The majority of small business owners are not traditionally trained in accounting or bookkeeping. It is standard operation to hire a certified public accountant and a certified financial advisor. Most small business owners recognize that hiring an accountant or financial advisor is a must for business success!
With that said, there is some basic knowledge that most small business owners must learn. If you don’t know how to keep your finances in order, you most likely will not succeed in any business venture. There are several fundamental truths, or principles, to accounting which must be recognized by all business owners. A principle is the underlying truth of a practice that guides behavior. Similar to the laws of nature, a principle is essential to the character of the overall system.
Did you know that the five main principles of business accounting have been with us since the time of Mesopotamia? That is how time-tested and approved these principles are! Whether you sell whatcha-ma-call-it, provide a landscaping service, care for injured animals, or manufacture heavy machinery, your business follows the same guidelines of basic accounting. The principles are the same for everyone.
There are certain documents and procedures which are as iconic to the practice of accounting. For example, financial statements, bills, and receipts are necessary documents and tools for accounting. Few are as important as printed invoices. Invoice printing is a necessary practice for appropriate bookkeeping. Without invoices, it is near impossible to adhere to the principles of accounting. This means the need for timely and cost-effective invoice printing is unlike any other business practice. It is also true that the need for clear, professional, and attractive invoices is reflected within each of the five principles of accounting. Invoices are essential tools for record keeping and serve a vital purpose for all business owners.
The Revenue Principle
The revenue principle pinpoints an exact time when bookkeepers may record a transaction as revenue. This principle states that, at the point of sale, revenue for the business has been earned and recorded. The buyer now has legal possession of the items paid for, or that the service purchased has been performed.
Invoice printing prior to the point of sale is a non-negotiable instrument in establishing the revenue principle. An invoice is a document provided by the seller. It is used to track and authorize the agreements of the sale, provided by the seller to the buyer. It contains all of the details of the goods and services, the name and address of the parties involved, price, discount, place of delivery, and date. All of this information creates a thorough agreement of the transaction terms.
In order to adhere to the basic revenue principle of accounting, invoice printing is a required step in determining the exact time a bookkeeper may record a transaction as revenue for the business.
The Expense Principle
The expense principle pinpoints an exact time when bookkeepers may record a transaction as a business expense. Of course, businesses need to spend money to make money! This principle states that, when the business accepts time, goods, or services from another business, an expense is recorded in the books. Simply put, it means that business expenses are documented when goods are received or services are rendered. It is not appropriate to wait and document business expenses when the business is billed or has paid for such transactions.
There are many expenses that require invoice printing. For instance, consulting with clients takes up time that you could be working on other projects. Traveling far distances to meet the needs of a client also accrues a lot of expenses. The time which is spent on researching a matter for a client is an expense. Or, of course, the cost of material is included in business expenses.
At the time of transaction which determines a business expense, invoice printing is an inflexible standard in establishing the expense principle. It is crucial to document the expenses necessary to manufacture goods or to provide a service. Invoice printing is necessary for maintaining this appropriate accounting transaction.
The Matching Principle
The Matching Principle indicates that you should match every item of expense with an item of revenue. Seems straightforward! If you are selling watermelon smoothies, you should count the cost of watermelons, the cost of ice, the cost of straws, the cost of cups, and any other material needed. All of this should be accounted for at the time of the sale. Basically, you match the expense of each smoothie with the revenue earned for each smoothie. Hence the name of the matching principle!
Invoice printing is vitally important with the matching principle. Given that invoices are used to outline the goods and services provided, as well as the expenses accrued, it only makes sense that invoice printing is an important step when matching the goods and services with expenses.
(When a business combines the revenue, expense, and matching principles together, they are following the accrual accounting method.)
The Cost Principle
The cost principle, also known as the historic cost principle, is one of the generally accepted rules of accounting which provides verifiable evidence of value. This principle requires that bookkeepers use the historic cost of an item to determine value.
For instance, if your business owns property such as real estate or a vehicle, and it was purchased at thirty thousand dollars, the historic cost of this property will remain thirty thousand no matter the current fair market value.
When considering the importance of recording the historic cost to adhere to the cost principle of accounting, the need for invoice printing is clear. Invoices provide the needed documentation of the cost agreed upon before the point of sale.
The Objectivity Principle
The Objectivity Principle of accounting states that you should use only factual data while bookkeeping. Subjective measurements of value are never acceptable in business accounting. Sometimes business owners believe that subjective data seems to fit better than factual data, but it is never acceptable to use subjective descriptors while determining value.
For example, if you are selling a piece of pottery, in order to determine its worth you may use statements about its material, the time and effort used to create it, or describe how it is one of a kind. This data is objective and verifiable. According to the objectivity principle, it is inappropriate to determine the worth of pottery by measuring it as “pretty.” Pretty is a subjective measure.
Invoice printing provides the opportunity to determine the objective measure of the goods and services sold. When supplying a customer with a detailed invoice, an objective description of items sold is included as an appropriate and thorough accounting practice.
There is no getting around it, invoice printing is one of the most vital necessities required for each of the five basic principles of accounting. Since invoice printing is a necessary practice for all industries, it goes without saying that it is only smart for business owners to perfect and streamline this task. Hiring a professional printing and mailing service is not only handy but has become standard practice for businesses of all sizes. A printing and mailing service, like Towne Mailer, can handle the demands of all your invoice printing and mailing needs while saving you money!
Have you ever stopped to consider how much ink, paper, and mechanical upkeep it takes to process your invoice printing and mailing in office? There is a lot that goes into this practice! How many reams of paper will you go through each month? How many different ink cartridges will you empty? What is the size of your printer and can it continuously meet the demands of your invoice printing needs?
Generating and mailing invoices is a lengthy, time-consuming task. It has great importance to the livelihood of your business. It is not a job that can be phoned in or skipped over. A professionally designed invoice allows a company to get paid and is a legal document. As mentioned before, an invoice is one of the most vital documents for your business. Among other tasks, they are critical to receiving payment, reporting income, and answering audits.
For most businesses, invoices are documents that get created multiple times every day. Every day, businesses are required to generate, print, and mail multiple invoices. It’s a never-ending process. Why put such a strain on your in-house team? Help take the burden off your team by outsourcing invoice printing and mailing to a professional print and mailing service, like Towne Mailer.
Towne Mailer is a printing and mailing process company located in Missoula, Montana. We help businesses of various sizes all across the country manage their invoice printing and mailing needs. Furthermore, we help businesses save time, effort and money by providing reliable printing and mailing services with their statements, invoices, bills, pamphlets, and any other regular mailings.
With twenty years of expertise, we pride ourselves on our guaranteed twenty-four house turnaround time! Our automated system means less hassle for your in-house team while saving you time and money. With professional printing and mailing services, you have eliminated the cost of material, postage, and labor that regular mailing requires. We are customer focused and confident that we can handle your needs, no matter what your printing and mailing requirements are.
Contact us today!