What are the options to pay yourself as a business owner? Making money and earning a living from your business is great. After all, that’s probably one of the main reasons for setting it up in the first place. But as a small business owner, how do you go about actually paying yourself? And what […]
Before you can set a price for any item you manufacture, you must calculate the per-unit manufacturing cost. This product cost calculation includes elements such as the cost of raw materials, direct labor, and overhead costs. The price you set determines your profit margin. Define Total Manufacturing Cost The accounting and business term, total manufacturing cost, also called cost
When a small business extends credit to customers, inevitability some portion of those transactions will turn into bad debt since the recovery of bad debts in most cases is unlikely, even when threatening to report to a collection agency. As a result, a bookkeeping entry must be prepared to adjust the balance sheet and income statement. Preparing and
When preparing financial statements, a trial balance is used as part of the closing process to develop the balance sheet, income statement and statement of cash flows. After an adjusted trial balance is prepared, a post closing trial balance is used to verify the accuracy of the closing process. This type of trial balance is helpful when ensuring the completeness of financial
When recording journal entries for the cost of goods sold, accountants work in tandem with manufacturing or operations to ensure they’re booking the correct costs. Support from production personnel is essential to back-up journal entries and remain compliant with U.S. GAAP. These points and those below are part of the inventory cost recordation process. What is Cost of
Depreciation accounting can seem a bit overwhelming, but once you learn a little bit about why depreciation is necessary and how depreciation formulas work, you’ll see it’s fairly straightforward and easy to understand. Of course, there are some intricacies, and it can be a bit more complex depending on the type of business you are
The Heart of Every Small Business Doing a cash flow analysis for a small business can make a huge difference when it comes to determining whether or not your business is on the right track. The objective in any business is to make a profit but you can’t really be sure you’re actually doing that
The decision to capitalize assets or record a purchase as an expense is an area of accounting that confuses many bookkeepers and small business owners. For accounting purposes, always consult the guidelines and accounting principles found in the GAAP when in doubt. The process of writing off an asset can be done in several ways
Your accounting work involves a lot of repetition. You send invoices. Pay bills. Create purchase orders. Generate payroll checks and submit payroll taxes. Some of the time, you only fill out those transaction forms once. You might be doing a one-time purchase, like paying for some new office furniture. Other times, though, you’re paying or
Setting up your accounting financial software can be a daunting task. It is not something you can just “wing it” especially if you have “accounting history”. If you will take the extra time to set it up properly, you will get more accurate reports and be more likely to continue using the accounting software efficiently.