We talk a lot about depreciation, however, as the situation may be, there are assets which don’t depreciate at all. Those are assets that you can technically use for as long as they exist and their value for your business wouldn’t change (unless their market value changes, which is another matter). (more…)
Recognizing payables to suppliers is crucial in ones’ business. It’s about understanding what you owe to someone else and trust me when I say that they will remind you of it. Regardless however it’s never a good sign if they have to remind you of the payment due and it doesn’t show in good light, […]
Buying inventory items, i.e. goods to be resold, materials to be produced and manufactored into sellable goods is something businesses do every day. They buy what’s needed to keep the business running and keep track on stock in hand. The accounting entries one normally does for when acquiring inventory items is as follows (note here […]
Purchasing things for your company (i.e. materials, supplies or services) creates two types of entries within your company’s accounting – a reflection of what was bought (e.g. you increase your inventories or expenses) and a reflection of what you used to make the purchase. That is, you’re either going to pay for it later and […]
When we discuss payment terms and managing cash flows we are faced to deal with the needs of our customers. I have had experience with companies who say that their customers ask for 6 month payment terms. 6 months! Imagine trying to accommodate your own business within the same cash supply timeframe and producing, paying […]
Once the measurable amounts are determined and have been agreed with the team, it’s one thing to know them and understand them, but another to ensure that they are met and correctly measured. Routines confirming the measurable amounts, time spent on certain activities is as essential as merely identifying and agreeing on something. (more…)