Bookkeeping Services and Current Liabilities - How a Professional Bookkeeper can help you understand your current liabilities. If your first question is “What is my businesses current liabilities?” then you know your are in need of professional bookkeeping services as an experienced bookkeeper will absolutely make sure that you have a very clear understanding of not only what current liabilities mean but also what your businesses current liabilities are.
Investopedia.com defines Current Liabilities as “a company's debts or obligations that are due within one year” and because it is due within a year it is essential that you either have the bookkeeping knowledge or the bookkeeping services to take care of it. And, just to make sure we are all on the same level playing field, current liabilities for your business appear on your company's balance sheet and include short term debt, accounts payable, accrued liabilities and other debts.
Essentially, bookkeeping services and current liabilities are bills that are due to creditors and suppliers within a short period of time. Normally, companies withdraw or cash current assets in order to pay their current liabilities. These can range from loans you took out for the company all the way to the mortgage on the facility.
However, you need to take into account that as your company grows; you are most likely going to take on more current liabilities - essentially as your business has the financial structure and ability to handle increased payments. As your company’s financial activities and financial infrastructure change it becomes a challenge to stay on top of all your current liabilities and how it influences your company’s financial health. When you reach this stage in your businesses life cycle you need to seek out the outsourced bookkeeping services of a professional bookkeeper to help you interpret and comprehend exactly what your businesses current liabilities are and how it affects your business.
Accounts Payable is your businesses most common form of current liabilities that your bookkeeping services will help you with. Whereas accounts receivable are the bills and payments you receive from your customers and clients, accounts payable is what you have to pay out. These are the payments you need to make on products, material and outside services. For example, if you pay for sheet metal for the fabrication of products inside of your factory, the amount you need to pay for this sheet metal is filed under accounts payable. Often knowing how to categorize your different accounts payable can be a challenge without the help of a professional bookkeeper and his or her knowledge of bookkeeping services and current liabilities.
This is generally a stable form of bookkeeping services and current liabilities - although it can fluctuate when hiring, promoting and providing raises. It covers the salary you owe your workers and the bonuses and benefits you must pay during a given time period. Your bookkeeping services will help you to organize these different payrolls and accrued benefits. This helps you to know where the company’s money is going and how much you are paying different employees inside the company.
your bookkeeping services are going to point out, your debt is broken down into
either short term or long term. This is often the most important kind of debt
you bookkeeping services is going to help you monitor. It details the debt
owned on a bank loan, payments you need to make that are incurring interest and
other forms of debt you typically request for your business.
Whether it is equipment you have a monthly payment on or your rent, all of this falls under your long term and short term debt. Your short term debt is more of the immediate debt you own within the next year, while long term debt is a form of debt that stretches out beyond this time period. With the help of your professional bookkeeping services, you can identify these kinds of debt and make sure you are paying back the debt wisely.
Monitoring your debt and staying on top of current liabilities is very important for your business. If you are not able to do this, you might fall behind, start to incur additional interest and find it difficult to repay some of these loans and other liabilities. With the help of your bookkeeping services, you have access to a professional adviser who can walk your business through the best way of handling the liabilities and what priorities you need to make when it comes to paying back the debt and keeping your business financially responsible and stable.
Stephanie Horne is an experienced bookkeeper and Enrolled Agent. She is the owner and founder of Horne Financial Services in Rohnert Park, California along with this website and has over 20 years of in person, virtual and outsourced bookkeeping/accounting and tax preparation experience with businesses of all sizes.
Her love and passion is to work individually with business owners and families to help alleviate any financial stress or concerns by helping them to understand and have better control of their income, expenses, cash flow, and tax liabilities. She can be reached through her Horne Financial Services Facebook page as well.
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