Bench Ledger Glossary
Business Meals Expense: This ledger is used for any meal purchases made by the business. This can be either ad-hoc meals for employees or formalized dinners with potential customers.
Charitable Contributions: This ledger only contains transactions that are donations from the business to a registered 501c3 charity.
Company Events Expense: This ledger is used when the business holds an event for all of their employees. Christmas parties, summer bbq’s, etc. This ledger will hold all business transactions related to the event.
Cost of Goods Sold: Abbreviated as COGS, this ledger contains all transactions related to creating a physical good to sell to customers. There are three parts: the purchase of goods for direct resale, the purchase of materials which are changed into goods for resale, and the costs associated with other non-incidental products such as packaging around the goods or freight costs to ship the goods to the business prior to resale.
Cost of Service: Abbreviated as COS, this ledger contains all transactions related to directly providing a service to a customer.
Owner Draws & Contributions (Shareholder Distribution/Additional Paid in Capital): These ledgers contain the personal portion of any transaction related to business activity. Removing cash from your business account to send to your personal account is an example. So would using a personal account to purchase a business expense.
Gifts Expense: This ledger contains any gifts your business made to its clients or customers.
Independent Contractor Expense: This ledger contains payments for any non-specialized contract labor. This does not include payments to employees or payments to the owners of a business.
Investments: This ledger has the long term purchases of physical or intangible investment assets that the business made.
Money in transit: Bench uses this ledger to show money moving between two bank accounts or between a bank account and a credit card.
Money in transit (outstanding): This ledger has the same functionality as “Money in transit”, but contains transactions that haven’t matched to a second account yet. The most likely reason there are transactions in this ledger is because we haven’t received transactions from one or more bank accounts or credit cards.
Office Kitchen Expense: This ledger records the expenses the business incurred when stocking the office kitchen with supplies available to all employees of the business. Coffee, tea, sugars, etc.
Professional Service Expense: Bench uses this ledger solely for legal or accounting costs incurred by the business.
Property Plant & Equipment: This ledger represents the total price of all physical assets purchased by the business. Bench uses the IRS’s $2,500 safe harbor rule to determine if a purchase was an asset. Assets are depreciated at year-end by an accountant.
Retained Earnings: This ledgers show the accumulated net profit/loss of the business for all time. A variant is used for Partnerships called “Current Year Earnings” which shows the accumulated net profit of the business for the current year. No transactions are categorized to this ledger, but adjustments to this ledger are made annually to reflect the profit the business has not yet distributed to the owners.
Taxes Paid: This ledger contains all taxes paid by the business with the exception of sales tax and payroll tax which have their own ledgers. The taxes in this ledger do not include taxes paid by the business owner, such as income tax.
Uniform Expense: This ledger is used when the business purchases uniforms for the employees. Uniforms are clothes that are not worn outside of the workplace, such as personal protective equipment or fast food clothing uniforms.