Revenue is among the most important financial metrics on the income statement and in comparative financial statements, but it’s not always straightforward to analyze when it comes to entities such as retail business. There is a difference between these types of sales. Gross sales accounts and net sales, and their differences give entrepreneurs insight into the efficiency and effectiveness […]
Manufacturing companies have choices in the way they determine and report their profits. Some choose to utilize the absorption costing income statement, while others choose the variable costing income statement. Both income statements offer their own set of advantages and disadvantages. However, the absorption costing method conforms with the generally accepted accounting principles or GAAP, and it offers a more accurate
Besides delivering a quantifiable method for tracking performance, accounting also enables people to evaluate operations. Courtesy of a never-ending financial ratios list, professionals, can utilize various calculations from financial statements to pinpoint their company’s standing. In fact, one of the most powerful ways to utilize income statements is to conduct in-depth ratio analyses that showcase how efficiently
In almost every businesses, generating sales is arguably the most important part of operations. After all, the ultimate goal of entrepreneurship is to facilitate a constant stream of free cash flow. In order to evaluate efficiency, however, business owners must be familiar with everything from the income statement and cash flows to financial ratios like
Glancing over the financial statements of a small business, many entrepreneurs will see the names of several accounts and not understand what they are and the importance to their company. For instance, revenue, accounts receivable, interest expense, and cost of goods sold accounts are probably shown on every income statement but what do they mean and how are they used to
Keep in mind that one of the biggest deductions that you can take off your small business income is your business miles. Hopefully, you kept a good business mileage log. If not…now’s as good as any time to start one. If you don’t have room in your car for a big notebook or mileage log
Many business owners are perfectly capable of handling their own books, but doing the books may be taking time that could be better spent on other aspects of the business. Is doing your books the best use of your time? Let’s look at some thoughts about outsourcing bookkeeping for small and medium-sized businesses. Why should
There are several services or platforms that an accountant can use to help manage the financial information of a small business, especially startups with small business clients. The accurate setup of a new company is particularly essential for relying on baseline financial statements to make efficient business decisions. Some popular services provided by bookkeeping and
A T account is a way to organize and visually show double-entry accounting transactions in the general ledger account. In practice, T accounts are not typically used for day-to-day transactions as most accountants will create journal entries in their accounting software. While T accounts used more for a teaching and account visualization aid, the T account is especially useful in more
With So Many Out There, Which One Would You Choose? Choosing the right accounting program for your small business is difficult. It can be stressful and frustrating and full of wonder… will the one I choose be the right one for my business? Will it be able to grow with my business? Will it be