Exploring Bookkeeping basics in Salesforce Billing
Anupriya Marar
Accredited Salesforce Revenue Cloud consultant | 5X Salesforce Certified | Google certified Project Manager
In this article let’s explore the foundations of bookkeeping in accounting and its automation within Salesforce Billing. Discover the essential concepts of bookkeeping, why it's vital for any business, and how Salesforce Billing streamlines the process.
What is bookkeeping?
The regular process of recording, sorting and storing a business financial transaction.
Some common examples include:
General Ledger, Journals, Cashbook, Sales Register, Purchase Register etc.
Why is bookkeeping important for any business?
Bookkeeping is crucial for accounting in any business. It is the same as the trunk of the accounting tree. Accurate record-keeping is the foundation for doing your taxes, building financial statements, making business decisions and spotting/rectifying mistakes.
Let's look at a very basic example of bookkeeping for a small business. Imagine a lemonade stand operated by a child. We'll keep the transactions simple:
1. Initial Investment:
?? - The child starts the lemonade stand with $20 saved from an allowance.
2. Lemonade Sales:
?? - The child sells lemonade for $1 per cup.
?? - On the first day, they sell 10 cups.
?? - On the second day, they sell 5 cups.
3. Expenses:
?? - The child buys lemons and sugar for $5.
?? - They spend $2 on disposable cups and straws.
?4. Total Cash on Hand:
?? - At the end of the week, the child counts the cash they've earned.
Here's how this basic bookkeeping might be recorded:
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In this extremely simplified example, you can see the basic principles of double-entry bookkeeping. Every transaction is recorded with both a debit and a credit, and the owner's equity (the child's share of the business's value) increases with the profit from sales but decreases with expenses.
In practice, for more complex businesses like Amazon, Netflix, Facebook there would be additional accounts and transactions to record, but the fundamental principles remain the same.
And that is when complex B2B businesses rely on the trust and competency of Salesforce Revenue Cloud.
Let’s look at how the concept of ‘Finance Book’ is implemented in Salesforce Billing.
Finance Book Name: You can choose any name that effectively communicates the context related to business financing.
Period Type:
- Revenue: Contains lookups to all the ‘Revenue’ type transactions.
- Account: Contains lookups to all the invoice lines, credit notes, debit notes allocation, payment from a transaction. Basically all other transactions other than ‘Revenue’.
Finance Period Duration: This gives the option to create a Finance book for a ‘Monthly’ finance period or pick a ‘Custom’ period.
‘Billing Admin’ has the option to create ‘Finance Periods’ automatically if they have selected ‘Monthly’ finance period duration.
In case they choose to create ‘Finance Periods’ manually. The screen would look similar to below.
This enables users to create specific duration Finance Periods example: Quarterly finance periods.
Period status value decides if the transactions should be mapped to the financial book or not. Transactions get captured for ‘Open’ financial books only.
So, going back to our lemonade stand example within Salesforce Billing – Transactions will be captured under ‘Revenue’ and ‘Accounting’ finance books.
Finance users and CFOs can further create reports and dashboards to monitor various financial metrics for monitoring and planning of financial activities.
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