You have done work for your clients and you sent them a bill, but if you use the cash method of accounting how do you account for these unpaid invoices? Technically, under the cash basis we only record revenue when a client pays us for services performed. But even true cash basis companies may perform [...]

A Balanced Score Card is similar in concept to an employee performance evaluation for your business. It will list a set of performance measures you desire to track. The Balanced Score Card should be created by using your own company’s goals, which were established from the organization’s strategies. The Balanced Score card can measure what [...]

For any business cash is important, many people even say that “cash is king.” So when a business owner is looking at their cash position are they referring to their bank balance or are they looking at their statement of cash flows? Many small business owners do not use the statement of cash flows and, [...]

In the Arizona Republic, the Phoenix Metro area newspaper, there was an article in the business section about how math literacy is directly related to wealth accumulation. According to the article, if a couple can answer three questions correctly they are more likely to accumulate wealth than couples that do not get all three questions [...]

This time of year we are busy scurrying to complete holiday shopping, which could include gifts for your employees. The decision to pay bonuses or provide a gift requires careful analysis of the year-to-date results, promises/expectations of employees, and your cash position. Unlike the purchase of machinery or equipment, these payments do not return a [...]

As we approach the last month of the year many businesses are in the middle of planning and preparing for a new year. One of the most common planning tools is a budget. For some tips about how to create a budget refer to Budgeting: Are You Doing It? and Year End Budgets. These posts [...]

Supply and demand are two keys that drive business. While these are more economic principles than accounting topics, we use these concepts in budgeting and planning. Even if a small business owner doesn’t prepare a yearly budget, they most likely have calculated the break-even point. The break-even point tells us how many units we need [...]

When you are considering different options for your business, such as should I buy that new truck or laptop computer, how do you determine what factors play into your final decision? Do you crunch the numbers before making the purchase or do you just buy what you need/want? Hopefully you crunch at least a few [...]

Accounting is like a foreign language. The terminology is sometime intuitive and other times very challenging. My students spend the first few classes learning the differences between an asset and a liability as well as debits and credits. They are almost always confused why a debit increases cash and a credit decreases cash because the [...]

A cash budget is more than a summary of your expected cash inflows and outflows. It is a planning tool for making sure you have cash to pay for daily operations, cash to pay for emergencies and determine the amount remaining for growth opportunities. In order to complete a cash budget you need a few [...]