What are a business’s books? What does it mean.

We hear the word “books” thrown around a lot, but what does it even mean as it relates to our business?

To be transparent, if I may, I haven’t always known the meaning. So, it does not seem very common to the common person unless it relates to business. There is nothing wrong with not knowing what it means. We all live and learn. It is called “growing”.

So what are a business’s “books”?

A business’s “books” refer to its financial records that track all money-related activities, such as income (money coming in), expenses (money going out/being spent), assets (what you own, cash, inventory), liabilities (debts or obligations that a business owes to others), and equity ( which represents the ownership value in a business after all debts (liabilities) have been paid off.) These records are essential for running a successful business.

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The “books” can be stored on paper (the traditional method), in accounting software, spreadsheets, etc., and typically consist of:

• Expense records (money going out of the business)
• Sales records (money coming into the business)
• Invoices (a bill that shows the money you received)
• Bank statements (a source document to prove transactions)
• Payroll information

Keeping up to date on “books” helps businesses stay organized, make informed decisions with the financial data that is recorded on a businesses financial statements, and prepare for things like paying taxes and audits.

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