Recognizing a vacation reserve

In most countries the employees are entitled to a time off that’s to be paid by you as the employer (it’s your liability until you’ve paid what you owe). This “time off” is normally called as a vacation and as mentioned, within the company’s books this is a liability. Accounting for this liability, a reserve […]

Handling supplier invoices

Do you think that supplier invoices are something that can be thrown around and just laying somewhere? Are supplier invoices obsolete once they’re paid? How do you handle them in order to achieve timely payment? First and foremost, keeping accounting documents (that is all documents you’ve used for your accounting entries within your financial statements) […]

Segregation of duties with bank payments

When it comes to bank payments and someone else doing them or you being in control of bank payments in someone else’s company, surely you’d want someone to also review the payments. Bank is an entity holding the company’s funds and as they’re used, the company is giving away its resources – being responsible for […]

Accounting for bonuses to employees

With bonuses to employees it’s important to remember one simple rule – they’re always supposed to be expensed within the reporting period they relate to. I know it’s obvious, but for some reason the mistakes happen often enough to have this explained further. There are questions people struggle with and hence it seems safer to […]

Reversing bonus expense

Not always what you estimate works out the way you initially thought. An estimate in essence is “estimating” or “guessing” what might happen based on the information you have at your disposal at the time you’re making the estimate into your accounts.  (more…)