SMEs all over the world are aware that making financial reports, statements, and transactions can be a hefty task. This is the reason why 37% of them choose to outsourced bookkeeping services and accounting responsibilities offshore.

Once you have your offshore bookkeeping team, they are expected to report financial and accounting statements that have jargons you might not understand—and this blog will identify and explain the most common ones.

Gross Profit Margin 

GPM is a kind of accounting measurement that analyses and assesses a company’s financial status & business model by presenting the amount of money left from sales efforts.

Operating Profit Margin

This is a performance measurement that is used to calculate the profit a business has generated from its operations.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is another accounting measure that determines a company’s earnings before interest expenses, taxes, depreciation, and amortisation are deducted as a substitute for the company’s present operating profitability.

Current ratio

The ability of a company to pay short-term debts and obligations within a year.

Inventory turnover

This shows the number of times a firm has replaced and sold inventory during a given time.

CAGR

Compound Annual Growth is another bookkeeping measure that is used for determining the annual growth rate over multiple periods.

COGS

Cost of Goods Sold is defined as the cost of the products and services being sold by a company.

Accounts payable

Accounts payable is the money the company owes to a vendor.

Assets

Assets represent the economic value a company has that can be of beneficial used in the future.

Balance sheet

The balance sheet of a company is its financial statement that shows the assets, liabilities, shareholders’ equity, and evaluation of capital structure.

Capital

A company’s Capital is its source of funding for its overall operations and is deemed as its lifeline.

Disbursements

A payment made by a business to a third party.

Cashflow

Cashflow is the cash or cash-equivalents being distributed in and out of the company.

Depreciation

When wear or tear happens, there will be a reduction in an asset’s value for a period of time.

Accounting period

A period of time, which bookkeepers prepare financial statement and books are balanced.

Break-even Point

Estimates the margin of security of a firm’s asset price and revenues, may drop and yet remain above the company breakeven point.

General Ledger

It is a record/ ledger that is used to arrange, store, and summarize company transactions.

Liabilities

A company’s legal debts and obligations that occur during business operations.

Revenue

It is the total amount a firm earns or receives from the products and services purchased by customers.

Outsource to Forward BPO

Acquire high-quality bookkeeping services by partnering with an experienced Australian BPO company; Forward BPO. We also offer different cost-effective Australian BPO outsourcing services which you can find on our services page.

You can also contact us for more information.