An income statement is one of the four most important financial statements a business must issue. In addition to the cash flow statement, balance sheet and statement of retained earnings it provides a vital overview of the financial health of the business. In order to prepare an income statement there are a number of key […]
The IRS requires businesses to provide information about contractors and freelancers that they use. This information includes the freelancer’s or contractor’s taxpayer identification number, name and address. This information is submitted via a W-9 form, and is used by the business to prepare a 1099-MISC form to report to the IRS the income that the […]
We looked in a previous article at the methods used to calculate Cost of Good Sold. FIFO and LIFO are two ways of determining that cost. FIFO (First In, First Out) calculates Cost of Goods Sold on the basis that a business’s oldest inventory items are sold first. LIFO (Last In, First Out) on the […]
The first step in calculating retained earnings is to subtract a business’s liabilities from its assets to determine stockholder equity. Next, on the balance sheet find the common stock line item and subtract this figure from the shareholder equity (this assumes that the common stock and retained earnings are the only two items in your […]
Understanding your profitability is absolutely vital if you are to make good business decisions. A profit & loss statement will help you to determine whether your revenue is greater than your expenses, and thus whether you are making a profit or a loss. There are three main sections to a profit & loss statement – […]
Manufacturing overhead costs are all the indirect factory expenses associated with the manufacture of a product. Calculating manufacturing overhead involves adding together costs such as indirect materials, plant repair, indirect labor costs, insurance, factory supplies, depreciation, utilities. Manufacturing overhead is sometimes referred to as factory overheads or manufacturing support costs. Whichever term you hear, it’s […]
It’s all too easy to think that your clients and clients don’t want to receive your invoices. But in fact, if you invoice right your clients will actually be glad to get them. After all, a clear, professional invoice makes it easy to see how much is owed, for what services, and how it can […]
According to a 2016 survey by Upwork, the number of freelancers in the US had risen by more than two million since a similar survey just two years before. Upwork’s Freelancing in America survey revealed that more than one third of the workforce – 55 million workers – operated as freelancers. Hardly surprising given some […]
Keeping a record of your billable hours and issuing invoices to your clients is a fundamental part of operating a consultancy business. Ensuring that you know exactly how much each client owes, and billing them regularly, will ensure you get paid the correct amount in a timely manner. How to Invoice Your Consultancy Clients […]
Bank reconciliation is the process whereby you match your bank statement to corresponding entries on your balance sheet. Identifying any discrepancies will help you to correct your accounting records, and spot potentially fraudulent transactions. How do You do a Bank Reconciliation? Bank reconciliation is a comparison of your account balance as reported by your […]
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