ALL YOU NEED TO KNOW ABOUT OUR ACCOUNTING FEATURE
For any retail business, accounting is important. It helps us see where we spend the most, how we can cut some costs, and how best to deploy money as a resource into various sections like marketing, order fulfillment, warehouse management, and so on.
It is quite another issue that most of us are overwhelmed by it, but we still need to deal with it.
We’ve designed this guide to help you understand how the accounting feature of TranziPOS works.
Understanding TranziPOS Accounting Feature
- Profit and Loss Statement
This is a financial statement that outlines your revenues, costs, and expenses during a specific period. Also known as the income statement, it is one of the three important financial statements you need to issue either quarterly or yearly.
The income statement helps you see where the money comes from (usually a sale) and where it is spent (buying and storing inventory)
TranziPOS uses the income statement to calculate metrics like your gross profit, and net profit.
- Cash Flow Statement (Expenses)
This is a financial statement that puts together data with respect to
- All cash inflows from your ongoing retail operations and external spending, if any
- Cash outflows for running your business smoothly during a specific period.
So, your cash flow statement will list cash flows from operations, investing, and financing. It can also help you figure out how to increase cash flow from operations and reduce your dependencies on financing.
All two statements are put together to give you a clear picture of your business’s financial position and performance.
For any business, the basics of accounting remain the same. You account for the cost of your service, Government taxes, and losses over time to calculate how much profit you have made. Accounting is a number game, but you know that already!
- Payroll Schedules and Systems
Whether you hire freelancers or full-time employees, your business won’t be a one-person show for very long. If you hire employees, you need to figure out their payment schedule and how much of their monthly salary you need to deduct for tax purposes.
Likewise, you also need a way to calculate their allowances, overtime pay, and any other deductions that you need to make for them.
If you hire freelancers for a task, you still need to maintain a record of their complete business name and address.
The same goes for vendors and contractors. All of these details will be useful when you file your business’s annual returns. TranziPOS helps you do all these without any hassles
TranziPOS Business Accounting Methods:
First In, First Out (FIFO): This method works under the premise that an item in an inventory has been bought at different costs over a period of time.
When one unit of this item is sold, its oldest cost is eliminated first and reported on the income statement under the cost of goods sold.
FIFO is usually preferred when prices are rising. This way, you can record costs at lower prices and income, higher.
Last In, First Out (LIFO): This method works under the assumption that the latest items purchased are the first ones to be sold.
So, the costs of the newest products are reported under inventory. LIFO is the preferred accounting method when tax rates are on the higher side. That way, the costs assigned are higher and income is lower
