Accounting from zero: a newcomer’s primer

The single formula behind it all

Possessions = Debts + Ownership. Each business event touches this balance: buying a laptop with reserves (one possession rises, another falls), borrowing (possession rises, debt rises), or completing a sale (possession rises, ownership rises). Ledgers tying to this formula are sound; ones that will not tie hide an omission.

Cash or accrual: decide once, decide well

Cash-basis books log funds upon movement. Accrual-basis logs upon earning or incurring. Solo operators often manage on cash; whoever stocks goods, holds deposits, or courts investors belongs on accrual. Converting afterwards costs dearly — consult your accountant upfront.

Five summaries worth your quarter-hour

Your earnings summary, financial position, liquidity flow, overdue-balances schedule, and plan-versus-reality. A quarter-hour monthly across these five reveals profitability, solvency, and collection health. The remainder is background.

Starting fresh? Our tax planning crew opens first ledgers weekly — typically inside ten days.