Accounting basics for business owners
An introduction to accounting, and to Fiskl, for business owners. Each episode is two to three minutes and explains one idea with the same example company, so the episodes build on each other. Start at 1.1 and watch in order, or jump to the module you need.
1. Why accounting matters​
Episode 1.1
What accounting is for · 2:09
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You send invoices, pay bills, and watch the bank balance go up and down. But could you say, right now, whether the business is making money? Answering that is what accounting is for. Accounting means recording everything that happens to your money, in one place, the same way every time. Each sale, each bill and each payment becomes a transaction in your books. On its own, one transaction tells you very little. Gathered together, they answer the three questions every owner asks. One: am I making money? That is what came in, minus what it cost to earn it, over a month or a year. Accountants call it the profit and loss report. Two: what do I own, and what do I owe? Cash in the bank, money customers owe you and equipment, against loans and bills you haven't paid yet. That's the balance sheet: a picture of one day, not a period. Three: where did the cash actually go? Profit and cash are not the same thing, so this one follows only the money that moved. That's the cash flow statement. All three come from the same transactions, so when the books are right, all three are right. And when one transaction is wrong, it's wrong in all three. In Fiskl, your bank feed, your invoices and your bills fill the books as you work. The reports update as each transaction is recorded, so the answers are always current. If you work with an accountant, they work in the same books, from Fiskl Atlas, their own workspace. You invite them from External Access, and they see the same numbers you do. You keep the books current day to day: invoices, bills, and checking the bank. Your accountant reviews them, corrects what needs it, and handles tax and year end. Either of you can open the reports and ask the three questions. Accounting is one set of books that answers three questions: am I making money, what do I own and owe, and where did the cash go? In the next video, we open each of these reports and see how it answers your question.
Accounting is one set of books that answers three questions: am I making money, what do I own and owe, and where did the cash go?
Episode 1.2
The three reports · 2:45
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You open a report, see a page of numbers, and wonder which ones matter. In each of the three reports, a few lines tell you almost everything. Start with the profit and loss: am I making money? At the top is what you earned from sales over the year: your revenue, 98,000. Take away what it cost to deliver the work, the freelancers you brought in, and you have gross profit. Then take away the costs of running the studio: rent, the assistant, software. What's left is your net profit: 19,440 this year. If gross profit is thin, look at your prices; if running costs grow faster than sales, look at your costs. Next, the balance sheet: what do I own, and what do I owe? It's a picture of one day, so you choose a date, not a period. First, what you own: cash in the bank, money customers owe you, and the equipment. Then, what you owe: the rent bill you haven't paid yet, and the loan. The difference is what's yours: 18,440. That's the money you put in, plus this year's profit from the profit and loss, less what you took out. Last, the cash flow statement: where did the cash go? It starts with the cash you had on the first day, and ends with the cash on the last. In between, every movement of cash falls into one of three groups. Day-to-day trading brought in 14,540; accountants call that operating. Buying the equipment used 6,000; that's investing. The loan and your own money, in and out, added 5,000; that's financing. So you made 19,440 in profit, but your cash rose by 13,540. The gap is mostly money customers haven't paid yet, and equipment you paid for in full but count as a cost over three years. In Fiskl, the three live together on the Reports page, filled from the same books. You choose a period for the first and the third, and a single day for the balance sheet. Behind every line are the transactions that made it, and any line opens to show them. You check the three reports each month, starting with the profit and loss. If you work with an accountant, they review the reports, correct what needs it, and prepare the year-end versions. Either of you can open them any day, and you'll both see the same numbers. Three reports, a few lines each: profit over the period, what's yours on the day, and where the cash went. In the next video, we ask a question that puzzles most owners: why does the balance sheet always balance?
Three reports, a few lines each: profit over the period, what's yours on the day, and where the cash went.
Episode 1.3
The accounting equation · 2:39
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Last time, one line on the balance sheet looked like a trick: what you own, 25,940, exactly equals what you owe plus what's yours. Does it balance because an accountant made it balance, or because of something true about every business? Here's the idea: everything your business owns was paid for by someone. Either by people you still have to pay back, like a lender or a supplier. Or by you, with the money you put in and the profit you left in the business. So what you own always equals what you owe plus what's yours. Accountants call it the accounting equation. Watch it hold from the studio's first day. You put in 12,000. The bank has 12,000, and all of it is yours. The bank lends you 7,200. The bank balance rises to 19,200, and so does what you owe. Both sides moved together, so both sides still match. You buy 6,000 of equipment. Cash falls, equipment appears, and the total you own doesn't change. You invoice Acme 1,200. Now a customer owes you 1,200, and that 1,200 of profit is yours. You pay 1,500 rent. Cash falls by 1,500, and so does what's yours, because rent is a cost. Every transaction changes two things at once, so the two sides can never drift apart. Run the year forward and the figures grow, but the balance holds: 25,940 owned, 7,500 owed, 18,440 yours. What's yours isn't cash in a drawer; it's what would be left if you sold everything you own and paid everyone you owe. That's the business's worth, on paper, on that day. In Fiskl, every transaction you record posts to both sides at once, so your balance sheet balances by construction. If it ever didn't, something was recorded once instead of twice, and that's the first thing to look for. You record the day to day, and watch what's yours move with every sale and every cost. If you work with an accountant, they review the equity section and make the year-end adjustments that keep both sides true. Either of you can open the balance sheet on any day and read what the business is worth. What you own equals what you owe plus what's yours, on every day, because everything you own was paid for by someone. In the next video, we open the cabinet the books are kept in, and see which drawer each transaction goes into: the chart of accounts.
What you own equals what you owe plus what's yours, on every day, because everything you own was paid for by someone.
2. How the books are built​
Episode 2.1
The chart of accounts · 2:29
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Last time, every transaction landed on one of two sides. But where exactly does it go? Into one of five drawers. The list of drawers is what accountants call the chart of accounts. Think of your books as a filing cabinet with five drawers. Three drawers hold what the balance sheet reads: what you own, what you owe, and what's yours. Two drawers hold what the profit and loss reads: what you earned, and what it cost you. Every transaction in the studio's year went into one of them. The invoice to Acme is income. The rent is an expense. The computers are an asset: you still own them. The loan is a liability: you owe it back. And the money you put in is equity: it's yours. Inside each drawer are folders, one for each thing you want to see on its own. Accountants call the folders accounts. The folders are the lines on your reports: the Expenses folders are the running-cost lines of your profit and loss. And the Assets folders are the top lines of your balance sheet: bank, customers who owe you, equipment. So the drawer a transaction goes into decides which report it appears on, and the folder decides which line. Put something in the wrong drawer, and both reports are wrong. File the computers under Expenses instead of Assets, and this year's profit drops to 15,440, while the balance sheet loses its 4,000 of equipment. Put it back in Assets, and both are right again. In Fiskl, the cabinet is the Chart of Accounts page: every drawer and every folder, grouped by type. Fiskl starts you with a sensible set of folders, and adds some for you: connect a bank and its folder appears; set up a tax and so does its folder. Every time you record a transaction, choosing its category is choosing the folder. You pick the folder as you go, and add or rename folders as the business changes. If you work with an accountant, they can add folders too and tell you which to use, and they check nothing sits in the wrong drawer. Either of you can open any folder and see every transaction inside it. Five drawers, three for the balance sheet and two for the profit and loss, and a folder for every line you want to see. In the next video, we take a single transaction and watch it go into two drawers at the same time: every transaction has two sides.
Five drawers, three for the balance sheet and two for the profit and loss, and a folder for every line you want to see.
Episode 2.2
Every transaction has two sides · 2:11
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Last time, the rent went into two drawers at once. Why two? Because every transaction is one event with two effects. Pay the rent, and two things are true: you have less in the bank, and you've spent 1,500 on rent. Both are the same 1,500, seen from two drawers: assets and expenses. Send Acme an invoice, and again two things are true: Acme owes you 1,200, and you've earned 1,200. When Acme pays, two more: the bank goes up by 1,200, and Acme owes you nothing. Notice this one didn't touch income at all: you earned the money when you did the work, not when it arrived. Borrow 7,200, and the bank goes up while what you owe goes up by the same amount. Buy the computers, and 6,000 moves from the bank to equipment: still yours, in a different form. Five events, ten effects, always in pairs. And in every pair the two sides are equal, which is what keeps the balance sheet balanced. Accountants have names for the two sides: debit and credit. They aren't good and bad, or plus and minus. They're just left and right. You don't need the words to run the business, but when you see them on your accountant's reports, you'll know what they mean: the two sides of one event. In Fiskl, you record the event, an expense, an invoice, a bank line, and Fiskl writes both sides for you. Open any transaction and you see the two drawers it touched. And the ledger keeps every entry drawer by drawer, so either side can be traced back to the event. You record what happened, as it happens. If you work with an accountant, they record the rare entries that have no event behind them, like a year-end correction. Fiskl calls those journal entries. Either of you can open any transaction and see both of its sides. One event, two effects, always equal: that's double entry, and it's why the books balance. In the next video, we ask when a sale counts: the day you send the invoice, or the day the money arrives?
One event, two effects, always equal: that's double entry, and it's why the books balance.
Episode 2.3
Cash or accrual · 2:25
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Last time, a payment arrived and touched no income, because the money was earned when the work was done. But was it? That's the question: when does a sale count, the day you send the invoice, or the day the money arrives? Say you finish Acme's work in December and send the invoice on the 20th. Acme pays on the 15th of January, in the new year. So which year gets the 1,200? There are two honest answers, and accounting has a name for each. The first counts money when it moves: the sale is next year's, because that's when the cash arrived. Accountants call this the cash basis. The second counts the sale when you earned it: this year's, because that's when the work was done and the invoice sent. Accountants call this the accrual basis. The same goes for costs: December's rent, paid in January, is this year's cost on accrual, and next year's on cash. Over a whole year, the two views can differ by thousands. On accrual, the studio made 19,440 this year. On cash, the same year shows 12,540. The gap is the 8,400 customers haven't paid yet, which cash doesn't count, less the 1,500 of rent you haven't paid yet, which cash doesn't count either. Neither is wrong. Cash tells you what you can spend; accrual tells you how the business is actually doing. Which is why most owners run the business on accrual, and watch cash to pay the bills. In Fiskl, the method in Accounting Settings is only a default: the view your reports and dashboard open with, and you can change it whenever you like. Any report can be shown either way at any moment, because Fiskl works every figure out from the transactions on the spot. Switch the view and nothing in your books changes; only when each transaction is counted. You read both: accrual for how you're doing, cash for what's in the bank. If you work with an accountant, they'll tell you which basis your tax return has to use, and prepare it that way. Either of you can flip any report between the two in a moment. A sale counts when the money moves, or when you earned it. Cash or accrual: two views of the same books. In the next video, we look at the tax on that invoice and ask whose money it really is.
A sale counts when the money moves, or when you earned it. Cash or accrual: two views of the same books.
Episode 2.4
Sales tax in plain English · 2:11
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On Acme's invoice there's a line that isn't yours: 120 of tax. Whose money is it? Not Acme's: they've paid it. And not yours, even though it's sitting in your bank. You collected it for the tax authority, and you'll pass it on. Call it VAT, GST or sales tax, depending where you are: the idea is the same. So the 120 isn't income. It's money you owe, kept in its own folder until you pay it over. Your income is 1,200, your profit is built on 1,200, and the 120 never touches it. Now the other direction. You buy a month of software for 300, plus 30 of tax. That 30 went the same way, to the tax authority, through the software company. In many countries you can claim it back, so it offsets what you owe. In some you can't, and it's simply part of the cost. Your accountant will know which applies to you. Here, let's say you can. So over a period you add up what you collected, take off what you can reclaim, and the difference is what you pay. Collected 120, reclaimed 30: you owe 90. And in a period where you reclaimed more than you collected, they owe you. In Fiskl, every invoice and bill line carries a tax rate, and the tax goes straight into that separate folder. The tax is counted on the day the invoice or bill is created, not the day it's paid. The Sales Tax report adds it up for you, for each tax registration and each filing period: collected, reclaimable, and what to pay. You put the right rate on each invoice and bill as you go. If you work with an accountant, they handle the registration, the rules on what you can reclaim, and the return itself. Either of you can open the tax report and see what's owed, any day. The tax on your invoices is money you hold for someone else. Collect it, reclaim what you can, and pay over the difference. In the next video, we follow the sale itself: how a customer's yes becomes a quote, then an invoice, then money you're owed.
The tax on your invoices is money you hold for someone else. Collect it, reclaim what you can, and pay over the difference.
3. Money in​
Episode 3.1
Quotes and invoices · 2:23
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Every sale starts with a yes. But a yes isn't money, and it isn't even a sale yet. So how does a yes become money you're owed? Acme asks what a brand refresh would cost, and you send a quote: 3,600, in three instalments. A quote is a promise of a price, not a sale. Nothing changes in your books. Acme says yes. Still nothing in the books: a promise has been accepted, that's all. The sale happens when you do the work and send the invoice. The moment you send it, two things change: Acme owes you 1,200, and you've earned 1,200. That's the first instalment. The books now hold a sale, and someone owes you for it. Accountants call what customers owe you accounts receivable: money owed to you, on its way in. Every invoice has a due date, and until Acme pays, it sits in accounts receivable. When the money arrives, the invoice is paid, and the amount moves from accounts receivable into the bank. The second and third instalments follow the same path: invoice, owed, paid. So a quote is a promise, an invoice is a sale, and a payment is the money: three different things, on three different dates. In Fiskl, a quote lives in Quotes, with a status that follows the conversation: draft, sent, accepted. Once it's accepted, you turn it into an invoice in one step, and the lines come across. Invoices have their own statuses: draft, sent, paid, and overdue once the due date passes unpaid. The lines on both come from your products and services: a name, a price and a tax rate you set once, and the income folder each one belongs to. You quote, invoice and chase, day to day. If you work with an accountant, they check that what you've invoiced matches what you've earned, and that nothing is missing at year end. Either of you can open accounts receivable and see who owes you what, at any moment. A quote is a promise, an invoice is a sale, a payment is the money. The invoice is the one that goes in the books. In the next video, we follow the payment itself: what happens when a customer pays part of an invoice, pays late, or needs money back.
A quote is a promise, an invoice is a sale, a payment is the money. The invoice is the one that goes in the books.
Episode 3.2
Getting paid · 2:56
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Last time, an invoice created accounts receivable: money owed to you. Now the money comes in, but not always the way the invoice said. Three things happen all the time: a customer pays part, pays late, or needs money back. Start with the normal case. Acme pays the second instalment in full: 1,200 arrives, and accounts receivable drops by 1,200. Payment is simple: whatever arrives comes off what's owed. No more, no less. Now suppose Acme pays 700 of the third instalment and says the rest will follow. 700 comes off accounts receivable; 500 stays there. The invoice is partly paid. Nothing else changes. The sale was 1,200 and still is; only the owed part has shrunk. Now the due date passes with 500 still owed. In the books, nothing moves: 500 was owed yesterday, and 500 is owed today. What changes is the status, and what you do about it. Overdue isn't an accounting event. It's a signal to chase. Now the third case. Acme is unhappy with part of the work, and you agree to take 200 off. You don't edit the invoice. You issue a credit note: a document that reverses part of a sale. The credit note lowers the sale by 200 and lowers accounts receivable by 200, on the day you issue it. No money moves. Acme now owes 300, not 500. If Acme had already paid in full, the credit would sit in accounts receivable as a balance in Acme's favour, to use against the next invoice or to pay back. A refund is the only one of these where money actually leaves your bank: the bank goes down, and the credit in accounts receivable is cleared. In Fiskl, a payment lands on its invoice by itself when it comes through a bank feed or a payment gateway like Stripe or GoCardless, or you record it yourself, and the status follows: Paid, or Partial. Overdue appears on its own when the due date passes, and reminders can go out for you. A credit note is its own document, numbered in its own series and created from the invoice it corrects, and you choose what the credit does: apply it, refund it, or keep it on account. You record payments as they arrive, and decide how to settle a credit. If you work with an accountant, they check that what's owed on paper matches what's really owed, and that credits landed in the right period. Either of you can open any invoice and see what's been paid, what's left, and why. A payment reduces what's owed by what arrived. A credit note reduces the sale, with no money moving. And overdue is a signal, not an event. In the next video, we ask who owes you money right now, how long they've owed it, and how to chase without falling out.
A payment reduces what's owed by what arrived. A credit note reduces the sale, with no money moving. And overdue is a signal, not an event.
Episode 3.3
Who owes you money · 2:17
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Last time, an overdue invoice was a signal to chase. But chase whom first, and how hard? Your accounts receivable is one number. Who's behind it, and for how long, is the real question. At year end, the studio was owed 8,400. That's accounts receivable on the balance sheet. Open it up, and there are three customers behind it. Acme's invoice went out on the 20th of December. It isn't even due yet. Harbour Prints has owed 4,800 for six weeks: a month past due. And Dash Studio has owed 2,400 for over two months. Lining them up by how long they've been owed is what accountants call an aging report. It matters because the older a debt gets, the less likely it is to be paid, and the more it costs you to keep waiting. So the order is clear: Dash first, Harbour second, and leave Acme alone until it's due. Chasing without falling out is a process, not a personality. A reminder a few days before the due date, another on the day, another a week after. The same for everyone, every time. If that doesn't work, send a statement: every invoice and payment for that customer on one page, with the balance. Most disputes end there. If that doesn't work, pick up the phone. It's a conversation about a document, not about them. In Fiskl, the Client Aging report breaks accounts receivable into periods you choose: a month, two, three, and older. Reminders go out on a schedule you set once, for every invoice. And a Statement of Accounts for any customer is one step from the invoice list. You set the schedule, read the aging report, and make the calls. If you work with an accountant, they'll tell you when a debt will never be paid and should be written off, so the books stop counting money that isn't coming. Either of you can see who owes what, and for how long, on any day. Accounts receivable is one number; the aging report is who's behind it and for how long. Chase the oldest first, the same way every time. In the next video, we look at an invoice that says paid, and ask why the customer still seems to owe you in the books.
Accounts receivable is one number; the aging report is who's behind it and for how long. Chase the oldest first, the same way every time.
Episode 3.4
Paid, but not reconciled · 2:42
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Last time we ended on a puzzle: an invoice that says Paid, next to a customer who still owes you in the books. How can both be true? Because paid is a status on an invoice, and the books only believe the bank. Take Acme's second instalment: 1,200. You mark it paid when Acme says the transfer has gone. The invoice says Paid. But in accounts receivable, the 1,200 is still sitting there. Nothing has reached the bank yet, and nothing in the bank has been matched to this invoice. So the books still say: owed. Two days later the transfer lands. A line appears in your bank: 1,200 from Acme. Matching that bank line to the payment on the invoice is called reconciling. Only then does the 1,200 leave accounts receivable. So an invoice can be paid but not reconciled, and until it's reconciled, the books haven't been told. Reconciliation is per payment, not per invoice. Take the third instalment: 1,200, with 700 paid so far and 500 still to come. If that 700 has been matched to the bank, the invoice is partly paid, but every payment on it is reconciled. And the books agree with it: 500 owed, no more. When you see "paid" and "owed" disagree, the Accounts Receivable aging report is your friend: it only ever shows what the bank hasn't confirmed. Reconcile the payment and the line disappears, because now the books know. In Fiskl, every paid or partly paid invoice carries a second line under its status: Not reconciled, Partially reconciled, or Reconciled. A Needs reconciling tab shows only the invoices whose payments the bank hasn't confirmed yet, and Reconcile payment takes you straight to the match. Filter the list to one customer, or open the customer's record, and you see the summary that matters: marked paid on invoices, and still owed in your books. When the two disagree, that's your to-do list. You mark invoices paid as customers tell you, and you reconcile when the bank shows the money. If you work with an accountant, they'll want every payment reconciled before they trust the receivables, because unreconciled payments are the first thing they chase at year end. Either of you can open a customer and see, in two numbers, what's marked paid and what the bank has actually confirmed. Paid is a status; reconciled is the bank agreeing. Until the bank agrees, the books still say owed. In the next video, we turn to money going out, and ask what you really owe your suppliers.
Paid is a status; reconciled is the bank agreeing. Until the bank agrees, the books still say owed.
4. Money out​
Episode 4.1
Bills and who you owe · 2:32
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We've spent three videos on money coming in. Now the other direction: the bills. A bill is an invoice seen from the other side. Someone did work for you, and now you owe them. The moment the bill arrives, two things are true: you've had the cost, and you owe the money. Accountants call what you owe your suppliers accounts payable: money you owe, on its way out. It's the mirror of accounts receivable. Record the bill when it arrives, not when you pay it, and two good things happen. First, the cost lands in the right month, so this month's profit is honest even before the money leaves. Second, you can see what's coming: every bill you've recorded but not paid is a payment you know is on its way. Line them up by due date, and you have a plan for the month's cash. Paying a bill is simple: the money leaves the bank, and the bill leaves accounts payable. The cost doesn't move; it was counted when the bill arrived. By the end of the month, two are paid and one is still owed: the rent, due on the 31st, paid in January. That 1,500 is the accounts payable on the year-end balance sheet, and it's why December's rent counted this year even though it was paid next. A bill you pay on the spot, by card or transfer, skips all this: it's a cost and a payment in one go, and it never sits in accounts payable. So record the bills you'll pay later, and let the ones you've already paid come in from the bank. In Fiskl, you record a bill in AI Expenses: upload the supplier's invoice or type it in, and it's saved to Accounts Payable with its vendor, category and due date. When the payment shows up in your bank, you match it to the bill, and the bill is paid. Your category stays where you put it. The Expenses report shows every bill by category with its status: unpaid, overdue once the due date passes, or paid. Your vendors live under Purchasing, so every bill is tied to who you owe. You record bills as they arrive and pay them by their due dates. If you work with an accountant, they'll check at year end that every bill for the year is in, so the costs and what you owe are both complete. Either of you can see what you owe, to whom, and when it's due. A bill is a cost when it arrives and money you owe until you pay it. Record it when it arrives, and you can plan the month. In the next video, we look at the one choice on every bill that decides where it shows up in your reports: the category.
A bill is a cost when it arrives and money you owe until you pay it. Record it when it arrives, and you can plan the month.
Episode 4.2
Categorising spending · 2:44
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Last time, the rent bill got one word: Rent. That word is its category, and it decides where the 1,500 lands in your reports. Every cost you record gets one. So how do you choose it, and what happens when it's wrong? Choosing a category is choosing a folder in the cabinet, and each folder is a line on your profit and loss. The rent was easy. So is the software: it goes on the Software line. Jo Mills is harder: a freelance designer who worked on a client's project. That isn't a cost of running the studio. It's a cost of the work you sell. Remember, accountants call that cost of sales, and it comes off first, at the top of the profit and loss. What's left is gross profit, 67,000: what your sales leave once the work is paid for. Take off the running costs, and the studio's profit is 19,440. Now file Jo Mills under Professional fees, next to your accountant: both are people you pay for a service. The profit doesn't change: still 19,440. But gross profit rises to 69,000. That's the line that tells you whether your prices cover the work. Put it back, and it's honest again. The category is half the choice. The other half is the tax rate. With the right rate, the software costs you 300, and the 30 of tax goes to its own folder, to claim back. So for the period you pay the tax authority 90: the 120 you collected, less the 30. Leave the rate off, and the whole 330 is cost: profit is 30 lower, and you pay 120. In Fiskl, every expense line has a category and a tax rate. AI Expenses reads the tax off a bill and suggests the category. Costs from the bank get a category too, from your rules and past choices first and Fiskl's AI when it's sure, but the tax rate is always yours. Finish the same merchant the same way twice, and Fiskl offers a rule, so it's filed right from then on. You choose the category and the rate as costs come in, and turn the regular ones into rules. If you work with an accountant, they review the categories and rates, especially cost of sales, and move anything that belongs elsewhere. Either of you can open the profit and loss and see every cost on its line. The category decides which line a cost is on, and the tax rate decides how much of it is cost. Get both right, and your reports are right. In the next video, we ask why a coffee is a cost the day you buy it, but the computers are spread over three years.
The category decides which line a cost is on, and the tax rate decides how much of it is cost. Get both right, and your reports are right.
Episode 4.3
Expense or asset · 2:40
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Last time, we left two purchases hanging: a coffee for 12, and the studio's computers and camera for 6,000. Both left the bank the day you paid. So why is one a cost that day, and the other isn't? The coffee is used up the day you buy it. So it's an expense, and the whole 12 goes on this year's profit and loss. The computers aren't used up. You'll still be working on them next year, and the year after. Something you keep using for years is something you own, so it goes in Assets. Accountants call it a fixed asset. But it does wear out, and each year that uses it should carry its share of the cost. So the 6,000 is spread over the three years it will last: 2,000 a year. Accountants call that depreciation. Each year, 2,000 moves from the asset into your expenses. So this year's profit and loss shows a 2,000 cost for the computers, not 6,000. And the balance sheet shows what's left to use: 6,000, less 2,000, so 4,000. Next year, another 2,000 moves across. After three years it's down to nothing, just as the computers reach the end of their working life. Your bank felt all 6,000 on the day you paid. Only the profit is spread. Put the computers in expenses instead, and this year's profit drops by 4,000, while the next two years each look 2,000 better than they were. Spread, every year that uses the computers carries its share, and each year's profit is honest. In Fiskl, you record the purchase against a fixed-asset folder, like Equipment, so it lands on the balance sheet. Then it goes in the Fixed assets register, with its cost and the years it will last. Fiskl works out the whole plan up front and posts the depreciation as it falls due, so you never do the sums. The register shows what each asset is still worth on your books: Fiskl calls it net book value. You record what you buy, and put anything that will last for years in the register. If you work with an accountant, they'll tell you where the line sits between expense and asset, and how long each kind of asset should last. Either of you can open the register and see everything you own, what it cost, and what's left of it. A coffee is used up today, so it's a cost today. Something that lasts for years is an asset, and its cost is spread over the years that use it. In the next video, we look at more money that leaves the bank without being a cost: what you take out for yourself, loan repayments, and moving money between your own accounts.
A coffee is used up today, so it's a cost today. Something that lasts for years is an asset, and its cost is spread over the years that use it.
Episode 4.4
Owner money, loans and transfers · 2:36
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Last time, three payments left the bank, and none of them was a cost. Money for yourself, a loan repayment, and a move to savings. If they're not costs, where do they go? Start with money going the other way. When the studio opened, you put in 12,000 of your own. That isn't income: no customer paid it. It's yours, so it goes in Equity. Taking money out works the same way in reverse. This year, you took out 13,000 for yourself. That isn't a cost of running the studio either. It comes off your equity, and what it's called depends on how the business is set up. So your equity is what you put in, plus the profit, less what you took out: 18,440. You took out more than you put in, and that's fine: the profit covered it. A loan is the same idea with someone else's money. The bank lent the studio 7,200. That isn't income either, because you owe it back. It goes in Liabilities. Each repayment makes what you owe smaller. You've repaid 1,200, so you owe 6,000. The repayment isn't a cost. Only the interest is: 200 this year, the price of borrowing. And moving 5,000 into savings is neither: it's still your money, in another account. Accountants call it an internal transfer. Your cash is 13,540 either way. None of these touch your profit. They show up on the cash flow report, under financing. In Fiskl, you give these bank lines a folder like any other: money you take out in Equity, the loan in Liabilities. A transfer between your own accounts is matched, not categorised: Fiskl pairs the money leaving one account with the money arriving in the other. The Cash Flow report keeps them under financing, apart from the money the business earned and spent. You give each of these lines its folder as it comes in, and match your transfers. If you work with an accountant, ask them how you should take money out: a sole trader takes drawings, and a company pays a salary, a dividend or a director's loan, each recorded differently. Either of you can open the balance sheet and see what you've put in, taken out, and still owe. Money you put in, take out, borrow, repay or move between your own accounts isn't income or a cost. It changes what you own and owe, not your profit. In the next video, we look at what to do when you're not sure where something goes: ask before you record it.
Money you put in, take out, borrow, repay or move between your own accounts isn't income or a cost. It changes what you own and owe, not your profit.
Episode 4.5
Ask Fi how to record it · 2:02
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Last time, we ended on a bank line you might not be sure about: a loan repayment of 100. Is it all repayment, or is some of it interest? Guess, and the guess goes into your books. Book every one as interest, and by the year end your costs are 1,200 too high, and the loan still looks like 7,200 owed. And a guess repeats: Fiskl learns from what you confirm, so next month's line gets the same answer. Confirm it the same way twice, and Fiskl offers to make it a rule, so every one after that arrives wrong without you. Fixing it later means finding it first. It's easier to ask before you record it. The questions worth asking are the ones you've met in this part of the series. Is it a cost, or something you'll own for years? Which line does it go on, and with which tax rate? Is it a cost at all, or money put in, taken out, borrowed or moved? A good answer has three parts: where it goes, the tax rate, and why. In Fiskl, you ask Fi, the assistant in the top right of every screen. Fi sees the screen you're on, so you can ask about the line in front of you. Fi knows your books, so it answers for your business: the 100 is repayment, so it goes to the loan. The interest comes on its own line, 50 a quarter, and that's a cost. When you agree, Fi can record it for you, and every change it makes is in the Audit Log. You ask before you record, especially the first time a new kind of payment arrives. If you work with an accountant, there's less for them to resolve, so their time goes on the judgement calls only they can make. Either of you can ask Fi about any line, and see in the Audit Log what was changed and by whom. Not sure where something goes? Ask before you record it: a minute's question saves a year of wrong numbers. In the next video, we start on the bank itself: how your bank's transactions get into Fiskl in the first place.
Not sure where something goes? Ask before you record it: a minute's question saves a year of wrong numbers.
5. The bank and reconciliation​
Episode 5.1
How bank connections work · 2:18
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Last time, we left your bank on one side and Fiskl on the other. So how do your transactions get across? And does Fiskl need your bank password to do it? No. Between your bank and Fiskl sits a provider: a company whose whole job is talking to banks, like Yodlee or Salt Edge. You sign in at your bank, through the provider, and choose which accounts to share. Fiskl never sees your password. And the connection only reads. It brings your transactions in to build your books, but it can't move money, and Fiskl never holds your bank details. That link is the bank connection. From then on, the provider fetches your transactions every day, and Fiskl collects them. The first time, it brings in your history. After that, each day's new lines. Each account you share gets its own feed, and each feed writes into one folder: your current account, under Assets. Every line arrives as a finished entry, with one side already known: money in or out of that account. The other side starts as uncategorised, until it's given a home. First, Fiskl checks whether the line matches something it already has: an invoice, a bill, or a transfer. If not, your rules, your past choices and Fiskl's AI suggest where it goes. So the bank fills in half of every entry. The half it can't know is what the money was for. And if a bank has no feed, you can import its statement instead, and the lines land in the same folder. In Fiskl, each connected account has a card in Banking. The card shows the bank's balance, when it last synced, and the folder the feed writes into. When the bank's balance and your books differ, the card shows the gap as the difference to bank. You connect your banks once, and glance at the cards now and then to see each one is up to date. If you work with an accountant, they see the same lines you do, straight from the bank, with nothing for you to send. Either of you can open the bank's folder and see every line, just as it arrived. A bank connection is a daily feed: the provider fetches your lines, and each one lands in its bank's folder, half filled in. In the next video, we ask how you can be sure the books and the bank really agree.
A bank connection is a daily feed: the provider fetches your lines, and each one lands in its bank's folder, half filled in.
Episode 5.2
What bank reconciliation is · 2:39
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Last time, we ended on two numbers that agree: the bank says 8,540, and so do your books. But two totals agreeing isn't proof. How do you know every line behind them is right? You check them against each other, line by line, one month at a time. That's bank reconciliation. The bank is the judge. Whatever it says happened, happened, and your books have to agree with it, not the other way round. Take December. Your bank statement says the month closed at 8,540. Your books, before checking, say 8,550: ten more than the bank. That gap is the difference, and the job is to explain it until it's zero. First, pair every line on the statement with the same line in your books: same amount, and the same day or close to it. Jo Mills, 2,000. The print shop, 90. Software co, 330. Each one pairs up. One statement line has no partner: a bank fee of 10 that never reached your books. Lines go missing for a few reasons: one was deleted by mistake, the feed didn't reach back far enough, or the provider's feed skipped it. Add it, and the difference drops to zero. Every line is paired. Now December is reconciled: you've proved your books and the bank agree, line for line. And if anyone changes a December line later, it's no longer proved, and the month asks to be checked again. In Fiskl, each account has its own reconciliation, one period at a time, each starting where the last one ended. You type in the statement's closing balance and upload the statement as your bank gives it, and Fiskl pairs the lines and joins each pair. Whatever's left goes in Needs Attention: on the left, lines in your books the bank doesn't agree with, usually to delete or correct; on the right, bank lines to add to Fiskl. When the difference is zero and every line in your books is matched, the Reconcile button appears, and the month is marked reconciled. You reconcile each account every month, and fix things on the Fiskl side, because the bank is right. If you work with an accountant, reconciled months are the ones they can trust without checking again, and the first thing they look for at year end. Either of you can see which months are reconciled and which need attention. Reconciling proves your books match the bank, line by line and month by month, until the difference is zero. In the next video, we ask what happens when the bank feed stops: what breaks, what doesn't, and how to fix it.
Reconciling proves your books match the bank, line by line and month by month, until the difference is zero.
Episode 5.3
When a bank connection drops · 2:20
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Last time, we ended on a break in the line between your bank and Fiskl. Your feed has stopped. So what have you lost? Nothing that's already in your books. Every line, every category and every reconciled month stays exactly where it is. What stops is the flow: new lines from the bank don't arrive until the link is mended. Most often it's routine. Banks ask you to sign in again every so often, for security, and the feed waits until you do. Sometimes the bank or the provider has a problem of its own, and the link drops for a while. Either way, the fix is to renew the link, not to start again. Renewed, the same connection carries on into the same folder, and the lines from the days it was down come through. Most feeds can reach back about a year, so only a very long gap can leave lines behind, and reconciling will show you if it has. Starting again from scratch is where copies come from. A brand new connection gives each account a new ID, so Fiskl can't tell it's the account you had. Left to itself, it would make a second folder and fill it with your history again: two accounts, and every line twice. So when Fiskl asks where each account should go, pick the one you already have. Then the feed carries on into your original folder, and nothing it already holds comes in twice. And don't disconnect to fix things. That only stops the feed, and everything else stays as it was. In Fiskl, a dropped connection shows as a warning on its card in Banking. Reconnect on the card renews the link: you sign in at your bank, and the feed picks up again. If a copy has already slipped in, Change linked account on the copy's card brings it back into one, and shows you what will change first. You keep an eye on the cards, and reconnect when a bank asks. It takes a minute. If you work with an accountant, they'll spot a gap in the lines, but only you can sign in at your bank, so the reconnect is yours. Either of you can see on each card when it last synced. When a feed drops, your books stay put and only new lines stop. Renew the link, don't start again, and nothing is copied or lost. In the next video, we ask how often to reconcile, and what usually stops the two sides matching.
When a feed drops, your books stay put and only new lines stop. Renew the link, don't start again, and nothing is copied or lost.
Episode 5.4
Reconciliation habits · 2:23
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Last time, we ended on an empty Needs Attention list, waiting to be filled. So how often should you reconcile, and what usually turns up? Most owners do it every month, as soon as the statement arrives. Some prefer each quarter; monthly is easier. A month is a few dozen lines and one or two differences: minutes. A year is hundreds, and a difference from March is hard to explain in December. And what turns up is nearly always one of four things. One: a line on the statement that isn't in your books, like a bank fee or interest. You add it. Two: a line in your books that the bank doesn't have: a duplicate, an entry made by mistake, or a payment that hasn't cleared yet. Delete the mistakes. If it simply hasn't cleared, move the date on your entry into next month, where it will. Three: the same transaction, but the amounts differ, usually a typing slip. Fix your figure to the bank's. Correct it rather than delete it, so it keeps its category. Four: the same amount on different days, because the bank processed it later. Those you simply match. And never nudge the statement balance to make the difference go away. A forced zero only hides the mistake until next month. If every line is matched and a difference is still left, look for a line in your books twice, or a pair matched wrongly. In Fiskl, the Bank Reconciliation screen puts your books on the left and the bank on the right, and every card in Needs Attention names its problem. Each card offers its fix, and the difference counts down as you go. If a reconciled month changes later, it moves to Needs attention. Reconcile it again the same day, because each month builds on the one before. You reconcile each account every month, while it's still fresh. If you work with an accountant, Atlas flags them when your bank lines go unmatched or a feed goes quiet, so they can nudge you well before year end. Either of you can see every month at a glance: reconciled, or needing attention. Reconcile every month, fix the four usual things on your side, and never force the difference to zero. In the next video, with your books matching the bank, we read the first report they give you, and ask: am I making money?
Reconcile every month, fix the four usual things on your side, and never force the difference to zero.
6. Reading your numbers​
Episode 6.1
Reading your profit and loss · 2:56
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Last time, your books matched the bank. Now they can answer the first question: am I making money? Most owners look at the last line, nod or wince, and close it. But the answer isn't in that one number. A profit and loss is a story told top to bottom, in four steps. First, what you earned: every sale in the period, paid or not. Your revenue, 98,000. Second, what those sales cost to deliver: the freelancers on client work, 31,000. What's left is gross profit, 67,000: of every hundred you sold, about 68 stayed to run the studio. If that's thin, look at your prices or the cost of the work, not at the rent. Third, the costs of keeping the doors open, paid whether you sell or not: rent, the assistant, marketing, software, and the rest. Accountants call them operating expenses, and what's left is operating profit, 19,640: what running the studio made this year. Fourth, anything that isn't the studio. Here, the interest on the start-up loan, 200: the price of borrowing, not of designing. Take it off and you reach net profit, 19,440. The number you nodded at, now with its story behind it. The report comes alive when you read changes, not numbers. Put two periods side by side. In the second half, revenue rose from 44,000 to 54,000. Good news. But the freelancers rose from 13,000 to 18,000. Half of every extra sale went straight out to contractors: growth that keeps less of each sale than before. When a line surprises you, open it. Every figure is the total of the transactions behind it. In Fiskl, the Profit and Loss report on the Reports page is this same sheet, with Fiskl's headings. You choose the period, and Compare Periods puts earlier ones beside it: the last few quarters, or the last few years, with the difference in money and in percent. Accrual or cash is a switch on the same report, and changes only when each sale and cost is counted. Any total opens to the transactions that made it, and each of those to the invoice or bill behind it. You read it every month, top to bottom, and ask what changed since last month. If you work with an accountant, they check each cost sits on the right line and prepare the year-end version. Either of you can open the same report any day and see the same four steps. What you sold, less the cost of the work, less the cost of the studio, less what isn't the studio: four steps to what you made. In the next video, we turn to the second question, what do I own and what do I owe, and read the balance sheet the same way.
What you sold, less the cost of the work, less the cost of the studio, less what isn't the studio: four steps to what you made.
Episode 6.2
Reading your balance sheet · 3:13
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Last time we read the profit and loss, the story of a year. The balance sheet is different: a photograph of one day. You know its shape: what you own, what you owe, and what's yours. The question is what to look for. Read it as three questions. Can I pay what's due soon? What am I carrying? And what's mine, and why did it change? Start with what you own: cash in the bank, the invoices customers haven't paid, and the equipment. First: can I pay what's due soon? Sort both sides by when, and the sheet answers it. Soon, on your side: cash, and the money on its way from customers. Together, 21,940. Accountants call these current assets. Soon, on the other side: the rent bill, and the coming year's loan repayments, 1,200. Together, 2,700. Current liabilities. 21,940 to cover 2,700: the studio can pay its way many times over. If those two were close, you'd be watching the bank every morning. Second: what am I carrying? Below the line sit the slow movers: the equipment at cost less what's already been counted, 4,000, and the loan still to repay after this year, 4,800. Third: what's mine? 18,440: what you put in, plus the profit, less what you took out. Only one of those is the business earning anything. What's yours grows by profit left in, and by nothing else. Now watch the day matter. Two weeks on, Acme has paid its 1,200 and you've paid the rent. Cash is 13,240, customers owe 7,200, nothing is unpaid: you own 24,440 and owe 6,000. But what's yours is still 18,440. Collecting and paying move money between lines; only profit moves what's yours. In Fiskl, the Balance Sheet report is this same sheet with Fiskl's headings: current and long-term on both sides, then equity. You choose the day, and Compare Periods puts two days side by side to show each line move. Any total opens to what's behind it: accounts receivable, to the three invoices still unpaid. And you can ask Fi the first question in your own words. You read it every month: what's due soon on both sides, then what's yours and why it moved. If you work with an accountant, they prepare the year-end version: the depreciation, the loan split into soon and later, which only appears if one of you records it, and the right equity names for how you're set up. Either of you can open it on any day and see the same three answers. What you own, what you owe, what's yours, on one day. Ask what's due soon on both sides, and remember only profit moves what's yours. In the next video, we take the question every owner asks: the report says I made 19,440, so why did the bank only rise by 13,540?
What you own, what you owe, what's yours, on one day. Ask what's due soon on both sides, and remember only profit moves what's yours.
Episode 6.3
Why profit is not cash · 3:12
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Last time we ended on two numbers from the same books: a profit of 19,440, and a bank balance that rose by 13,540. Both are true. So where did the other 5,900 go? Profit counts what you earned and what it cost. Cash counts what arrived and what left. They differ for four reasons, and you can follow every unit. Reason one: you sold work customers haven't paid for yet. 8,400 is counted as revenue, and none of it is in the bank. Take it off. Reason two runs the other way: December's rent is counted as a cost, but you hadn't paid it. Add it back. Reason three: depreciation. 2,000 of this year's cost, but the cash left when you bought the computers. Add it back too. That leaves 14,540: what the day-to-day business actually turned into cash. Accountants call it operating cash flow. Reason four: cash that moved without touching profit at all. First the computers themselves: 6,000 out, counted as a cost only slowly. Then money that was never yours or never a cost: the loan in, repayments out, what you put in and took out. Together, plus 5,000. 14,540, less 6,000, plus 5,000: 13,540. The gap is explained to the last unit. Now the warning. Same year, but your customers owe 10,000 more. Same profit, 19,440. And 3,540 in the bank, with 2,700 due soon. That is how a profitable business runs out of money: not by losing, but by waiting to be paid. Profit is the year's story. Cash is what you can spend tomorrow. You need both, and you need to know why they differ. In Fiskl, the Cash Flow report tells this story in three sections, operating, investing and financing, from the cash on day one to the cash on the last. Read the operating section first. Positive, and the business feeds itself. Negative, and either customers are slow or costs are climbing. The report is only as true as your reconciliation: every bank account matched, or the closing cash isn't really the bank's. And the lever is almost always reason one. The aging report shows who owes you and for how long; chase it, and the gap closes. You read profit and cash together every month, and ask why they differ this time. If you work with an accountant, they check which section each account falls in, and explain the one-offs: a loan drawn, equipment bought, money taken out. Either of you can open it for any period and see where the cash went. Profit is what you earned; cash is what arrived. Unpaid invoices, unpaid bills, depreciation, and money that was never profit: that's the whole gap, every time. In the next video, we pick a handful of numbers from these three reports to watch every month, and ask: which ones warn you early?
Profit is what you earned; cash is what arrived. Unpaid invoices, unpaid bills, depreciation, and money that was never profit: that's the whole gap, every time.
Episode 6.4
Five numbers to watch · 2:51
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Three reports, dozens of lines. You can't watch them all, and you shouldn't try. Pick five numbers. Each one warns you about something before it turns into a problem. Each is two lines from your reports, one divided by the other. Accountants call them ratios; you already think this way when you say "of every hundred". One: of every hundred you sell, how much is left after the work is paid for. 67,000 of 98,000: 68. Your gross margin. If it slides month by month, your prices haven't kept up with what the work costs. Fix the price or the delivery, not the rent. Two: what's due to you soon against what you owe soon. 21,940 against 2,700, about eight to one. The current ratio. Below one, you can't pay what's due without borrowing, and this number drops long before the bank balance does. Three: how many days customers take to pay you. Your terms say 14; on average they pay in 24. If that creeps to 30, then 40, your cash arrives later every month, with exactly the same profit. Four: how much of what you're owed is overdue. At year end, 7,200 of 8,400: 86 percent. The aging report in one number. One late client is a conversation. Most of your receivables late is a pattern, and you chase it the same way every time. Five: months of running costs in the bank. 13,540 against about 3,950 a month: three and a half months. That's your cushion. Under two, a slow month becomes a crisis. Watch this one before anything else. In Fiskl, the Dashboard shows these the moment you log in: Key Metrics, Financial Ratios and the AR Aging, all filled from the same books. They update as you work, and selecting any one opens the report behind it. Ask Fi what happens to your cash if your largest client pays 30 days late, and it works it through month by month. And when invoices are overdue, Fi ranks them by risk and tells you whom to chase first. You glance at the five every week, and read the reports behind them every month. If you work with an accountant, they'll add the numbers that matter for your trade, and tell you where yours should sit. Either of you can see all five on the same dashboard, on any day. Gross margin, current ratio, days to get paid, overdue share, months in the bank: five numbers that warn you early, each two lines from reports you can already read. In the next video, we put all of it into one short routine, and ask: what do I actually do each month?
Gross margin, current ratio, days to get paid, overdue share, months in the bank: five numbers that warn you early, each two lines from reports you can already read.
7. Working with your accountant​
Episode 7.1
Your monthly routine · 2:35
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Last time, we ended on four words: reconcile, chase, review, ask. Together, they're the whole month's work on your books. Done in order, it's an hour or so, not a weekend. And the order matters, because each step makes the next one honest. One: reconcile. Match every bank account to its statement and fix the four usual things, the way we did in module five. Until the books match the bank, nothing else you read is true. So it comes first. Two: chase. Open the aging report, start with the oldest, and send the reminders. Fi ranks who to chase and drafts the reminder, and Fiskl can send reminders on a schedule, so most months this step is checking that it happened. Three: review. Open the three reports in order: the profit and loss top to bottom, the balance sheet by when, the cash flow by its four reasons. Then the five numbers. The question is never "what is it" but "what changed since last month". Four: ask. Anything that surprised you, ask about now, while the month is fresh: your accountant, or Fi. And ask Fi to review the month before you move on. It checks for uncategorised transactions, duplicates, future-dated entries and unmatched transfers, and lists what to resolve. When the list is empty, the month is done. And when every month is done, year end is a formality. Miss a month, and the next one takes twice as long: the lines pile up and your memory of them fades. In Fiskl, the four steps live in four places: Bank Reconciliation, the Client Aging report, the Reports page, and Fi. The Dashboard ties them together: overdue invoices in red, the state of each bank account, and the five numbers, so you can see at a glance which step needs you. Fi's review ends with a list. Resolve it, and the month is ready to lock, which is a video of its own later in this module. You run the four steps once a month, in order, and keep the list short. If you work with an accountant, they see the same months from Atlas: which are reconciled, what's unresolved, and where to step in on the ask step. Either of you can see where the month stands, any day. Reconcile, chase, review, ask: four steps, in that order, once a month. That's the routine, and it keeps every other video in this series true. In the next video, we cross to your accountant's side of the glass and ask: what do they actually see in Atlas?
Reconcile, chase, review, ask: four steps, in that order, once a month. That's the routine, and it keeps every other video in this series true.
Episode 7.2
Meet Atlas, your accountant's portal · 2:48
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Last time we stopped at the glass, on your accountant's side. Let's cross over. This is how the handover used to go: you exported, you emailed, and a week later they asked about a number from last quarter. In Fiskl, there is no handover. You both work in the same books, through two doors. Your door is Fiskl. Theirs is Atlas: a free workspace built for accounting firms, where every client is a row. You open the door from your side. You invite them from External Access, and the invitation lands in their Atlas. When they accept, your studio appears on their list, and one button, Access Fiskl, opens your books. No second sign-in, no export. What they see is what you see: the same reports, the same bank, the same December. What they can do depends on the level you give them: full access by default, read-only, or the ledger alone. The next video is about that. But Atlas is more than a door. It watches. Across every client it reads twelve signals: overdue receivables, a stale bank feed, a tax filing due, cash running low. For the studio at year end, it would raise two: overdue receivables, 7,200, and the year end itself coming up. Every item is ranked: critical, due soon, watch. Your accountant sees your studio among their clients, ordered by who needs them first. And Atlas drafts the note to you from the figures on screen. They read it, edit it, and send it from their own email. That's the time it saves you both. They find out before you call, and you hear about it in a sentence, not a spreadsheet. On your side, External Access shows who has access to your books and since when, and you can revoke it in one step. On theirs, your client page holds what they know about you: the team's note, the documents you share, and the advisory items. Every change they make lands in your books with their name on it, in the Audit Log. That gets its own video too. And at year end, they build the accounts from the ledger you kept all year. No reconstruction, no box of receipts. You keep the routine, you invite them, and you choose the level of access. If you work with an accountant, they work the Advisory list each morning and open your books the moment a signal fires, not at year end. Either of you can open the same books, from either door, any day. Two doors, one set of books. Your accountant sees what you see, is told what needs doing before you call, and writes to you from the figures. In the next video, we ask who can do what: how to give a bookkeeper, a manager or your accountant exactly the access they need, and nothing more.
Two doors, one set of books. Your accountant sees what you see, is told what needs doing before you call, and writes to you from the figures.
Episode 7.3
Who can do what · 2:58
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Last time we met the people who might work in your books besides you: a bookkeeper, a manager, your accountant. What should each be able to do? The temptation is to give everyone everything, because it's quicker. Then one day someone changes a tax rate, and nobody meant to. The rule is older than software: give each person what their job needs, and nothing more. Accountants and auditors call it least privilege. In Fiskl, access comes in two steps. First you pick a preset: a ready-made bundle for a common job. Take the studio. Priya raises the invoices and chases them. Invoice Only: clients, invoices, quotes, and recording what's paid. No accounting, no banking. A bookkeeper one day a week: Bookkeeper. Day-to-day invoices, bills, payments and reconciliation, but they can't change the tax set-up or close a period. Your accountant: the Accountant preset. Full bookkeeping through to period end and tax, with every report, but no team management or integrations. If they work from Atlas, the level you set there does the same job, and Read-only is right for anyone who should see everything and change nothing. And you? You're the Owner: everything, including the subscription, and the only one who can end the account. There's exactly one. Second step: fine-tune. Every preset opens into a grid, and most areas separate seeing from changing. So a bookkeeper can see the reports but not post to the ledger, or edit invoices but not delete them. Change one cell, and the preset simply becomes Custom. A few permissions carry a shield: tax rates, the bank details on an invoice, closing the ledger, inviting users. Fiskl asks you to confirm before granting one. Give those only to people who genuinely need them, which is usually you and your accountant. Access lives under Team Members: who's in, what preset they hold, and whether they've accepted the invitation. Your accountant appears there too, marked External, because their access is managed from External Access and Atlas, not from here. Change someone's access and it applies at once, even to anything they've connected: a key or an app can never do more than the person who made it. You pick the narrowest preset that covers the job, and you remove access the day someone leaves. If you work with an accountant, they take the Accountant preset or an Atlas level, never Admin, and they can tell you which shields they actually need. Either of you can open Team Members and see who can do what, at a glance. Pick the preset that matches the job, fine-tune if you must, confirm the shields, and review it when roles change. Everyone gets what they need, and nothing more. In the next video, we ask the question access only half answers: who changed what, and when? That's the audit log.
Pick the preset that matches the job, fine-tune if you must, confirm the shields, and review it when roles change. Everyone gets what they need, and nothing more.
Episode 7.4
The audit log · 2:58
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Last time, access decided who could change the books. This time: who did, what, and when. Every set of books meets this question eventually: this number used to be different. Who changed it? Without a record, the answer is a guess, and a conversation nobody enjoys. With one, it's a lookup. Fiskl keeps that record for you. Every change to a transaction, a client, a payment, a setting or a document is written down: who, what, when. Accountants call it the audit trail. Take the typing slip from module five: software, 303 instead of 330. When you fixed it, the log wrote: Software co, amount, 303 to 330, Maya, the 14th of January. Open any entry and you see the fields that changed, before and after. Nothing is overwritten. The old value is kept. Not every change is a person. The bank feed, a payment provider, a scheduled journal, Fi: these write to your books too, and the log records them as System, naming the process. So when Jo Mills' payment appeared in your books, the log says the bank feed created it, not you. Delete a transaction, and it leaves your books but not the log. The last state is kept, with where it came from. That's what protects you both. You can show what you did. Your accountant can see what changed since they last looked, and by whom. A mistake gets traced, not argued about. The log answers a second question too: did they get the email? Every invoice and quote Fiskl sends is tracked: delivered, bounced, marked as spam. Remember Harbour Prints, 45 days late? Before you chase again, check: Bounced. The address is wrong, and the reminder never arrived. In Fiskl, the Audit Log sits under your avatar, with two tabs: Changes and Email delivery. Changes lists newest first, and four filters narrow it: the date, the kind of record, what happened, and who did it, including System. For one transaction you don't need the log at all. Open it, and View history shows its changes in place. And the log is readable by read-only roles on purpose, so your accountant can check the history without being able to change a thing. You look it up before you ask, and you read the email tab before you resend an invoice. If you work with an accountant, they read what changed since their last visit, and the log shows you their corrections too, with their name on each. Either of you can trace any figure back to who set it, and when. Who changed what, and when, and did the email arrive: the log keeps every answer, including the ones about System and the ones about you. In the next video, we ask when figures should stop changing at all, and what locking the books actually does.
Who changed what, and when, and did the email arrive: the log keeps every answer, including the ones about System and the ones about you.
Episode 7.5
Locking the books · 2:55
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Last time, the log told you who changed a figure. This time, the question underneath: when should figures stop changing at all? You've reconciled December, reviewed the reports, maybe filed the tax. Then in March someone finds a receipt dated the 28th of December and adds it. Nothing dramatic. But December's profit just moved, after you'd told the tax office what it was, and nobody noticed. Finished figures should stay finished. Accountants call it closing the period, and in Fiskl it's a lock. A lock is one date. Everything on or before it is closed; everything after is open. Lock the 31st of December, and the whole year behind it is final. Inside the lock, nothing that would change the figures can happen: no new transactions, no edits, no deletions, no moving a transaction between accounts. It goes by the date on the record, not the day you type it. That December receipt in March? Blocked. One thing is still allowed: matching. Acme's payment arrives in January for December's invoice. You can match them, because matching changes no figure; it links two records already there. Reconciled and locked are different things. Reconciled means a month matches the bank. Locked means nobody can change it. You reconcile first, then lock. Lock each month as soon as it's reconciled, and the timeline shows at a glance which months are final and which still need work. Need to correct something inside the lock? Unlock the month, fix it, lock again. But ask first: the figures may already be reported, and the log records every unlock. In Fiskl, the lock lives in two places that stay in step: a date in Accounting Settings, and a lock above each month on the Reconciliation timeline. Finish a month's reconciliation, select its open lock, and Fiskl confirms, naming any account not yet reconciled, before it locks through that month. Unlock from a month, and only that month and later reopen; the months before stay locked. And Fi can review a period before you lock it: uncategorised lines, duplicates, future-dated entries, unmatched transfers, so the lock closes on clean figures. You lock each month after you reconcile it, and you don't reopen a month without asking. If you work with an accountant, they'll tell you when the year is final, lock it, and reopen it only for the adjustments they make at year end. Either of you can see which months are locked, which are reconciled but open, and which still need work. Reconcile, then lock. A lock is one date; nothing behind it changes except by matching, and reopening it is a decision, not a slip. In the next video, we reach the end of the year itself and ask: what does my accountant actually need from me, and what do they do with it?
Reconcile, then lock. A lock is one date; nothing behind it changes except by matching, and reopening it is a decision, not a slip.
Episode 7.6
Year end and tax · 2:56
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Last time we locked the year. Now the January question: what does my accountant actually need from me, and what do they do with it? Year end used to mean a box of receipts and a month of questions. Keep the routine, and it means almost nothing: the books are already done. What they need from you is a short list. Every month reconciled. Every bill for the year in, paid or not. The receipts behind anything big, like the computers. The loan statement. And a word on money you put in or took out, so it isn't mistaken for income or cost. Most of that is already in Fiskl, because you did it when it happened. The list is a check, not a project. Then it's their turn, and their first step is a report you've never needed: the trial balance. Every account with its balance on one side or the other: cash, customers, equipment and costs on the left; the loan, the bills, what you put in and your sales on the right. The two sides must add to the same number: 119,500 and 119,500. If they don't, something was entered once instead of twice, and that's found first. Next, the adjustments: the few entries that only make sense once the year is whole. Depreciation is the one you've seen: 2,000 of the computers, this year's share. Others you might see: a cost that belongs to next year, moved; work done but not yet invoiced, counted. Small, and all of them in the log. From the adjusted books come the year-end accounts, the formal version of the three reports, and the tax return, on the basis the tax office requires. Then they lock the year, and January starts on clean figures. In Fiskl, the trial balance is a report like the others: as at a date, on either basis, and every line opens to its transactions. The Sales Tax report does the tax side: collected on sales, reclaimable on purchases, and the difference to pay, per tax number and period. And Fi can draft the year-end accounts, statements and narrative, in the format your country requires, for your accountant to review. Atlas tells your accountant the year end is coming, so it's on their list before it's on yours. You keep the routine all year and tick the short list in January. If you work with an accountant, they check the trial balance, adjust, prepare the accounts and the tax return, and lock the year. Either of you can open the accounts the moment they're done, because they came from the same books. A short list for you, a short sequence for them: check the balance, adjust, prepare, file, lock. The books you keep are the books they use. In the next video, we start planning ahead with the question behind every price: how much do I have to sell just to cover my costs?
A short list for you, a short sequence for them: check the balance, adjust, prepare, file, lock. The books you keep are the books they use.
8. Planning ahead​
Episode 8.1
Break-even and margins · 3:02
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Module seven left the books with your accountant. Now we look forward, with the question behind every price: how much do I have to sell just to cover my costs? Most owners answer with a feeling. The profit and loss answers with a number, two steps away. Step one: split your costs into the ones that come with each sale, and the ones that come every month whether you sell or not. The second kind is your fixed costs: 47,560 a year, about 3,960 a month, before you've sold a thing. Step two: of every hundred you sell, how much is left after the first kind? That's your gross margin, from module six: about 68. So every hundred you sell pays 68 towards the fixed costs. Divide the fixed costs by that, and you have it: about 69,600 a year. Sell 69,600 and you've paid for everything and made nothing. Accountants call it break-even. Below it you lose; above it, 68 of every extra hundred is profit. The studio sold 98,000: 28,400 above break-even, about 29 percent of sales that could vanish before the year became a loss. That gap is the number to watch when you plan. Three things move it. Raise your prices by five percent on the same work, and 4,900 goes straight to profit, because the contractors cost the same. Cut the cost of delivering each job, and the margin rises, so break-even moves left and every sale pays more towards the rent. Add a fixed cost, and break-even moves right. A second assistant at 1,000 a month is 12,000 a year; break-even climbs to 87,100 and the gap shrinks to 10,900. Not wrong, but now you know what it costs: most of your cushion. That's the conversation to have before the hire. In Fiskl, the profit and loss gives both inputs: gross profit over revenue for the margin, operating expenses plus the interest for the fixed costs. The Dashboard's ratios keep the margin in front of you, and Compare Periods shows whether it's moving. And Fi runs the scenario for you: ask what happens if you hire at a thousand a month, and it works the answer through on your live figures. You know your break-even, and you check the gap before any decision that changes a fixed cost or a price. If you work with an accountant, they'll tell you which costs are really fixed, where your margin should sit for your trade, and what a safe gap looks like. Either of you can read the two inputs off the same report, any month. Fixed costs divided by your margin is the sales you need to cover everything. Above it is profit; the gap is your room to be wrong. In the next video, the last of the basics, we put it all into your first thirty days with Fiskl: what to set up, what to do each week, and what to leave to Fi and your accountant.
Fixed costs divided by your margin is the sales you need to cover everything. Above it is profit; the gap is your room to be wrong.
Episode 8.2
Your first 30 days · 2:52
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Forty videos of ideas is a lot. This one turns them into four weeks of doing, from an empty account to your first monthly routine. Week one is set-up, and the order matters, because each step makes the next one easier. Start with the company itself: the name, the year end, the base currency, and the accounting method, which is only the default view your reports open with. Then the taxes you charge and reclaim: the rate and your tax number, so every invoice and bill carries the right tax from the first day. Then connect the bank. From now on every line arrives on its own, and the folders it needs are created for you. Look over the chart of accounts, the cabinet from module two. The drawers are there already; you add a folder only when your business needs one. And invite your accountant from External Access, so they're in the same books from the start. Week two is money in: your first invoice, sent from Fiskl with payment terms and online payment on, so paying you is one click. When it's paid, the payment lands from the bank feed or the card provider and the invoice marks itself paid. You match it to the bank line. Week three is money out: photograph the receipts, let AI Expenses read them, and give the regular bills a rule so they file themselves. Categorise what the bank brought in, cost of sales first, and set the tax rate on each. By the end of the week, every line has a folder. Week four is the first routine. Reconcile the month. Chase the oldest invoice. Read the three reports. Ask what surprised you. Then ask Fi to review the month, and lock it. Thirty days in, you have a reconciled, locked month, and the next one takes an hour. From here the ideas carry the weight: a sale counts when you earn it, every cost has a folder, matched isn't reconciled, and only profit moves what's yours. In Fiskl, the Dashboard is where the thirty days show: cash, profit, overdue invoices, each bank feed, and the five numbers. Fi is the shortcut when you're stuck: ask how to record something, why a figure moved, or what happens if a client pays late. And the help site has the how-to for every screen we only drew. You do the four weeks once, then the routine every month. If you work with an accountant, they see you from day one in Atlas, nudge you when a feed goes quiet, and take the year end when it comes. Either of you can open the same books, any day, and see where the month stands. Set up, money in, money out, the routine: thirty days from an empty account to books you can run the business on. That's the basics. In the next video, we start the advanced part of the series with a question that's new to accounting: what does AI actually change?
Set up, money in, money out, the routine: thirty days from an empty account to books you can run the business on. That's the basics.
9. Fiskl with AI (advanced)​
Episode 9.1
What AI changes in accounting · 2:58
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The basics are done. This last part asks a question accounting hasn't faced before: what does AI actually change, and what doesn't? Start with what doesn't change. A sale still counts when you earn it. Every transaction still has two sides. The balance sheet still balances. What changes is the work between those rules and your books: the reading, the typing, the matching, the checking. You saw it read receipts: the amount, the date, the tax, the likely folder, from a photo. You saw it file bank lines: your rules first, then its own judgement when it was sure, with a confidence figure when it wasn't. You saw it match: a payment to its invoice, a bank line to its bill, and the pairs it only suggests, left grey until you agree. And you saw it check: duplicates, a typing slip, a line with no category, a month that doesn't reconcile, before you lock it. Reading, filing, matching, checking: hours of typing and comparing, gone. The first change is fewer errors, because less is typed. The second is speed. Why did profit drop, what if a client pays late: once a wait for a reply, now a sentence to Fi and an answer in seconds. The third is reach. Fi reads the whole ledger for patterns no one has time to find: cash that doesn't follow profit, a cost that spiked, a receivable long overdue. And what doesn't change, again: the judgement. Fi flags; you and your accountant decide. A flag is evidence, not a verdict. Because AI can post an entry when you ask, two things matter more. Every change it makes is in the audit log with its name on it. And your data stays yours. Fi runs on private models, isolated from public training, and reads your books only when you ask something that needs them. In Fiskl, the AI you talk to is Fi, in the panel on the right of every screen, and it knows what's on the screen in front of you. The AI you don't talk to is already in the bank feed, AI Expenses and reconciliation, doing the four kinds of work as the lines arrive. And if you'd rather talk to an AI you already use, you can connect it to your books, with the same permissions you'd give a person. That's the last video. You ask Fi before you ask anyone, you read its flags, and you decide. If you work with an accountant, AI gives them the same flags from Atlas before they open your books, so their time goes on judgement. Either of you can ask the same question of the same books and get the same answer. AI reads, files, matches and checks, and answers in seconds across the whole ledger. The rules, and the judgement about a flag, stay with people. In the next video, the smallest AI feature with the biggest effect on a conversation with your accountant: a note that travels with a transaction.
AI reads, files, matches and checks, and answers in seconds across the whole ledger. The rules, and the judgement about a flag, stay with people.
Episode 9.3
Ask Fi to analyse your business and reports · 2:22
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Last time, AI read, filed, matched and checked. This time, one button: ask Fi to look at what's on the screen and tell you what it sees. Every screen in Fiskl is built from your books. The dashboard is this period against the last; a report is one period, line by line. So when you ask Fi to analyse the screen, it starts from exactly what you're looking at, and works out what moved, and why. Take the dashboard. Sitting on this year to date, every widget already holds this year against last: cash, profit, the ratios, who owes you. Press Analyse, and Fi reads all of it at once and gives you the picture: profit up, margin down a little, one client slow, cash healthy. It needs enough to read. Hide too many widgets and the button goes, because the picture would be a guess. A report is the same idea, narrower. On the profit and loss or the balance sheet, Analyse my report asks: what moved on this page, and what looks unusual? Fi answers line by line: the lines that drove the change, the one that looks out of pattern, and what to open next. Or skip the screen and ask: fetch my profit and loss for the last quarter and tell me what changed. Fi runs the report itself and then reads it. Either way, the answer is a reading, not a ruling. Open the lines it names, as you did in module six, and decide. In Fiskl, the button sits on the home dashboard and at the top of the profit and loss and the balance sheet, and the same question works in the Fi panel on any screen. How Fi gets the figures will change under the hood. What you do won't: press the button, or ask. You run the analysis before your monthly review, so you read the reports already knowing where to look. If you work with an accountant, they can ask Fi the same questions of your books, and you'll both be reading from the same answer. Either of you can press it, any day, on any screen that's built from the books. One button, two places: analyse the business from the dashboard, or a report from its page. Fi tells you what moved and what looks unusual, and you decide what it means. In the next video, the last in the series: connecting an AI you already use to your books, and what it can and can't see.
One button, two places: analyse the business from the dashboard, or a report from its page. Fi tells you what moved and what looks unusual, and you decide what it means.
Episode 9.5
Connect an outside AI · 2:46
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Last time, Fi read your screens for you. This last video asks a newer question: can the AI you already use, outside Fiskl, read your books too, and what can it see? Think of it as giving a new person access. You wouldn't hand over the keys to everything. You'd decide what they can see, what they can change, and what stays yours. An outside assistant works the same way. You connect it once, and on the way in Fiskl asks: what may it do? You tick the boxes. Two rules sit over every box. First, it can never do more than you can. Your own permissions are the ceiling, checked on every request. Second, it can only do what you ticked. Reading without changing is a choice you make, scope by scope: contacts, invoices, payments, products. Some things are read-only for any assistant: the reports, the tax rates, and the change history. It can read them; it can never alter them. And some things are never on the list, whatever you tick: your team, your subscription, your bank connections, payment instructions, manual journals. And nothing it does can delete a record. Once it's in, you ask it the way you'd ask Fi: who owes me money, what did I spend on travel, draft an invoice for Acme for ten hours. With write access, it can create that invoice. So three habits: ask for a preview before it saves, confirm before it sends, and check the work after. Because sending emails your client at once, and can't be recalled. And everything it does is in the audit log, with your name, the assistant it came through, and the time. In Fiskl, this is a connection: your assistant's settings, add Fiskl's address, sign in to Fiskl, tick the boxes, Allow. Start read-only. Try a few questions. Reconnect with write access when you're sure. If it says it can't see something, the cause is almost always a box you didn't tick, or a permission you don't hold yourself. Reconnect and check. You connect it, you keep it read-only until it has earned more, and you confirm every send. If you work with an accountant, they can use an assistant too, with their own permissions as the ceiling, and every change they make through it has their name on it. Either of you can see, in the log, what any assistant did. An outside assistant is a new person with your permissions as the ceiling: it sees what you tick, changes only what you allow, never touches the list that's always off, and leaves its name in the log. That's the series. Forty videos, one set of books. The books you keep are the books everyone works from: you, your accountant, Fi, and now the AI you choose.
An outside assistant is a new person with your permissions as the ceiling: it sees what you tick, changes only what you allow, never touches the list that's always off, and leaves its name in the log.
X. Example transactions​
Episode X.1
Recording your rent · 2:00
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This is a worked example, the first of four. One transaction, start to finish: paying the rent. Rent is the simplest cost there is: money leaves the bank, and the business has used something up. Two effects, from one event. On the left, the Rent account goes up by 1,500: that's the cost. Accountants call the left side the debit. On the right, the Bank goes down by 1,500. The right side is the credit. Same number both sides. That's the whole entry, and it's why the books still balance afterwards. Now the same rent, paid a different way. The landlord sends the bill on the 1st and you pay on the 8th. That's two events, so two entries. Entry one, when the bill arrives: Rent goes up, debit, as before. But the bank hasn't moved yet. What goes up is what you owe: Accounts Payable, credit. Entry two, when you pay: Accounts Payable goes down, debit, and the Bank goes down, credit. The cost was already counted; this entry only settles it. Either way, Rent is up 1,500 once and the Bank is down 1,500 once. The bill route just keeps a record of owing it in between. In Fiskl, you never write the entry. Categorise the bank line as Rent, and both sides are posted. Or record the bill in AI Expenses first, and Fiskl writes the Accounts Payable entry; match the payment later, and it writes the second. Open the transaction and you can see the two accounts it touched, debit and credit, which is all an accountant means by the posting. You record the rent once, by whichever route fits; your accountant reads the entry and the ledger it landed in. Rent up, bank down, same amount: one event, two sides. Next, the everyday costs, where the only thing that changes is which expense account goes up.
You record the rent once, by whichever route fits; your accountant reads the entry and the ledger it landed in.
Episode X.2
Recording day-to-day expenses · 2:25
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Second worked example: the everyday costs. A coffee with a client, the software subscription, the print run. Same shape as the rent, with one thing to decide. Every one of them is the bank going down, credit, and an expense account going up, debit. The only question is which expense account. The coffee is Entertainment and Meals, Business. The subscription is Software. The print run is Marketing. That choice is categorising, and it's the whole of the work. Now the receipt. It's in your hand before the bank has seen the payment, and there are three ways to get it into the books. All three end in the same place. Route one: send the receipt to AI Expenses. It reads the vendor, date, amount and tax, and suggests the category. Saved, it's an unpaid line in Accounts Payable, because the bank hasn't moved yet. When the bank line arrives, Fiskl matches it to that entry, often on its own. The cost was already counted; the match marks it paid. Route two: keep the receipt until the bank line arrives, then categorise the line as Entertainment and Meals, Business and attach the receipt. No Accounts Payable step at all. Route three: skip AI Expenses and create the Accounts Payable entry yourself, receipt attached. Then match the bank line when it comes. Three routes, one entry: Entertainment and Meals, Business up twelve, Bank down twelve. Route two is the fewest clicks; one and three keep a record of the unpaid cost in between. One rule: pick one route per receipt. Send it to AI Expenses and then also categorise the bank line as an expense, and the coffee is counted twice. In Fiskl, route one is Purchasing, AI Expenses, Upload. Route two is Banking, the transaction, a category and an attachment. Route three is the Accounts Payable account and plus Credit. Whichever you choose, the Expenses report shows the coffee under its category, Paid or Unpaid, and the two sides are there in the transaction. You pick a route and stick to it for each receipt; your accountant sees the same entry whichever you chose. An expense account up, the bank down, a receipt attached by one of three routes. Next: paying yourself a dividend, where the account that goes up isn't an expense at all.
You pick a route and stick to it for each receipt; your accountant sees the same entry whichever you chose.
Episode X.3
Paying a dividend · 2:06
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Third worked example: paying yourself a dividend. The bank goes down as before. What goes up is not an expense, and that changes which report it lands on. A dividend is profit the company hands to its owner. The company earned 19,440 this year; it pays 5,000 of it out. That's money leaving the business, but no customer, no supplier, nothing used up. It's a slice of what's yours, taken. So the entry: Bank down 5,000, credit. And on the debit side, Dividends: an equity account, not an expense account. Equity is what the company owes its owner. A dividend reduces it: the owner has been paid part of what they were owed. That's why it never touches the profit and loss. Profit is what the business made; the dividend is what you then did with it. Two rules sit over it in most places, and your accountant owns both. A dividend can only be paid out of profit the company has made, and it's declared before it's paid. Compare it with a salary, which is a cost: Salaries up, debit, Bank down, credit, and it does reduce profit. Which of the two you use is a tax question for the accountant, not a bookkeeping one. In Fiskl, the bank line arrives like any other. You categorise it to your Dividends account under Equity, and the debit and credit are posted for you. Fiskl's chart has no Dividends account under Equity to start with, so add one there, once. Not the Dividends Paid line in the expenses list: that would put it on the profit and loss. The balance sheet shows it in the equity section; the cash flow report shows it under financing; the profit and loss doesn't show it at all. You categorise the payment to Dividends; your accountant decides when a dividend is allowed, how much, and the paperwork that declares it. Dividends up, bank down: an equity entry, not a cost, so profit is untouched. Last example next: money an owner puts in, and why a loan is different.
You categorise the payment to Dividends; your accountant decides when a dividend is allowed, how much, and the paperwork that declares it.