In this guide, we’ll cover what prepaid expenses are, how to manage them, and why they should be a part of your budgeting and accounting strategy. Prepaid expenses are those expenses which have been paid in advance and the related…
Accrual accounting measures a company’s performance and position by recognizing economic events regardless of when cash transactions occur, whereas cash accounting only records transactions when payment occurs. Accrual accounting presents a more accurate measure of a company’s transactions and events…
You can do this by referencing your order backlog for several future months, which are translated into cash receipts. A full-year projection is just what the name suggests—accounting for the current year. For example, if it’s currently April and…
Some common lean manufacturing practices include just-in-time (JIT) production, which involves producing goods only when they are needed, and reducing lead times between production and delivery. Additionally, businesses can implement strategies such as Kanban systems, which use visual cues to…
This is different from common stock, which has variable dividends that are declared by the board of directors and never guaranteed. In fact, many companies do not pay out dividends to common stock at all. Unlike a loan, cash generated…
Additionally, bundling can help to increase customer satisfaction by offering a more complete solution to their needs and preferences. Obsolete inventory can also result in significant storage and handling costs for businesses. As businesses accumulate excess inventory that cannot be…
Those in need of a full-service accounting solution will find a lot to appreciate at Bookkeeper.com. This online and cloud-based bookkeeping resource offers all-in-one solutions for taxes, books, and consulting, along with dedicated agents and account managers for every client.…
Reconciling bank statements with cash book balances helps you, as a business, to know the underlying causes that lead to such differences. Once the underlying cause of the difference between the cash book balance and the passbook balance is determined,…
Just as every action has an equal and opposite reaction, every credit has an equal and opposite debit. Since we credited the cash account, we must debit the expense account. If you’re totally new to double-entry accounting and you don’t…
The length of time you should keep a document depends on the action, expense, or event the document records. Generally, you must keep your records that support an item of income or deductions on a tax return until the period…
