Author Archives: Karl

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) for a certain required period can only be achieved if those documents are not just somewhere, but in a safe place. Normally the period you’re required to retain those documents is measured in years so think about that when choosing this place.  Continue reading →

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 this process means that you can also be held liable if something goes wrong, if wrong amounts are paid, if wrong parties are paid to and so on.  Continue reading →

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 recognize the bonuses within the period they are either paid out or when the answers are definite.  Continue reading →

Reporting inventories on statement of cash flows

Reporting your inventories on statement of cash flows is virtually always done under operating activities cash flows. When you think about it, what are operating cash flows in essence? They’re meant to show the flows your business is able to generate from its operations, from its day-to-day activities. So it’s safe to say that inventories are something that fall under this category pretty clearly.  Continue reading →

Restate or recognize in current period?

Question often asked and more than often faced is whether to restate financial statements because of an error or transaction not recognized in its proper period or not to do it. Usually there’s this tendency to restate financial statements and I have to admit, it’s not so much a judgment call but also understanding what exactly is the essence of this restatement.  Continue reading →