Do you have a great business idea, but cannot find a bank or investor to give you any funds? Maybe you need a little extra cash for your business, but again, you cannot find a bank lend you an money. There are really few options when you are in these types of situations. Often friends [...]

Most business owners are not accountants and know enough about Net Income and/or Cash Flow to get by. Your financial statements are full of a wealth of information and each statement tells its own story of what is happening in your business. While cash is King, the balance in you checking account doesn’t tell you [...]

A Pro Forma is an estimated financial statement, usually the Income Statement (aka Profit and Loss Statement). Entrepreneurs prepare a pro forma for many reasons, but the main one is to obtain financing either from a bank or an investor. As with most everything, the pro forma is only valuable if the information used to [...]

Good credit is an important aspect in both your personal life and in your business. Many people often assume that they are one in the same, but they are not.  There are different factors considered when it comes to figuring out your business versus your personal credit score. The organizations that report and monitor personal credit are [...]

When you purchase supplies the transaction is an easy one from an accounting stand point. You use cash, credit card or vendor credit to make the purchase and report the supplies as an expense on your income statement. Most business transactions in accounting make sense. But one that trips up business owners and students is [...]

With any business, especially during challenging economic times, it is important to understand what the current ratio is and how to use it. The current ratio is considered a liquidity ratio which measures a company’s ability to pay short-term loans. The formula for this liquidity ratio is: current assets over current liabilities. The result of [...]

When you own or are starting a business, you need to implement benchmarking (aka Best Practices). This process helps to determine how your business is performing against your internal standards as well as your competition. Doing so will help you assess how effective or ineffective your business is performing in operations, customer services, sales, or [...]

A benchmark is an internal or external measure of how your business is performing. Benchmarking is also described as Best Practices and/or Ratios. Benchmarking is the most effective way to monitor and track the progress of how your business is doing, both good and bad. When you take a look at how you can make [...]

What does the term net worth mean? And why is it something a business owner should pay attention too? The actual definition of net worth is: total assets minus any total liabilities. Unfortunately, this is not helpful to those unfamiliar with accounting terminology. Let’s take a closer look at this. Net worth is a combination of money [...]

Debt is a word that many business owners do not want to use to describe their financial position, yet managing and monitoring debt is a task that small business owners tend to avoid. In general, debt that is due and payable within the next 12 months is called Current Liabilities. Paying these debts will probably [...]