In this episode of QuickBooks Mastery for Small Business Success, father-daughter team Erica Northrup and Lee Davis go back to the basics with a plain-English Accounting 101 conversation for business owners.

This episode is not about turning you into an accountant. It is about helping you understand the basic accounting language behind your business numbers so that QuickBooks, financial reports, bookkeeping, and conversations with your accountant feel less confusing.

Erica and Lee break down the accounting terms every business owner should know, including income, expenses, profit, loss, assets, liabilities, equity, bookkeeping, accounting, the Profit and Loss report, the Balance Sheet, cash, and profit.

If your QuickBooks file feels overwhelming, your reports feel confusing, or you are not sure what your numbers are actually telling you, this episode gives you the foundation you need to start making sense of it all.

• Business owners do not need to become accountants, but they do need to understand basic accounting language.
• Bookkeeping records what happened; accounting explains what it means.
• Income is money the business earns, but not every bank deposit is income.
• Expenses are the costs of running the business, but not every payment is an expense.
• Assets are what the business owns, liabilities are what the business owes, and equity is what is left for the owner.
• The Profit and Loss report shows business performance over time.
• The Balance Sheet shows what the business owns, owes, and has in equity at a specific point in time.
• Cash in the bank is not the same as profit.
• Understanding basic accounting terms helps business owners read reports, ask better questions, catch mistakes, and make stronger financial decisions.

• Do you understand the difference between money coming into your bank account and actual business income?
• Are you looking at both your Profit and Loss report and your Balance Sheet, or only one piece of the financial picture?
• Do you know whether your QuickBooks numbers are helping you make decisions or leaving you more confused?
• Are you relying only on your bank balance to decide whether your business is healthy?
• Could your conversations with your accountant or bookkeeper improve if you understood the basic accounting language better?

Free QuickBooks Clarity Scorecard

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support@leedavisandcompany.com

• QuickBooks Clarity Scorecard
• Future Episode: Applying Accounting 101 Terms Inside QuickBooks
• Lee Davis & Company QuickBooks training and consulting resources

00:55 - Why Accounting 101 matters for business owners

08:17 - Bookkeeping vs. accounting explained in plain English

11:29 - Income, expenses, cost of goods sold, and profit

18:45 - Assets, liabilities, and equity made simple

29:20 - Profit and Loss vs. Balance Sheet

36:50 - Why cash in the bank is not the same as profit

41:41 - How accounting terms help business owners make better decisions

46:18 - Simple Accounting 101 takeaways every owner should remember

If you enjoyed this episode, hit subscribe and stay connected with us at leedavisandcompany.com.

Download our free QuickBooks Clarity Scorecard to see whether your QuickBooks setup is giving you the financial insight you need.

Have a QuickBooks question? Send it to support@leedavisandcompany.com — your question may be featured in a future episode.

In this episode of QuickBooks Mastery for Small Business Success, father-daughter team Erica Northrup and Lee Davis break down the three core QuickBooks workflows every small business owner needs to understand: money in, money out, and month-end.

They explain why messy QuickBooks files are often not caused by one big mistake, but by inconsistent workflows repeated over time. Lee shares how business owners often rely too heavily on the bank feed, skip important steps, mix up forms, or fail to close out the month properly.

This episode helps business owners see QuickBooks as a system — not just a tool — so they can build cleaner books, more reliable reports, and better financial clarity.

• Most QuickBooks problems are really workflow problems.
• The three essential workflows are money in, money out, and month-end.
• A consistent money-in workflow helps prevent missing or double-counted revenue.
• A clear money-out workflow helps business owners understand what they owe versus what they have already paid.
• Month-end review turns QuickBooks from data entry into decision-making.
• Consistency matters more than perfection when building better QuickBooks habits.

• Is your money-in process consistent every time revenue enters your business?
• Are you clearly tracking the difference between bills, expenses, checks, and payments?
• Do you close out each month, reconcile accounts, and review your reports?
• Are your QuickBooks reports giving you clarity — or creating more confusion?

Free QuickBooks Clarity Scorecard

Download at: https://lee-davis-and-company.aweb.page/unlock-clarity-free-scorecard

Send Us Your Questions:

support@leedavisandcompany.com

Related Episode:

Episode 22: Bill, Check, or Expense? Choosing the Right Form in QuickBooks

• QuickBooks Clarity Scorecard
• Episode 22: Bill, Check, or Expense? Choosing the Right Form in QuickBooks

00:00 — Why QuickBooks Workflows Matter

01:04 — Why QuickBooks Problems Often Start with Workflow

05:27 — Workflow #1: Money In

14:23 — Workflow #2: Money Out

22:06 — Workflow #3: Month-End Process

37:59 — Where to Start if Your QuickBooks Feels Inconsistent

If you enjoyed this episode, hit subscribe and stay connected with us at leedavisandcompany.com.

Download our free QuickBooks Clarity Scorecard to see whether your QuickBooks setup is giving you the financial insight you need.

Have a QuickBooks question? Send it to support@leedavisandcompany.com — your question may be featured in a future episode.

In this episode of QuickBooks Mastery for Small Business Success, father-daughter team Erica Northrup and Lee Davis break down one of the most misunderstood foundational concepts in QuickBooks.

They explain why bills, checks, and expenses are not interchangeable—and how using the wrong one can quietly create messy books, inaccurate reports, and confusion in your workflow.

If you've ever wondered:

“Does it really matter which form I use?”

This episode will give you a clear, practical answer.

• QuickBooks forms represent real-life financial events—not just data entry
• A Bill is for tracking what you owe before payment (Accounts Payable)
• A Check is for money going out immediately by cheque
• An Expense is for money going out electronically or by credit/debit card
• Using the wrong form can distort reports, duplicate expenses, and create confusion
• The simplest rule: match the form to what actually happened in real life

• Am I tracking bills before I pay them—or skipping Accounts Payable?
• Do my QuickBooks forms reflect how money actually moves in my business?
• Where might using the wrong form be creating confusion in my reports?

Free QuickBooks Clarity Scorecard

Download at: https://lee-davis-and-company.aweb.page/unlock-clarity-free-scorecard

Send Us Your Questions:

support@leedavisandcompany.com

00:00 – Introduction and why this topic matters

01:17 – Why QuickBooks forms are not interchangeable

04:12 – What a bill actually means (Accounts Payable explained)

07:00 – Restaurant example: tracking food invoices properly

10:30 – What a check represents in real life

14:15 – Expense vs check (credit card vs cheque clarity)

20:15 – The simplest rule: pay now vs pay later

21:00 – What goes wrong when you use the wrong form

25:15 – What to do if your workflow is incorrect

If you enjoyed this episode, hit subscribe and stay connected with us at leedavisandcompany.com.

Download our free QuickBooks Clarity Scorecard to see whether your QuickBooks setup is giving you the financial insight you need.

Have a QuickBooks question? Send it to support@leedavisandcompany.com — your question may be featured in a future episode.