This comprehensive guide will delve into the definition of depreciation, its various methods, and its significance in financial contexts. Many people struggle to grasp how depreciation impacts their financial statements and overall business strategy. By exploring this topic, readers will gain insights into how depreciation influences asset management and financial reporting.

A General Ledger is the central record of all your business’s financial transactions. Think of it as the “master book” where every dollar that comes in or goes out is recorded. It summarizes information from invoices, receipts, bank statements, and payroll, and organizes it into categories like income, expenses, assets, and liabilities. In short: the General Ledger is the backbone of your financial records.

The most important financial reports you should review every month are your Profit and Loss Statement (P&L), Balance Sheet, and Cash Flow Statement. Together, these reports provide a complete picture of your business’s revenue, expenses, assets, liabilities, and cash position. In addition, reviewing Accounts Receivable Aging, Accounts Payable Aging, and Bank Reconciliation Reports helps you keep track of money owed to you, money you owe, and the accuracy of your bookkeeping o