Running a daycare is a fulfilling job, and important to parents who need someone watch their children. There are plenty of things to keep you busy at all times so making things easier is crucial to your peace of mind. And so that you can focus on other things – like the children trusted in your care. One way to make things easier on yourself is to have an accounting plan.
Here is a starter guide to daycare accounting and what you need to know.
Any expenses that do not relate directly to your product or service, are considered overhead. If you make custom shirts, for example, the cost of the shirts and the ink is not overhead. Anything that is directly related to the product you sell is considered part of the product cost.
Like any business, daycares face a broad range of accounting issues. To help you tackle them, you can choose between popular general accounting software, like QuickBooks, or you can look for daycare management software with accounting tools built-in. Read on to learn more about Daycare accounting software.
Deferred revenue, also known as “Unearned Revenues,” is how businesses classify revenue they have received that has not yet been earned. Customer deposits are an excellent example of unearned revenue. While your business may have the money in hand, you cannot count it on your earned income statement because it remains unearned. Therefore, it must be deferred to your balance sheet and reported as a liability.
Designed with small businesses in mind, Bench Accounting is a digital subscription that touts itself as a full-service online bookkeeping service. Subscribers gain access to a bookkeeper who works with them remotely to process bank statements, prepare other financial statements, and fulfill transactions on a monthly basis. If you’re considering Bench Accounting, it’s worth reviewing the service’s features, pricing, and comparable alternatives.
Accounts receivable is typically held by companies that invoice for goods or services to be paid at a later date. Cash businesses, or those who receive payment at the time of delivery of the good or service, won’t have an accounts receivable. A consumer-facing retail shop that sells goods for immediate payment, for example, likely won’t have A/R.
Accounts payable is generally defined as a current financial liability. It is usually money that a company owes to one or more of its vendors or suppliers. According to Less Accounting, how efficient the accounts payable system is in any organization affects the company’s reputation and financial stability. Accounts payable is sometimes thought of as short-term debt payments.
By the time you’re ready to file your business’ first tax documents, you’ll need to have chosen the accounting method you’re going to use. Then, you’ll have to stick to that method for every subsequent return you file. Speak with accounting professionals to help determine the accounting method that fits your business best.