Fixed, variable, direct, indirect: What the heck is my accountant talking about?

Your accountant isn’t speaking a secret language when they talk about fixed costs, variable costs, direct costs, and indirect costs. Here’s the secret decoder ring to know what they are talking about (and in a minute I’ll tell you why it matters to you):

Your business incurs costs. (You know that already!)

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Tags: Accountant, Doing Business, Elements, Fixed Cost, Indirect Cost, Indirect Costs, Lot, Lump Sum, Product Packaging, Profitable Business, Seasonal Business, Secret Decoder Ring, Secret Language, Single Unit, Variable Cost, Variable Costs, What The Heck

Don’t Believe the Fixed Cost Lie

Everyone loves to quote fixed costs when trying to get investors to invest or when trying to predict potential profitability. That’s because fixed costs seem nice and predictable. Since they aren’t impacted by customer fluctuations, they make for easy calculation. Unfortunately, many costs that we called “fixed” aren’t actually fixed.

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Tags: Accounting, Accuracy, Bookkeeping, Cost Of Living, Currency Fluctuation, Economic Assumptions, Fixed Cost, Fluctuations, Inflation, Investors, Mongolia, Office Space, Period Of Time, Profitability, Quote, Staff Increases, Staff Salaries, Telephones