Financial Data Collection

1. Financial Data Collection Statistics & Risk Management

2. A Brief History Robert (Bob) Cratchit (Scrooge’s book-keeper-by hand-Tiny Tim’s Dad) Computer Assisted Book-keeping Integrated and Automated Accounting Systems

3. Shoe Box Book-keeping • Small businesses often avoid book-keeping processes. • No time • No expertise • No funds • Big Mistake if Employees are involved.

4. Shoe Box Book-keeping Save Receipts and Bank Statements and give them to an Accountant at Tax Time. Is it unethical/unlawful to hide income to avoid taxes….

5. Book-keeping Vs. Accounting Book-keeping is the collection of business operations data performed on a hourly/daily basis. Accounting is compilation of the collected statistical data structuring it for high level analysis.

6. Book-keeping Methodologies Receivables: Income/Revenue Data Collection Payables: Expenditure Data Collection Internal Transaction Data Collection

7. Double-Entry General Ledger • Journals • Revenue (Credit/Debit Balanced) • Expenditure (Debit/Credit Balanced) • Adjustment (Either Order)

8. Double-Entry General Ledger • General Ledger Accounts • Assets (Debit Balance +) • Liabilities (Credit Balance -) • Income (Credit Balance -) • Expense (Debit Balance +)

9. Financial vs. Managerial Financial Accounting refers to industry accepted accounting practices used for public accountability. Managerial Accounting is company specific and usually used internally to identify problems.

10. Financial Reports Balance Sheet shows the tangible assets, liabilities, and capital accounts of an organization (Net Worth). Income Statement shows the operating income and expenditures (Profit or Loss).

11. For Who? • Who will want to read Financial Statements/Reports • Owners/Investors • Managers • Customers • Vendors • Banks • Governments (Taxes & Agencies)