Accounting

Though invoices state the balance owed, more often than many realize, it’s possible to negotiate to pay less. Efficiently managing your accounts payable process means that you may be able to capture early payment discounts to help your small business save money. The terms offered by the seller usually depend on the trade custom. The 2/10 net 30 discount makes no statement on the payment of bills beyond 30 days. Vendors may or may not have a late payment penalty for such customers. It is u […]

It offers management and shareholders a better outlook on the company’s future tax obligations. Such a provision can provide useful predictive information when planning for significant corporate transactions, such as mergers, acquisitions, and sales. These are income items or expenses that are not allowed for income tax purposes but that are allowed for GAAP. Because these expenses or income items are disallowed or not recognized for income tax purposes, they are considered permanent. Exa […]

Current assets are a balance sheet item that represents the value of all assets that could reasonably be expected to be converted into cash within one year. An asset may be depreciated over time, so that its recorded cost gradually declines over its useful life. Alternatively, an asset may be recorded at its full value until such time as it is consumed. An example of the first case is a building, which may be depreciated over many years. An example of the latter case is a prepaid expense, which […]

Variable expenses vary from month to month and are typically a company’s largest expense. An example of a variable expense would be payroll for a company with a large amount of freelance personnel, or overtime expenditures. The only exception is if the expense is used for both personal and business reasons. Because the Tax Cuts and Jobs Act limited the amount of property tax filers can deduct, you cannot use the home office deduction to deduct the full amount of your property tax if it ex […]

A small conversion cycle means that a company’s money is tied up in inventory for less time. In other words, a company with a small conversion cycle can buy inventory, sell it, and receive cash from customers in less time. The cash conversion cycle should be compared to companies operating in the same industry and conducted on a trend. For example, measuring a company’s conversion cycle to its cycles in previous years can help with gauging whether its working capital management is d […]

She is an expert in personal finance and taxes, and earned her Master of Science in Accounting at University of Central Florida. Generally you will see the adjustment/write-down either in COGS, if relatively small, or as an income statement operating expense if larger. Your account officer could be on the right track, if it were not for the escalating amounts. Any business that maintains inventory must also account for shrinkage, in which some goods become unsaleable due to damage, deterioratio […]