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Depreciation lets you spread the cost of assets out over the time they’re being used, and affects both your business’s financial health and tax reporting. In this comprehensive guide, we’ll get into different depreciation methods, providing step-by-step examples to help you understand and implement each one effectively. This guide is also related to our articles
Read moreThis article will explain what contra revenue is, how to record it accurately, and some effective management strategies. We’ll also touch on related topics like gross vs. net profit, prepaid expenses, and unearned revenue. This guide is also related to our articles on understanding gross vs. net profit, understanding prepaid expenses, and understanding unearned revenue.
Read moreThe Profit and Loss (P&L) is one of the most well-known and important financial statements. It details your revenues, costs, and expenses during a specific period, showing your net profit or loss. The article will explain how to interpret various sections of a P&L statement and what these figures mean for your business. This guide
Read moreIntroduction Cash flow and revenue can appear similar, but they’re quite different. Revenue represents the total income earned, cash flow measures the net amount of cash being transferred in and out of a business. This guide should help you understand the differences. It’s also related to our articles on understanding gross vs. net profit, operating
Read moreIntroduction A price increase letter is a note a business sends to its customers to tell them the prices of products or services are going up. It explains why the business needs to charge more because of changes inside the company or in the wider market. This guide explains why you should review prices regularly,
Read moreWhile both accountants and CPAs (Certified Public Accountants) work with financial statements, the distinction lies in a CPA’s licensure, which grants higher responsibilities. This distinction not only affects the scope of work they can perform but also impacts their authority and the trust placed in their financial assessments. This guide will walk you through the
Read moreYear-end closing is the process of updating your accounts to accurately reflect your business’s activities before you finalize your financial statements. This includes making adjustments for things like expenses that have been incurred but not paid (like bills) and revenues for services you’ve provided but haven’t yet billed. In this article, we’ll walk you through
Read moreUnearned revenue represents payments received for services not yet performed or goods not yet delivered. It’s crucial for small business owners because it affects both your cash flow and how you report income. This article will cover how to recognize, manage, and report unearned revenue, ensuring you’re accurately reflecting your business’s financial health. This guide
Read moreKnow your business’s financial health by understanding two key figures: operating income and net income. Use them to tweak your strategy, check how you’re doing, or show off your financial health to investors and lenders. Here’s a straightforward guide to help you, the small business owner, get the hang of operating and net income. This
Read moreAccrued expenses are money that your business owes but hasn’t paid yet. These could be bills or wages that you need to pay in the future. They are important for understanding your business’s real financial situation, even if the cash hasn’t moved yet. This guide helps you recognize and manage these expenses simply and clearly
Read moreNet 30 payment terms offer a flexible yet structured way to manage payments and receivables. When you issue Net 30 terms to customers, it means they have 30 days to pay you. Vice-versa with vendors, if your payment terms are net 30, you have 30 days to pay your bill. This article will show you
Read moreThis guide talks about a less known but handy way to do your accounting: the modified cash basis. It doesn’t matter if you’re well into your business journey or just starting; knowing your options for keeping track of your finances is crucial. This guide is also related to our articles on cash vs. accrual accounting,
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