Why would someone pay amounts up front? Surely voluntary you wouldn’t give away money before the date of payment has really arrived. Or is it so? Truth of the matter is that prepaying is a normal course of business for some types of expenses and done more often enough. Continue reading
Author Archives: Karl
Dealing with prepayments
Prepaid expenses are sums paid to suppliers that on your own balance sheet accumulate under one or a few balances all containing the word “prepayment” or “prepaid”. It’s to refer that those amounts are to be your future expenses and at this point they’re just amounts of money you’ve already paid to your suppliers. They’re your assets just in different form than money. Continue reading
Composition of the Annual Report
By definition an Annual Report is all about your company’s results, however it’s a structure that’s expected from an Annual Report and not just simple text put together. Technically an Annual Report consists as a minimum of following sections: Continue reading
Paying invoices partially
Generally speaking, partial payments are always allowed unless stated clearly otherwise on the invoice. Now, the question is if and why you’d do it? It totally makes sense to pay invoices in full on time so why would someone pay parts of the total sum on different days?
To pay bills on due time or a bit earlier?
It’s always a good question. First off however, let me clarify that paying your bills after the due date is not a good choice because if it happens once, it’s not a big deal, but in case it’s becoming a habit, it does not send a good message to your suppliers and they may either start demanding prepayments for goods and services or that you pay at the spot. Either way, you do want to be on their good grace so that you get to pay later.
Trade and other payables note in the Annual Report
Note that “trade” payables are expenses that are directly related to business (i.e. materials purchase, services for sales etc.) and everything else is the “other” part of the note – taxes, accrued expenses, employee related payables etc. Continue reading
Retained earnings note in the Annual Report
Retained earnings are yet another equity component that builds up from your earnings for the period and accumulates over time. The only components taken out from retained earnings are dividends. Now, that’s the general content when it comes to retained earnings. Yes, there may be other components that are related to adjustments, changes in policies etc. however we’ll not go into too much detail at this point. Continue reading