I’ve been heavy into Accounting 101 since I arrived in June. At that time, Debi Nordstrom and her son, David, were in their last week here as volunteer consultants to help us sort out our books and begin doing accounting transactions in a grown-up way. She was here for a month and the last few days included the better part of some nights as well. She was looking exhausted and bleary-eyed, but pulled out all the stops to get us to close May before she left. Then it was up to me to hire someone and figure out how to do it for June and all the months to follow.
Our business is not entirely straightforward because it has both rental and retail components, so some of the COGS (cost of goods sold) take the form of asset depreciation and some are normal retail inventory cost. In addition, the charging and delivery costs are part of the rental COGS.
We also have the added element of the battery deposit (like the old deposit we used to have to pay for a glass Coke bottle) that doesn’t count as revenue but has to be tucked away in the event the customer wants to turn in his or her batteries and get the deposit back.
Along with sorting out the checklist for everything that needs to be buttoned down before we can close each fiscal month, I was writing detailed procedures for all the accounting related transactions and processes we do. Since I’m not an accountant and have never taken an accounting class, my baseline was a 3-day seminar I took on Financial Management when I was in consulting. Frankly, I’ve decided that’s where all accounting classes should start. Understanding how to read Profit and Loss statements and Balance Sheets really helped me understand the accounting transactions I was learning (from Debi and QuickBooks). I still can’t talk in debits and credits very well, but I can get the numbers to increase or decrease when they are supposed to. In fact, I figure I could set up QuickBooks for a small company. I’m pretty tickled with that.
XO
Our business is not entirely straightforward because it has both rental and retail components, so some of the COGS (cost of goods sold) take the form of asset depreciation and some are normal retail inventory cost. In addition, the charging and delivery costs are part of the rental COGS.
We also have the added element of the battery deposit (like the old deposit we used to have to pay for a glass Coke bottle) that doesn’t count as revenue but has to be tucked away in the event the customer wants to turn in his or her batteries and get the deposit back.Along with sorting out the checklist for everything that needs to be buttoned down before we can close each fiscal month, I was writing detailed procedures for all the accounting related transactions and processes we do. Since I’m not an accountant and have never taken an accounting class, my baseline was a 3-day seminar I took on Financial Management when I was in consulting. Frankly, I’ve decided that’s where all accounting classes should start. Understanding how to read Profit and Loss statements and Balance Sheets really helped me understand the accounting transactions I was learning (from Debi and QuickBooks). I still can’t talk in debits and credits very well, but I can get the numbers to increase or decrease when they are supposed to. In fact, I figure I could set up QuickBooks for a small company. I’m pretty tickled with that.
XO
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