Incentives (i.e. bonuses based on personal results, company’s performance etc.) aren’t things to be afraid of. Yes, they create expense within accounts; they’re an additional routine to maintain and so on, but what they actually do, if set up properly, is motivating people more. Continue reading
Author Archives: Karl
Definition of an intangible asset
An intangible asset is, to put it simple, an asset without physical substance. You cannot touch it. An intangible asset is something you only recognize within your accounts if your company can control the asset and you can determine the cost reliably. Continue reading
Non-current assets and their treatment
To define the term ‘non-current assets’ requires that we address the concept of liquidity. An asset is liquid if it can be realized within a short period of time and with ease without losing any of its value (normally assumed within a year). Liquid assets comprise your company’s ‘current assets’. However if an asset is not as liquid due to its nature and its use for your company, it’s treated as a ‘non-current asset’ on your company’s balance sheet. Continue reading
Recognizing supplier payables when there’s no invoice just yet
As it happens, not always there’s an invoice for inventory purchase, but since you received the materials, you’re more than likely to require using them already. So how you’d proceed? Continue reading
Recognizing paying to suppliers
Recognizing supplier payables is one thing; it’s another to pay those payables however. We’ll discuss separately all the routines governing the handling and an appropriate approach when it comes to supplier invoices (i.e. how you ensure that you’re paying for the right service or material, in the right price and in due time), as it is, with this we want to give you an overview of which accounting entry you make within your books when you’re paying to your suppliers. Continue reading
Recognizing purchase of materials
Making purchases is part of everyday business. You cannot cooperate without buying certain services or materials (unless you’re actually producing materials and finished products from them yourself and don’t require any outside service, i.e. internet, paper to print invoices on etc.). So as such you need to familiarize yourself with recognizing accounting for such payables and moreover, for the corresponding entry. Continue reading
Sales prices
Your sales prices are values you consider sufficient for a product or for a service to cover expenses made directly for the sellable unit and to also cover for those general expenses not related to production or providing the service (your company’s administrative, marketing and other expenses). Continue reading