Saving Your Accountant Time, Saves You Money

This is just common sense, but something that many business owners overlook when preparing their books to send to their accountant for the preparation of year-end financial statements and tax filings. The more accurate and complete your accounting records are, the less time your accountant needs to spend on reconciling and correcting the details before beginning on the reports and taxes. The less time they spend on your books, the less it is going to cost you. Here are some tips to help make sure that your books are as easy to work with as possible. Read More »

Tags: Account Balances, Accountant, Accounting Records, Accuracy, Asset Purchases, Assets, Bank Accounts, Business Owners, Common Sense, Detailed Records, Financial Statements, Loan Accounts, Payroll Tax, Quarterly Tax Reports, Receipts, Reconciliation, Spreadsheet, Tax Filings, Tax Liabilities, Year End

Using Accounting Data to Measure Performance

Your accounting system is full of information. It has the pay rates of all your employees. It contains records of all your sales and all your costs. It has the data related to your investments back into the company when you purchase assets. It has all this data. How come it has such a hard time turning that data into information that you can really use, like measurements of your company’s performance in different areas?
Read More »

Tags: Accountant, Accounting Software, Accounting System, Accuracy, Assets, Best Direction, Budgets, Consultation, Data Collection System, Functional Reports, Garbage, Hard Time, Investments, Measurements, Measuring Stick, Measuring Tools, Performance Goals, Performance Ratios, Simple Answer, Waste Of Time

Fixed Asset Records

Your fixed asset purchases are an important part of business for a number of reasons. They are capital investments, which show how you’ve invested profits back into the company. That is part of the reason why they are listed on your balance sheet and not as an expense. The other reason is because they have an expected life of more than one year. Because they will be providing benefits to the company over a longer period of time, the expensing of their value is spread out over the useful life of the asset. We do this by recording depreciation expense for each of your assets.
Read More »

Tags: Accountant, Asset Purchases, Asset Records, Assets, Audit Purposes, Balance Sheet, Capital Investments, Dell Inspiron, Depreciation Expense, Depreciation Guidelines, Detailed Records, Important Resources, Invoices, Laptop, Period Of Time, Profits, Purchase Receipt, Section 179, Spreadsheet, Storage Trailer

My Income Statement Says I Made a Profit But My Bank Account is Empty. Where’d it go?

The answer to this will be a little bit different depending on whether your books are being kept on an accrual basis or a cash basis. For this article we will assume you are keeping your books on a cash basis.

Simply put, cash basis accounting works like this: income is recognized when the cash comes in and expenses are recorded when they are paid. So, theoretically, the final balance in your checkbook at the end of the year would be the amount of profit you made for the year. So, where did the money go if your profit is greater than your bank balance?

Read More »

Tags: Accrual Basis, Asset Purchases, Assets, Bank Balance, Books, Cash Basis Accounting, Checkbook, Company Expenses, Culprit, Doing Business, Income Statement, Little Bit, Money, Office Furniture, Personal Expenditures, Profits, Real Estate

Want to grow your business? Fire your bookkeeper

Lots of businesses have bookkeepers but if you really want to grow your business, you need to tell them to pack up their general ledgers and hit the bricks!

Okay, I might be incurring the wrath of bookkeepers everywhere, so let me explain myself before an angry mob of them come knocking on my door with torches, pitchforks, pencils, and calculators.

Bookkeepers ARE valuable to have a in a business. But the function of bookkeepers is largely administrative. They may manage your receivables and payables; they may manage your income statement and balance sheet; they may manage your payroll… and without those functions, your business would not run.

But here’s why I suggest that you fire them:  Read More »

Tags: Accountant, Angry Mob, Assets, Benchmarks, Bookkeeper, Bricks, Calculators, Digits, Fitness Trainer, General Ledgers, Income Statement And Balance Sheet, Insight, Long Haul, Measurement Devices, Payables, Payroll, Pencils, Receivables, Torches, Wrath