Lesson 1 · 5 minutes
Accounting Basics for Business Owners
No jargon. No prior knowledge needed. Just the stuff you actually need to know to run your business with confidence.
No jargon. No prior knowledge needed. Just the stuff you actually need to know to run your business with confidence.
Lesson overview
The basics
At its core, accounting is about recording every time money moves — into your business or out of it. That's it. The goal is to answer one question: is your business making or losing money?
Money in − Money out = Profit (or Loss)
Quiz
A client pays you Rp 5,000,000 for laundry services. What do you call this?
Answer: Revenue
Revenue is the total money coming in from your business activities — before any expenses. Profit is what's left after you subtract costs.
Revenue vs Profit
Revenue is your total sales. Profit is what's left after you pay for everything — staff, rent, supplies, and all other costs.
Profit = Revenue − Expenses
Quiz
Your business earned Rp 50M in sales this month. You spent Rp 35M on staff, supplies, and rent. What's your profit?
Answer: Rp 15,000,000
Rp 50M − Rp 35M = Rp 15M profit. This is exactly what your Profit & Loss report shows at the end of each month.
Accounts Receivable
When you send a client an invoice, they owe you money — but until they actually pay, that money sits in Accounts Receivable (AR). It's money owed to you.
AR = invoices sent, payment not yet received
Quiz
You send Pura Homes an invoice for Rp 8M. They say they'll pay next week. Where does this money sit right now?
Answer: Accounts Receivable
Until the payment hits your bank account, it lives in Accounts Receivable. Once they pay, it moves from AR into Cash.
Accounts Payable
The opposite of AR. When a supplier sends you a bill and you haven't paid yet, that debt sits in Accounts Payable (AP). It's money you owe.
AP = bills received, payment not yet made
The 3 key reports
Every business runs on three financial statements: 1. Profit & Loss (P&L) — did you make money this period? 2. Balance Sheet — what do you own and what do you owe? 3. Cash Flow — where is your actual cash going?
Most small business owners only need to check their P&L monthly.
Quiz
You want to know if your business was profitable in June. Which report do you look at?
Answer: Profit & Loss (P&L)
The P&L (also called an Income Statement) shows all your revenue minus all your expenses for a specific period — giving you your net profit or loss.
Continue learning
Try it yourself
Ready to track your numbers?
lemondrop handles invoices, expenses, and reports — in IDR.