for their sales, fees, inventory and product costs. QuickBooks makes everyday accounting tasks seem easy. Advanced tools are available so sales can be reported twice as fast. Invoices that accept credit and debit cards can be sent with QuickBooks and payments can be taken with free bank transfers. QuickBooks is an excellent way to set up invoices because payment notifications can be set up and money spent can be tracked.
QuickBooks records bills, purchases and expenses. Users can see how much money they are making by automatically downloading bank transactions. Previously recorded transactions can be matched up and categorized with deposits and expenses.
Sites like Amazon have specialized QuickBooks to help sellers on their website. To begin using Amazon QuickBooks company owners can classify their business type as a new business, a professional & field service, product seller or non-profit organization for a more personalized experience. Owners can then choose their preferred QuickBooks plan. One plan option is Simple Start, where companies can send and track custom invoices, track income and expenses, create and manage estimates plus sync bank accounts and apps. The second plan option is the Essentials program that includes everything in the Simple Start plan plus the company can manage and pay bills and receive instant sales profit reports. The final plan option is the Plus package that includes everything in the Essentials plan plus it tracks inventory and users can prepare and print 1099s with this plan.
Financial accounting is a focused branch of accounting that records a company’s financial transactions. QuickBooks has many options for helping companies stay organized. Financial accounting can be made simple with the use of QuickBooks features.