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The 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 moreWhat is the current ratio? It’s simply your company’s current assets divided by its current liabilities. Why does this matter, you might be wondering? Well, we are going to go into that now: why knowing your current ratio is crucial and how being knowledgeable about it can help you manage your business finances more effectively.
Read moreBuying another company can help small business owners grow quickly, reach new customers, and improve how they operate. However, it also brings challenges like financial pressure, difficulties in combining the two businesses, and differences in workplace culture. It’s important to understand how to buy a business to handle these issues well and this article can
Read moreIntroduction CFO (Chief Financial Officer) reports are in-depth reports that show a variety of trends, metrics, and ratios that forecast and explain the financial performance of a company. This guide explains some of the basic CFO reports that a small business owner would use to understand their financial performance. This guide is also related to
Read moreCash 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 income
Read moreIntroduction Amortization, in financial and accounting terms, involves spreading payments over multiple periods for loans or allocating the cost of intangible assets over their useful lives. This article will explain the basic terms and show calculations and examples of different kinds of amortization. This guide is also related to our articles on understanding journal entries
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 moreIntroduction Accounts payable is what your business owes, but hasn’t yet paid. You receive a bill from your lawyer, independent contractor, or software company – that’s accounts payable. This article will help you understand all the important basics of accounts payable. This guide is also related to our articles on understanding prepaid expenses, bank reconciliation
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 moreA virtual CFO (Chief Financial Officer) provides expert financial advice and services remotely, offering a cost-effective solution for small businesses needing strategic financial guidance without the overhead of a full-time CFO. This article will explore how a virtual CFO can transform your business’s financial health, the services they offer, and how to decide if it’s
Read moreCredit memos are documents that lower the amount a customer owes you. They can be created for many reasons, including customer overpayment, damaged goods, pricing errors, promotional discounts, early payment discounts, and service failures. Credit memos are an important factor in managing your Accounts Receivable and, more importantly, your relationships with customers. If your customer
Read moreA year-end bookkeeping checklist is a tool for small business owners to ensure their financial records are complete and accurate before the year concludes. In this article, we’re going to walk you through each step of the year-end bookkeeping process. This guide is also related to our articles on common accounting errors and how to
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