Your accountant's words

Owed to youReceivables, or trade debtors

Money customers still owe you, for invoices you have sent.

The older these get, the less likely they are to be paid, so your accountant watches their age.

You owePayables, or trade creditors

Bills you have received and not paid yet.

Paying on time keeps suppliers happy; paying early leaves less cash on hand.

Money inRevenue, or turnover

What you earned in the period: the invoices you sent, paid or not, and money received for work you did not invoice.

Tax and most reports start from this number.

Costs of your activitiesDirect costs, or cost of sales

Costs that went into doing the work you were paid for.

Money in less these is your gross profit: what each piece of work really leaves you.

Everyday costsOperating expenses, or overheads

Costs of keeping the business running, whatever the work: rent, software, the bank's fees.

These stay even in a quiet month, so they set how much you must earn.

Left overNet profit (or net loss)

What is left after every cost. A minus means more went out than came in.

Your tax is worked out from this, after your accountant's adjustments.

Fixed monthly costsCommitments

What you have already agreed to pay each month: rent, salaries, subscriptions.

It is what is spoken for before you spend anything new.

Cash on handCash position and runway

What sits in your bank accounts today, and how long it lasts at your usual spending.

Profit and cash are different: a business can be profitable and still run short.

Left out on purposeItems pending treatment

Items Angka kept out of the totals because how they count is a judgement call.

Your accountant decides how these count; until then the totals say what they leave out.

LedgerGeneral ledger

Every payment in and out, in one list, each with the paper behind it.

It is the record everything else is built from: the figures, the reports, the tax return.

By statementBank reconciliation

Each line on the bank statement matched to the paper that explains it.

It proves the books agree with the bank, line by line. Auditors ask for it.

Some paper missingMissing supporting documents

A payment with no receipt, invoice or note behind it yet.

A cost without paper may not be claimable against tax.

What forExpense category, or account in the chart of accounts

What a payment was for: rent, people, software and the rest.

Your accountant's software sorts every payment into accounts like these.

Advance invoicePro forma invoice

What the invoice will say, sent before the work or the goods.

It is not a tax invoice and asks for nothing yet; the real invoice follows.

Refund or discount noteCredit note

Money taken off an invoice already sent: a return, a discount, a mistake.

An invoice once sent is never edited; a credit note changes what it asks for.

Extra charge noteDebit note

More owed than an invoice said: extra work, a shortfall, a charge.

It adds to an invoice already sent, without changing the original.

Owing at the startBalance brought forward

What the customer owed at the start of the statement's dates.

It carries the earlier months in, so the statement adds up on its own.

Days lateAgeing

What is owed, sorted by how long it has been late.

The longer it is late, the harder it is to collect; accountants look here first.

Financial year startsFinancial year (and its end, FYE)

The month your business's year begins, for its accounts and tax.

Your accounts and tax return cover this year, so deadlines run from its end.

Send to your accountantManagement accounts pack

The month's figures, papers and open questions, in one pack for your accountant.

It saves your accountant chasing you for what they need at month end.

InvoiceSales invoice (it creates a receivable)

Your bill to a customer. Once sent, what it asks for is money owed to you.

Sending it is what makes the money show as owed to you.

Signed proposal or contractContract, or engagement letter

The paper where you and the other side agreed the work and the price.

It settles a dispute about what was promised.