Contra Expense Account

This make what is contra expense sense because Home Depot wouldn’t be carrying accounts receivable with long payment terms. Most accounts receivable would just be the time between purchase and credit card settlement. All in all, contra accounts are an important tool for businesses to use to understand their financial standing better. However, they can… Continue reading Contra Expense Account

Accounting Records: Definition, What They Include, and Types

Self-invoicing is the process where the recipient of goods or services, rather than the supplier, generates the invoice. This occurs when dealing with unregistered suppliers who cannot issue a GST-compliant invoice. Self-invoicing allows the recipient to account for the transaction and pay the applicable GST. RCM compliance is mandatory even for unregistered recipients who engage… Continue reading Accounting Records: Definition, What They Include, and Types

How to do bookkeeping for small businesses: A step-by-step guide

Here are some of the most frequently asked questions on bookkeeping for small businesses. When doing the bookkeeping, you’ll generally follow the following four steps to make sure that the books are up to date and accurate. Remember that each transaction is assigned to a specific account that is later posted to the general ledger.… Continue reading How to do bookkeeping for small businesses: A step-by-step guide

Direct Costs and Indirect Costs

For example, customer acquisition costs, which refer to acquiring new customers, can be useful for businesses looking to expand their customer base. Similarly, employee-related costs, such as salaries, benefits, and training expenses, can be tracked as a cost object to help businesses understand the true cost of their workforce. Businesses must clearly understand their costs… Continue reading Direct Costs and Indirect Costs

12 steps for bookkeeping clean up + free checklist

Double-check your chart of accounts to ensure statement of cash flows items like credit card payments are classified correctly. A credit card payment itself isn’t an expense; it reflects settling a previous expense you categorized earlier. Finally, provide clear descriptions for fixed assets beyond simply listing them in the fixed asset accounts. Your tax preparer… Continue reading 12 steps for bookkeeping clean up + free checklist

Variable Costs Examples, Formula, Guide to Analyzing Costs

If Amy were to continue operating despite losing money, she would only lose $1,000 per month ($3,000 in revenue – $4,000 in total costs). Therefore, Amy would actually lose more money https://www.bookstime.com/ ($1,700 per month) if she were to discontinue the business altogether. Variable costs are expenses that vary in proportion to the volume of… Continue reading Variable Costs Examples, Formula, Guide to Analyzing Costs

Cost of Quality: Classification and Examples

Thorough analysis provides insights into the largest contributors to quality costs and helps determine the most impactful areas to focus process improvement efforts. Tracking quality costs over time provides an ongoing benchmark to measure performance improvements. These costs drain profits and can account for a surprising percentage of operating expenses. The cost that’s like no… Continue reading Cost of Quality: Classification and Examples

Financial Projections Template

Before generating revenue, or generating enough to just break even, startup companies will incur losses. Understanding the pace at which the expenses exceed revenue helps business owners plan accordingly. The location’s rent must be paid, even if the pizzeria isn’t yet open for business. They might sound daunting, particularly if you’ve never prepped a balance… Continue reading Financial Projections Template