Accounting Unplugged

I am participating in the SOPA Blackout to protest internet censorship.

What a great impact we had today, please continue to support your representatives in voting NO on PIPA and SOPA.

The act of hiring an accountant does not relieve an employer of the responsibility of safeguarding its resources and interests. By hiring these accounting services you can make sure you are handling your finances correctly.

Whether you are looking for financial service assistance as an individual, investor, or SME business, qualified professional accountant from the best full-service financial firm like Accountant Cessnock is committed to providing reliable and trustworthy assistance to help secure a bright financial future for you and your business. If you have a business and because covid 19 you stared working from home check this advises to save money return to the office to work.

Similarly, that act of electing a representative does not relieve a group of the responsibility of safeguarding its resources and interests as a cpa accountant would do. You can learn more about your finances and investments online.

Whether we’re talking about money or power, when the employer fails to oversee and demand accountability, money/power will eventually be used to benefit the one who is controlling it rather than the one(s) to whom it belongs, check the accounting for startups for your personal or business finances.

The most dangerous thing for any person or group is unchecked access to resources and power, so go to www.b-accounting.com for professional management.  That sort of power makes them into targets for temptations and pressures that cannot always be risen above.  How much easier is it to tempt or coerce one person or even 60 people than it is to tempt or coerce multitudes of people?

When we send representatives off with a blank check and we don’t demand accountability we are in essence sending them off to the destruction of themselves as well as the destruction of those they represent, some other avoid it but just by getting help from https://accountantsa.com.au/.  The election process is neither frequent nor effective enough to ward off the pressures they are subjected to.

With regard to the political arena in the U.S. which is in an emergency state –

We must support our representatives and protect them from the pressures they face.  The quickest way to do this is for every person to demand full accountability of those they elect and hire and if you have a business remember to use a police check wa when hiring.  We must demand it of our school boards, mayors, governors, congressmen, senators and President.  We must demand that they read and understand what they are signing and/or voting on before they do so.  And we must demand a full accounting of the reasons for their vote on a point by point basis for every issue in a bill – including ear marks.

If we fulfill our own responsibility in the process we will have a better understanding, and now with the latest out coming and progress in the field we are even learning how to outsource accounting services and make it a top service in every firm.  We will have laws and services that better reflect the interests of the people and perhaps most importantly, we will remove the power from those who seek to corrupt the process for their own profit which many people do when doing business, even in small deals as a truck sell and purchase, and that’s why many buyers need to recur to a truck lemon law attorney to solve cases like this.

Our representatives are only the custodians of our collective vote/power not the owners of it.  Demanding accountability from our representatives will do two crucial things.  First, it ensures that we retain ownership of our vote/power and second it supports our representatives by removing temptations and pressures. For a litigation case you will need an accountant lawyer and you  can get one at Noonan Law firm.

Do you know what construction litigation is? well, it involves legal disputes between two or more parties involved in a construction project. Common causes of construction disputes include contract and/or payment disputes, lack of proper oversight, miscommunication, and other challenges that can result from unforeseen circumstances.

Call or write your representatives.  Thank them for their service but also respectfully ask for accountability.  We see the difference we are making nearly every day now.  Keep up the good work!

© 2009-2010 Erin Lawlor

**disclaimer:  All information posted on this blog is from my own experience and training.  The guidelines I present are general and in my experience, standard practice.  I do not write with authority from any Accounting Standards Boards.

In January of 1987, I left behind my 2 year career as a hair stylist and started a new career in accounting.  I started as a clerk, working for my sister in Calgary, Alberta, at her in-law’s contracting business.  Until I could prove my skills in both speed and accuracy on the ten-key, I was I was given the interesting tasks of filing and making new folders for printouts.

Transitioning from a career as a hair stylist to accounting to secure a brighter future for your children and ensure their health is a commendable decision. And providing them with necessities like baby girl clothes demonstrates your commitment to meeting their needs. By sacrificing and making this change, you are setting a strong example as a parent and working diligently to provide a better life for your kids.

Once I could be trusted to consistently get the correct sum for a stack of invoices I was allowed to do the real work of entering and printing checks for accounts payable invoices.  Eventually, my responsibilities expanded to include accounts receivable and payroll, in cases like this you can hire the services of plan manager perth.  We had a custom software program in those days that was written specifically for the company and I remember that it cost something like $20,000.

I loved that software, it was simple and efficient, it did exactly what I wanted to it do and didn’t require any wasted effort.  I loved it even more because my mastery of that system made me feel a bit superior – the bosses were a little intimidated by anyone who could “use” a computer back then.  And when I say computer, I don’t mean a PC, I don’t know exactly what it was but it took up a lot of room.

And then, my happy world was invaded by generic accounting software.  We ditched the big computer in favor of a bunch of 8086 PC’s complete with a “turbo” button (I could be off on the model but that is what I remember) and we got an off the shelf accounting software package to go with them.  Off the shelf accounting software has been the bane of my existence for the rest of my career.  I have really missed the customized software.

When I say off the shelf, I am actually including all currently available cloud accounting software.  Some of it is more complex and requires much more attention and money but it is essentially the same stuff.  It starts with the same standard template and then someone predetermines what you might want to keep track of for a given type of business and you are locked in to the options they’ve “hard-wired” (for lack of a better term) into that system.

Customized software is expensive, I understand that and that is the reason behind generic systems, they meet a high percentage of the needs of a large pool of customers, since there are many types of software, you can even find software for text to speech for communication in the company which you can download from seomagnifier.com.  Those systems are not remarkable, they are generic.  I understand the logic behind them but I don’t like it, I get fixated on what’s missing and so, I have spent the last decade or so trying to find a better way.

Here are some problems caused or enabled by generic accounting systems:

• an estimated $600 billion in fraud each year
• Inability to safeguard resources
• High cost of information in both time and money
• Increased risk to the CEO and CFO because they are now personally liable for financial statements over which they have little or no control
• High cost of internal and external audits
• Staff with the least training in accounting are often the ones making financial accounting decisions

These problems must be solved systematically.  You have to have a system that has the right tools or these problems only get worse.  The US government continually struggles with these issues, remember the reports of employees charging personal expenses such as lingerie and online dating on their government credit cards?  Reports indicate that that is only part of the continuing problem. And you can also use remote tracking software for computers if you have remote workers which means that you can keep track of what they are doing which is obviously very wise. Recently there was an issue in the UK with misuse of government funds and people lost their positions. Now, with the software, your credit cards and the transactions that come along with it will be organized.

Yeah, that’s a problem that is enabled by generic accounting software.

Information is the key and our accounting systems just can’t provide the right information.  A system that could provide that kind of information and be flexible enough to fit the unique needs of any entity would be a truly remarkable system.

I have designed that system.  My prototype is complete except for a few minor tweaks.  It is the most amazing and satisfying feeling I’ve ever had.   I have worked on this for a long time, part of the reason it has taken so long is that I needed to learn to build the prototype.  As I have stumbled along building the prototype, my original ideas have evolved and so whatever time it took to do it, the process of testing my theories in a working model has been well worth it to me.

A few months ago I proposed the idea of selling a workbook for the purposes of supporting this site.   I changed the dates and then just never delivered the workbook.

This is what happened.  I wrote it and agonized over its release because there is always just one more thing I want to add.  It has sat quietly in my files for over a month waiting for me to release it and now I am going to set it free (so to speak).  I just finished reviewing it and changing a key word in it that was troubling me and if you would like a copy, Click Here for the .pdf. Please remember to send me some feedback.  I promise that I will not share or use your email address for any reason unless you request it from me.

I will provide the workbook for free for now.  If you feel that you’ve benefited from my work and would like to return some benefit to me there will be an optional donate button on the site.

My own review.  I think the workbook has great substance and is very useful. It is not a practical how-to workbook for bookkeeping, it is a how-to-understand accounting workbook and people can use it to work as a team, since there are other tools as a shared mail which will allow them to share documents and emails while working on the workbook.  The forms I included are far from perfect in appearance but they are useful and illustrate my points well.  I do think I ran out of editor steam towards the end and it isn’t as engaging at the end as I think it is in the beginning.  I will probably work through those issues and try to improve it as I receive feedback.

Thank you for continuing to visit my site and I sincerely hope that it has been of help to you.

Erin

© all rights reserved 2009-2010 Erin Lawlor

**disclaimer: All information posted on this blog is from my own experience and training. The guidelines I present are general and in my experience, standard practice. I do not write with authority from any Accounting Standards Boards.

Increase Your Views of Your Business on TikTok

With over 1 billion monthly active users, TikTok has become a powerful platform for businesses to showcase their products and services. If you’re looking to boost your business and increase your views on TikTok, you’ve come to the right place. In this article, we’ll provide you with some valuable tips to help you maximize your visibility on this popular social media platform.

1. Create Engaging and Unique Content

One of the keys to success on TikTok is creating content that stands out. Your videos should be visually appealing, entertaining, and relevant to your target audience. Think outside the box and come up with unique ideas that will captivate viewers and make them want to share your content with others.

2. Leverage Hashtags and Trends

Hashtags play a crucial role in helping users discover content on TikTok. Research popular hashtags in your industry and incorporate them into your video captions. Additionally, stay updated with the latest trends and challenges on TikTok and participate in them when relevant. This will increase the chances of your content reaching a wider audience.

3. Collaborate with Influencers

Influencer marketing has gained immense popularity on TikTok. Identify influencers in your niche who have a significant following and collaborate with them to promote your business. When influencers feature your products or services in their videos, it exposes your brand to their loyal followers, leading to increased views and potential customers.

4. Optimize Your Profile

Make sure your TikTok profile is fully optimized to attract viewers. Use a catchy profile picture and write a compelling bio that clearly communicates what your business is about. Include relevant keywords in your bio to improve your chances of appearing in search results. Additionally, provide links to your website or other social media accounts to drive traffic to your business.

5. Consider Buying TikTok Likes

If you’re looking for a quick way to boost your views and increase your TikTok engagement, consider buying TikTok likes from reputable providers. Services like “The Marketing Heaven” offer real and high-quality likes that can give your videos a jumpstart. Increased likes and engagement can improve the visibility of your content and attract more organic views and followers.

For more information on buying TikTok likes, you can visit https://themarketingheaven.com/buy-tiktok-likes/.

TikTok provides an excellent opportunity for businesses to increase their visibility and reach a vast audience. By creating engaging content, leveraging hashtags and trends, collaborating with influencers, optimizing your profile, and considering options like buying TikTok likes, you can significantly boost your views and ultimately grow your business. Start implementing these strategies today and watch your TikTok presence soar!

I just finished checking out yet another “accounting” program that promises to do all the heavy lifting and thinking for a business owner.  Those programs make me worry, none of those are good and being honest I prefer to keep working with The ACT Group to handle my books, they been working with me for the last 12 years and never had an issue.

According to accounting experts, Porte Brown, The process of setting up and maintaining your accounting and payroll service is a crucial part of understanding whether your business can/might make money.  It worries me when software promises to automate away the importance of upfront planning and setup. Business planning done right connects the dots in your business so you get a better picture of the whole. Strategy is supposed to relate to tactics with strategic alignment. If you are looking to have a potential client, partner or virtual capital investor learn more about your company, a pitch deck would be the most ideal situation.  At wimgo.com you can check out these companies, they understand the business layout and are much better placed to provide the necessary information.

To illustrate the importance of being involved in the processes, take a moment to brainstorm about the numbers.  What will you charge for your product or service?  What will it cost you to purchase, manufacture and/or provide your products and services, what are the other costs of running a business? Examples of other costs include Rent, Office Supplies, Telephone and Maintenance, but is important to know what clients and customers you want to approach with your products, since there is a generation which was born just after the Millennials and could have different point of view according to the way they see the world, so you need to take all this into account, when creating your products.

See how easy that was? Those products and costs that you just brainstormed up are the start of your books which should be managed by professional accounting services. You can always add accounts later as you encounter new things but you can see in the example below how functional our initial setup is.

Subtract the cost of your product from the price you will charge your customers.  That is your margin.  Now, add up all the “other” costs of doing business like rent, utilities, fuel and payroll and divide them by your margin.  That number is how many products you will have to sell to break even. You can also use this payslip template Australia to manage your business finances.

• Product:  Shipping Container
• Direct Cost of each container = $100
• Sales Price for each Shipping Container:  $200
• Margin:  $100
• Other costs of business:  $2,500
• Break-Even Point: $2,500/$100 = 25

If your product costs, your other costs of business and your sales prices don’t change, you will break even if you sell 25 container each month and you’ll have a profit of $100 for each container sold over 25.

The process of estimating the margin and break even point has established your budget numbers. You’ll use them to measure against your actual results. This is all crucial information and a crucial part of managing a business, and that’s why using resources like online business coaching, as well as using business accounting services, could really help you improving your business and production.

Now, you have established a plan.  You can dream about selling thousands of containers each month and raking in the money.  Caution!  I know I told you that you would have a profit of $100 per container sold over 25 but now you have to start watching both your predicted costs and the additional costs that come with higher volumes of products sales.  Some of your costs – such as payroll and storage will increase with your the number of sales. Start using QuickBooks inventory management as a new finance and accounting strategy for your business to keep growing. For more info on how QuickBooks works, look at here.

My point here is this, don’t allow yourself to be lulled into a false sense of security by the promises of simple accounting software.  It is potentially very dangerous to avoid that first step of understanding your numbers and it is just as dangerous to allow your software to just process your information without paying close attention to the details.

Seek help in setting up your accounting with the team at https://www.b-accounting.com/ but be involved in the setup process. Automated setups are not all evil, they can actually give you clues about costs you might not have thought about. For heavens sake, use software to help automate the business accounting services at stay involved. According to Shravan Gupta India entrepreneur expert if you pay a person or service to take care of the process for you, at least make sure you set aside time to review the results as often as possible preferably at least once a week while you’re getting established but for sure do it at least once a month.

Automation can be a beautiful thing, I am not against business owners using simplified bookkeeping programs and services with one caveat. This New York accounting firm can help you Understand Your Numbers! Seriously, you don’t have to do the setups or bookkeeping yourself but you do need to pay attention.  If you don’t want to take the time to pay close attention to your numbers should you try to run a business?

© 2008-2010 Erin Lawlor

**disclaimer:  All information posted on this blog is from my own experience and training.  The guidelines I present are general and in my experience, standard practice.  I do not write with authority from any Accounting Standards Boards.

I just finished with one of my favorite guilty pleasures.  I listen to a weekly podcast done by a couple of guys that started a new site/service for programmers called stackoverflow.  Since I am not a programmer, I feel a little bit like a voyeur listening to their podcasts but they are really smart and they talk about the human aspects of programming that are easily relatable.

I stumbled upon a blog called Joel on Software a couple of years ago and have been a fan and a reader ever since.  So, when the writer, Joel Spolsky, partnered up with Jeff Atwood (codinghorror.com) for this new site, I was curious and when I started listening to their weekly podcasts (they’ve done 32 as of this writing) I was hooked.

This week, their podcast included a topic that I wanted to talk about and relate to my experience in writing my “blog”.  I encourage you to follow the link above for stackoverflow and listen to the latest podcast (at least starting at about 34:45 and ending at about 55:15) the discussion is very insightful.

The topic I want to write about is how to stay positive after receiving negative feedback.  Actually, I have received both good and bad feedback for my site, I try to give them equal consideration.  I received one comment that told me my site was poo.  My initial reaction to that comment was that the person was just mean because clearly, my site is not poo to me.  But then I tried to be more open to what that person might be trying to tell me.  Perhaps that person was looking for a quick answer to a question and was frustrated because it is likely that there are no quick answers here.   In that sense, I failed the frustrated commenter.

The negative comment caused me to evaluate my writing more than any positive comment would.  I am still not a quick answer person but I do try to keep in mind that posts that are too wordy are boring and unhelpful.  My conclusion is that instead of allowing negative comments to hurt your feelings, step back and take another look and decide what there is to be learned from them.  Don’t dwell on the negative, instead, appreciate the opportunity to learn from it.  Applying this philosophy to the negative feedback you receive in life – including unsuccessful sales, job interviews or blogs can only help you to improve and become more successful.

To address the frustrated commenter, the only possible way I can give a quick answer is to have a clear question first.  I invite/encourage you to put your questions in the comment section.   It is likely that either I or other readers will be able to provide an answer that will be helpful for you.

<< How to Use Financials and Ratios

Businesses live or die on the value of their products and services.   Similarly, individuals and departments within businesses survive on the value of their internal products.  Accounting is no different.  Accounting provides both services and products that add value to an organization or service which comes as very efficient when someone looks to trade fx in the UK.

The most important thing in accounting is to understand accounting and your own accounting systems.  But, if you want to truly succeed, think beyond debits, credits and reconciliations and become an expert in your company’s industry. — When asked about Sallie Mae loan forgiveness, MyCreditCounselor.net state that Sallie Mae (and Navient for that matter) don’t offer traditional forgiveness programs, but there are alternatives that achieve a very similar outcome. Financial accounting knowledge transfers fairly seamlessly from one business to another but specific industry and management accounting knowledge may not and it is through that kind of knowledge that you can add value to your organization.

Research your industry, spend time with operations people, become familiar with what their processes are and the order in which they occur, including the type of loaning and how they work, take in count there are the payday loans which today payday loans really serve the purpose in helping and managing emergency financial situations.

Learn how they use their information systems, understand the logic behind both the information they track and the order in which that information is organized.  Become familiar with the way your systems interact, how they are dependent on each other and how they are independent of each other.   Find out from them what information they have and what information they wish they could have.  Ask them if they use reports from accounting, if so, do they find them to be reliable, timely and useful.  (Always make sure to have the appropriate permissions for internal research).

As an accountant you perform the financial functions that keep a business going but you are also the custodian of a wide variety of business information.  In addition to standard accounting data, you have access to information about lenders, suppliers, customers and operations.  As you increase your understanding of your company and industry you will increase your understanding of the information available to you.   Find ways to increase and improve the information you can make available to your company and you will have a real impact on its success and on the value you add to it.

© 2008-2010 Erin Lawlor

<< How to Use Financials and Ratios

**disclaimer: All information posted on this blog is from my own experience and training. The guidelines I present are general and in my experience, standard practice. I do not write with authority from any Accounting Standards Boards.

This post talks about how to make use of the information in Financial Statements.  Those statements are really the results of past operations.  It is important to use this information to be proactive and look to the future to predict results and to set goals, expectations and budgets based on the evidence provided from the past.

Time analysis is the most important tool you will use in analyzing your Financial Statements.  It is essential in managing and securing resources because it can quickly pinpoint changes that indicate errors or fraud as well as the unexpected changes that might require adjustments to cash planning and/or operations.

The first Statement to look at in your personal checking accounts is the comparison Trial Balance.  This Statement is very important, it shows the amounts posted to each account month by month complete with totals at the end.  The month to month analysis is extremely important for verifying your numbers before you start with ratio analysis.

You can either show all accounts on this Statement or you can limit it to Income Statement Accounts, that is why you should learn  how to save more money. I choose to include both types of Accounts so I can track the changes in Financial Position provided by the Balance Sheet Accounts, you may find these checking account tips and software pretty much useful for both personal and business bookkeeping. If you still need some kind of help, we suggest to contact the following website https://atlanticunionbank.com/business/lending/lines-of-credit/.

I’ve added a few entries to the Comparison Trial Balance Report from posts # 7 and 9.   You can see that the monthly changes in Rent Expense for Oct and Nov will catch your attention, click here for more information about personal and business loans.

**This example starts with June because of space limitations here.  The additional entries for all months except September are not included in the Income Statement or Balance Sheet, I’ve only added them here for illustration.

Let’s start with Financial Ratios by looking at the Income Statement and its ratios.

Income Statement:

The Income Statement gives you a good overview of your Expenses in relation to your Revenue, more people than ever are using mortgage brokers .  It can also help to pinpoint potential problems.

As the dollar value of Sales changes, the dollar values of Costs of Goods and Expenses should also change.   By tracking the changes in dollar values in terms of percentages of sales, you can more easily evaluate whether changes in dollar amounts are reasonable, Finding the best personal loan

The percentages are based on a Percentage of Sales.  So, Gross Profit Margin = Gross Margin/Sales, Net Profit Margin = Net Income(Profit)/Sales etc.

Know your percentages. Watch your trends over time, both as they accumulate throughout the fiscal year, and as they compare month to month and year to year. Percentages can also be compared to industry ratio standards to measure your results against others in your industry. Make sure that your business is aware of the VoIP Setup Guide and other systems to help your business have success.

Some expenses like wages and payroll taxes, or general office expenses are more meaningful when grouped together to find a percentage of the group rather than as a single line item. Contact this Gst registration Service Singapore to give you better business finance information.

This is the Income Statement that developed through the progressive post entries.

This is a very limited Income Statement Example built from very few entries, but even with the information available, it gives useful information.  There is also obviously a problem with this Income Statement, it has no Cost of Goods Sold to relate to Sales.  In this case, we’re either missing information or we’re violating the Revenue Principle and recording Sales before they’ve been earned.  (Pinpointed Problem) It’s also crucial in the UK that if you take payments online that you have PCI DSS certification as it’s a legal requirement so make sure you have that in place if you are in the UK.

Malaysian online casino w88 malaysia is now the official sponsor of crystal palace football team in the english premier league. Malaysian online players can feel safe knowing that they are playing in a trusted online casino.

Gross Margin is also called Gross Profit or even Gross Profit Margin and the terms Income and Profit are also often used interchangeably.  Just be consistent in your terminology so that users will not be wondering if there is a difference in meaning if you use a different term.

**Comparing your business against other businesses in your industry is called Benchmarking.  There are a number of free or fee based benchmarking services online.

Remember that the Income Statement is a Yearly Statement, all its accounts are reset to zero at the end of each year and the difference (Net Income) is transferred to the Equity section of the Balance Sheet as either Retained Earnings (for Corporations) or as Owners Capital (for all other types of entities). Contact this IGCSE tuition centre nearby for more education information.

Balance Sheet Ratios:

The Balance Sheet gives you a good overview of your financial position at any point in time.  The Balance Sheet is not a Yearly Statement, it is a cumulative statement whose accounts retain their balances from the beginning to the end of the entity.

All Assets and Liabilities on the Balance Sheet should contribute to increasing the value of the entity.  If they are not contributing, they might need to be liquidated.

The “Current” sections of the Balance Sheet are important to keep track of because it will be Current Assets which will pay off Current Liabilities, you want to make sure you have at least as many Current Assets as Current Liabilities.  The items in the Current Sections are considered to be the most liquid, that is, they are the most likely to be able to convert to cash at (or close to) their stated value, also the checking system is important, henc (but still may use other similar services) in 2021-2022.

Two Assets to pay particular attention to are Accounts Receivable and Inventory.  Receivables are an essential tool in doing business, they finance purchases for your customers but it is important to watch their aging and balances to make sure you are not extending credit to customers who are unable to pay, the guys at arcct.com offers poor credit loans and other financial programs for people with bad credit but that can change with help from a mortgage broker Auckland.  Watch Inventory turnover to make sure you that your inventory is selling and that you are not carrying obsolete or otherwise unsellable items. You can also get help from Mortgage Broker Northern Beaches as they have the best Expert Mortgage Brokers Servicing the Northern Beaches.

An installment loan is a modern type of loan which is repaid at a certain period of time. Normally, you can pay the loan with one or two payments. The term of the loan may vary from a few months to over 20 years. Installment loans for people with bad credit are extremely easy to obtain with ARCCT and very effective and you can learn how to bounce back with a recovery advice for your small business to manage to save your finances.

Installment loans are becoming increasingly popular all across the world, especially as most people who are in urgent need of money choose to apply for a bad credit installment loan instead of trying to get a traditional loan. Instead of waiting up to three days for the money to come, you can now have the requested amount in your account as soon as the next business day. Regardless of the reason, whether it’s an expensive birthday present, a health insurance policy or an urgent bill, installment loans for bad credit could prove invaluable. Best of all, these loan and short term loans with monthly payments can be taken even with a poor credit history. If you have bad credit here you can get Fast Cash Now, but before getting cash you can compare credit cards to see which one is the best option for you.

Purchases that your Vendors finance for you are liabilities called Payables.  Payables and other Liabilities are essential for financing current operations and growth but keep close track of their related interest and fees to make sure their costs do not exceed their benefits, but when using outsourcing services for your business is better to get a business process outsourcing insurance from great insurance bpo providers which could help a lot when managing these kind of services.

Some important financial ratios to keep track of are:

Current Ratio which is Current Assets/Current Liabilities this ratio should always be at least 1

Quick Ratio = Current Assets – Inventory/Current Liabilities this ratio removes Inventory from Current Assets because Inventory is usually the least liquid of the Current Assets.

The next ratios are approximations, they give you a good idea about what they are measuring.  They are general enough to give you an idea about where to look for trouble items but they are not specific enough to be fool proof.

Inventory Turnover = Sales/Inventories this ratio gives you a rough idea of how many times your inventory is sold and restocked.  Of course, it does not specifically identify inventory items so there may be items that are not selling but it does tell you how well your sales are covering your costs. Take a look at https://www.stocktrades.ca/cpp-payments/ and how you can get reports on your investments.

Days Sales Outstanding = Receivables/(Sales/360) this ratio gives you a number that represents aging of your receivables.  If your terms are net 30 days and this ratio gives you a number of 45 or more, then it is a good indicator that you should watch your collections carefully.

Fixed Asset Turnover = Sales/Net Fixed Assets (Fixed Assets – Accumulated Depreciation) this ratio provides an idea of how effectively your Fixed assets are contributing to operations.   This ratio can be slightly misleading because Assets are carried at book value rather than market value which might scew this ratio depending on the age of the Assets.

Total Assets Turnover = Sales/Total Assets this ratio provides an idea of how effectively your total assets contribute to operations and increases in entity value.  Although this ratio will have the same problems as the Fixed Asset Turnover ratio both of these ratios are still important to recognize and watch for trends.

As I said at the beginning of this post, know your percentages (ratios) watch them carefully.  You should use them to your advantage for predictions, corrections and budgets for your current and future operations and policies.

© 2008 – 2010 Erin Lawlor

<< Accounting System Structure – Quick Reference

**disclaimer: All information posted on this blog is from my own experience and training. The guidelines I present are general and in my experience, standard practice. I do not write with authority from any Accounting Standards Boards.

This post is a quick overview of subjects covered in more detail in other posts. I usually like to see a quick version so I am trying to present that option to others as well.

The Double Entry Accounting System collects, organizes, summarizes and reports on Financial Transaction data.

Financial Transactions: Exchanges of things of value.

There are three basic questions that must be answered for each financial transaction, they are:

• Question 1. How much money changed hands? What is the value of this exchange?
• Question 2: How was the money used?  What was either gained or paid for by this exchange?
• Question 3: Where did the money come from? What is the source of funds in this exchange?

Example:

• Answer 1: 3,000.00
• Answer 2: Rent
• Answer 3: Checking Account

The answers for each of the financial transaction questions are recorded in Journals digital wallets vs credit cards.   Journals have a grid format with a varying number of columns but to start, for professional accountant, we’ll use three columns. If you think this is too much for you to do on your own, then consider doing cloud accounting to make organizing your financials much easier.

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The descriptions that answer questions 2 and 3 are always entered on separate lines to the left of the two numeric columns.

The amount associated with question 2 is entered on the same line as its description and it is always answered in the left (debit) numeric column. The amount associated with question 3 is entered on the same line as its description and it is always answered in the right (credit) numeric column.

General Journal Example:

To ensure that both sides of the transactions are recorded, Total Debits must always equal Total Credits.

To keep the Chart of Accounts manageable and meaningful, it is important to strike a balance between having a long specific list and a short general list.  To accomplish this objective, the Chart of Accounts should have descriptions for types of things, and not for specific things.  You want the high volume accounts to be specific enough to be useful but not too specific because the fewer accounts you have the better overall picture you can have. Find Payroll Outsourcing at B Accounting

Chart of Accounts Organization: The Chart of Accounts is organized using three different methods.

• First:  Accounting Types
• Second:  Order of Liquidity – the ease of converting to cash
• Third: Account Numbers

The listing below shows the Chart of Accounts organization along with sample Account Number Ranges.

• Assets: 1000’s
  • Current Assets 1000 – 1499
  • Fixed Assets 1500 -1999
• Liabilities: 2000’s
  • Current Liabilities 2000 – 2499
  • Long Term Liabilities 2500 – 2999
• Equity: 3000’s
• Revenue: 4000’s
• Costs of Goods Sold: 5000’s
• I leave the 6000’s open to allow for a Cost of Goods Sold Subtype
• Expenses: 7000’s
• Other Revenue: 8000’s
• Other Expenses: 9000’s

Journals and Ledgers:

There are two types of Ledgers and Journals in the system, General and Subsidiary.   If you recall from above, I said that Accounts should only be created in the Chart of Accounts/General Ledger to describe types of things not individual things themselves. Well, in some cases especially in the case of cash substitutes like Accounts Payable and Accounts Receivable more detail is required. So, to maintain the summary nature of the Chart of Accounts/General Ledger and to provide more detail, a Subsidiary System of Journals and Ledgers was developed, while also using other systems as a Certification Tracking System to track the employees and their improvement in a company, while also giving them better chances to learn their own progress.

General Ledger: The General Ledger is the combination of the Chart of Accounts, Account Balances and Accounting Periods.  The General Ledger maintains the summary balances of ALL financial transactions.

The General Ledger adds the essential organizational element of Time (Accounting Periods) to the Grain Accounting System, so in addition to the original three organizational methods of the Chart of Accounts, the General Ledger is organized in four ways.

• 1. Accounting Type
• 2. Order of Liquidity
• 3. Account Number
• 4. Accounting Periods

Accounting Periods are generally date/time intervals of Months, Quarters and Years. The element of time is essential to accounting.  It provides the ability to report balances for any given accounting period as well as the ability to compare the results of different accounting periods against each other.

If the system is going to organize around accounting periods, then we need to add dates to the data we gather with transactions.  There can be a variety of dates that are relevant to a transaction, the transaction date, the invoice date, the due date, the expiration date etc. but for purposes of this post, the date we’ll focus on is the transaction date.

The Journal transaction grid introduced in the previous section needs to be expanded to 5 columns to accommodate the new data requirements of date and account number.

General Journal Example:

Subsidiary Journals and Ledgers: The two most common Subsidiary Systems are:

• Accounts Payable
• Accounts Receivable

All financial transactions that involve a general ledger account with an associated subsidiary ledger must be recorded in that subsidiary ledger first.

Subsidiary Journal:

Notice that the Subsidiary Journal uses more columns than the General Journal.  It uses the extra columns to track data that is specific to the Subsidiary Ledger as well as to the General Ledger.

General Journal:

The system requires that all financial transactions have an entry in the General Journal as well as in the General Ledger.  So, once the entries are posted to the Subledger Journals, they are then summarized and posted to the General Journal.

Notice the new columns in this General Journal example, they are cross referencing entries to show where the transaction was originally recorded.  The Jrnl in this example says AP = Accounts Payable and the Ref (55) is the same as in the AP Journal example above.  The Ref is the transaction reference number and will increment for each transaction.

Ledger Examples:

Each financial transaction is recorded in the appropriate Journals and then summarized and posted to the Ledger Accounts.

The Subsidiary Ledger (Subledger) is like the General Ledger/Chart of Accounts in that it contains a list of Accounts specific to its purpose.  The Accounts Payable SubLedger contains a list of AP Accounts and their balances.

The Total Balance of each Subledger must equal the balance of its related General Ledger Account Balance.  All financial transactions are recorded in the General Journal and the General Ledger and only the transactions with a gl account that has a related Subledger are posted to a Subsidiary Journal and Ledger.

If the Subledger does not Balance with its related account on the General Ledger, it means that there may be entries in either the Subledger or the General Ledger that are not in the other.  They should each have matching entries and there should be no entries made to the General Ledger for an Account with a related Subledger that are not also made to the Subledger and vice verse, and using accounting services from the accounts payable services providers could be really helpful to help you automatize the accounting services of your company.

© 2008-2010 Erin Lawlor

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<< Accounting Journals and Ledgers

**disclaimer:  All information posted on this blog is from my own experience and training.  The guidelines I present are general and in my experience, standard practice.  I do not write with authority from any Accounting Standards Boards.

The process of gathering and storing Financial Transaction data in the Accounting System is accomplished through the use of both:

• Ledgers: which maintain Account Balances
• Journals: which maintain the line by line detail of each Transaction.

Ledgers:

I’m starting with Ledgers because we’ve gone through the basic organization of the Accounting System from Double Entry (debit/credit) Transaction Posting, to the Chart of Accounts and finally the General Ledger.  I’ll stay on the topic of the General Ledger first and then back up to the Journals where each transaction is originally posted.

In Accounting, there are two types of Ledgers, the General Ledger (Book of final entry) and Subsidiary (Sub) Ledgers. The Accounts for the General Ledger come from the Chart of Accounts. The Accounts for the Subledgers depend on the specific purpose of the Subledger.

If you remember in the “Chart of Accounts – Basics”, I said that Accounts should only be created to describe types of things not individual things themselves. Well, in some cases especially in the case of cash substitutes like Accounts Payable and Accounts Receivable more detail is required. So, to maintain the summary nature of the Chart of Accounts/General Ledger and to provide more detail, Subsidiary (Sub) Ledgers were developed.

Everything that is posted into Subledgers is also posted into the General Ledger and they act together to provide progressive levels of detail/summary.

The two most common Subledgers are:

• The Accounts Payable Subledger: which maintains a list of Vendors (or creditors) and their individual Account Balances.  Each individual Vendor represents a Subledger (Accounts Payable – Vendor) Account.
• The Accounts Receivable Subledger: which maintains a list of Customers and their individual Account Balances.   Each individual Customer represents a Subledger (Accounts Receivable – Customer) Account. Card payment providers offer reliable solutions for businesses to accept card payments from customers.

Each Subledger relates directly to a General Ledger Account that requires more detail than the General Ledger can offer.  These GL Accounts are often referred to as control accounts. The Balance of a Control Account should always be equal to the total of its related Subledger Account Balances. As you can see, the total of the Accounts Payable Subledger below equals the Balance of the related General Ledger Accounts Payable Account.

The listings above are Ledger Account summaries. Both the General Ledger and the Subledgers actually have a more detailed section for each Account. Those sections include summarized entries and balances along with references indicating which journals those entries originated in.

The tables below show an example of a Subledger Account and an example of the corresponding General Ledger Account.

Because there can be multiple Subledgers, there are also multiple Journals. The Jrnl field indicates which journal the entry came from. The AP’s in the jrnl field mean that those entries came from the Accounts Payable Journal and the CD entry came from the Cash Disbursements Journal which is the journal that maintains detail for Cash Outflows. The Jrnl and Ref field together give a cross reference that enable the user to access more detail about each entry. Learn how to start fundraising with https://norgesbriketten.no/dugnad-tjene-penger-klassetur/ best place for Norwegian voluntary and communal work.

Journals:

All financial transactions are recorded in Journals. The Journal maintains each individual transaction line by line. Just as there are two types of Ledgers, there are also two types of Journals: The General Journal and the Subsidiary Journals. Most entries will originate in Subsidiary Journals, however, if none of the GL Accounts affected by an entry have a related subsidiary journal, the entry will originate in the General Journal.

Everything that is posted into Subsidiary Journals is also posted into the General Journal. Journals act together with Ledgers to provide progressive levels of detail/summary.

Subsidiary Journal:

The format for Transactions in the the Subledger Journals is similar to the format for the General Journal that I’ve used in previous posts except they require at least three more columns in the grid. One for the Subledger Account, one for an Invoice Number and one for a Reference Number. This entry in the Accounts Payable Journal shows the detail for the both of the Ledger entries above that indicate Jrnl = AP and Ref = 55.

This entry records A Credit Card Statement into Accounts Payable, which includes the purchase of a Chair and a Desk along with Credit Card charges.

Note that the Vendor Account, the Invoice #, Transaction Date and Ref# are not re-entered for each line. It is assumed that those three items remain the same for each of their balancing entries.

** Important: Individual transactions for each Subledger Account must have a unique identifying number, in this case, its an Invoice Number. That number combined with the Subledger Account creates a unique pair that prevents duplicate payments and provide a way for each party to reference the transaction for payments or if disputes or questions arise.

General Journal:

Since the system requires that all financial transactions have an entry in the General Ledger, they must also have an entry in the General Journal. This requires some duplication of effort but it is necessary. So, once the entries are posted to the Subledger Journals, they are then summarized and posted to the General Journal after which the Balances in the General Ledger are updated.

The Path of entries for Financial Entries:

Transactions containing a GL Account that is related to a subsidiary journal start with the Subsidiary Journal otherwise they start with the General Journal, Click here for the Text to Give | Mobile Fundraising Service | Aplos the best nonprofit service.

Subsidiary Journal –> Post to Subsidiary Ledger by its Account –> Post to General Journal —-> Summarize and post to General Ledger by GL Account.

© 2008 -2010 Erin Lawlor

Next: Accounting Structure – Quick Reference>>

**disclaimer: All information posted on this blog is from my own experience and training. The guidelines I present are general and in my experience, standard practice. I do not write with authority from any Accounting Standards Boards.