These are:

• A balance sheet is a report of the assets of a company. The liabilities are part of the overhead. A liability is similar to a bill to pay out, salaries and wages to pay, cost of the building or plant of store, etc.


• Income statement is a profit and loss statement. This report shows how much money was earned and shows if this is applied to bills or is a profit.


• A cash flow statement shows where the money is going to it shows costs to operate.


• And a statement of retained earnings is like the principle the owner has earned and gets to keep.

All but the last item in this set of accounting journals and reports has to do with overhead.

Another item in the overhead determinations is a break-even point. Overhead is crucial in this point. It is the total amount of money an owner will spend making 1 product. Then it is computing how many products must be made and sold to break even. Profit is not included in this computation. So if overhead is $20,000 and the products sell for $2.00 each, then 10,000 must be sold to break even. There are formulas and virtual web sites where a businessperson can determine this number.

Without keeping a record of the overhead, no break-even point can be reached.

In order to get credit or a business loan, the owner must know what they have to spend to operate their business and how much money or cash flow is needed to keep going month after month. Overhead must be known for all these planning and operations steps.

A couple Microsoft operating systems include software to help determine these figures. Microsoft Money has features to help. Also the Office 2003 and 2007 have features built in which will help. Excel is another utility that will perform math like adding columns, subtracting, etc. There is need of a little knowledge in making up these formulas. Then reports can be prepared with the figures.

There are hundreds of other pieces of software. Quicken Books is one. The old Dbase program did a good job. It is impossible to list them and a good Google search, a Yahoo search, about any search engine will bring up software for accounting and bookkeeping. It is easier to stay with 1 set of utilities, to produce the reports needed. Some software will not import and export figures into other software packages.

There are over 300 types of grants and loans available to new or existing small businesses through the federal government and non-profit organizations. The grants can go as high as $800,000 for certain kinds or businesses or for certain expenses.

These stakes are so high, and a small business or home business will need cash flow help at some point. When you weigh the price of some good book keeping software against the demand for annual reports by governing agencies, the software is not expensive.

When the need for new equipment, or premiums for workman's compensation, unemployment insurance, health and accident insurance, life insurance etc. The price of some good software is almost nil.

Also, there is a fed. Agency everyone calls the IRS, and their major records to be kept in order to file those IRS reports for taxes etc. All these demands on the home business owner, tells a wise and prudent business owner to buy some good gook keeping and accounting software.