Basic Accounting

Ratio Analysis is the basic tool of financial analysis and Financial analysis itself is an important part of any business planning process as SWOT (Strengths, Weaknesses, Opportunities and Threats), being the basic tool of the strategic analysis plays a vital role in a business planning process and no SWOT analysis would be complete without an analysis of companies financial position. In this way Ratio Analysis is very important part of whole business strategic planning. There Read more

Give your cash flow a helping hand with Invoice Discounting or Factoring!

For most business managing the cash flow is a full time job. Invoicing customers and clients is usually very time consuming and chasing payment can be very hard work.

When working on a separate set of payment terms to those of your customers, your services may not be paid for as long as up to 90 days. These terms don’t necessarily complement the way you are trying to run your business. You may Read more

Are you planning to start your real estate business? Well, if that is so, then you need to take into consideration one vital aspect of any business and that is accounting. In addition, in the case of real estate, accounting plays a much important role. As real estate business is all about financial transactions made by numerous people, the accounting department needs to be extra alert. This department follows certain principles as well as strategies to maintain a proper setup f Read more

Every business has several stakeholders. All stakeholders depend on the financial statements to provide them appropriate information for their needs. They will assume in most cases, that the financial statements are prepared in accordance with generally accepted accounting principles and that the same have been followed consistently from year to year. The Financial statements should address the information requirements of the user. Financial statement users are generally intere Read more

Impact of choosing alternative accounting methods: Although GAAP is generally accepted accounting principles that have been codified over a period of time; there are some alternative choices for accounting treatment of different items. The largest cost in any enterprise is the cost of goods sold usually accounting for about 70% of the sales revenue, although the exact number may vary from industry to industry. Some methods of valuation of inventory will have a direct impact on Read more

One of the fundamental accounting principles is matching revenue with cost in any period. This is relatively simpler while dealing with items in cost of goods sold, such as purchase of raw materials, supplies, and cost incurred in conversion to finished goods for sale etc. But this becomes more complex while dealing with assets that have longer lives. There are two different types of fixed assets that a company invests in, tangibles and intangibles. Tangible fixed assets are as Read more

Cash flow statements alone do not tell you the whole story. Just knowing that cash has increased or decreased by X dollars does not tell us the whole story. Inflows and outflows are the results of various changes in the business, inflows from sales, capital invested, borrowings etc. Cash outflows result from payments being made for purchase of raw materials for manufacture, payroll and other expenses, interest on loan payments, investment in machinery, repayment of loans, payme Read more

An integrated understanding all of all the three components of a financial statement - Income statement, Balance sheet and a Cash flow statement is required to understand the operations of any business. The income statement reports the Profit or Loss for a period. The balance Sheet reports on the financial position of the business at any time; what the business owns and what it owes. The cash flow statement on the other hand tracks the movement of cash in the business, answerin Read more

It seems to often be the case that as your manufacturing operation grows, the measurement of the efficiency of your performance becomes ever harder. When sales orders go up work in progress (WIP) increases, when inventory builds turnaround diminishes-all to the detriment of grasping how efficient or profitable each process is. To a certain degree, enterprise resource planning software (ERP) has helped in providing a continuous status assessment via the input of real time data Read more

Accounting is considered the necessary evil for most business owners. Understanding small business finance is a must for any entrepreneur especially one at the helm of a enterprise running full steam ahead.

More importantly, if you expect to get top dollar for your business when it’s time to sell, you need to stay on top of your accounting.

Any business broker can tell you that probably one of the biggest reasons a business will not sell is because their accounting Read more