Category Archives: 1 Basic Accounting

Bank deposits – accounting for them

Your most liquid asset, money, can be in various forms – physical cash, bank accounts and bank deposits. Even if the deposits have strict rules, i.e. you cannot take the money out until only after the term, it is still “money”. Although, yes, if the “term” is longer than 3 months, it’s accounted as a financial investment rather than “Cash and cash equivalents”.  Continue reading →

Is the investment really worth it?

Buying something is easy, but is it really worth the money spent? Is the investment really a good investment? You should never make an investment that’s really not doing anything useful for your business.

First thing first, think about the purpose of the investment. What do you really needed it for? Is it for improving something, developing something or just in “I think we may find it useful” category?  Continue reading →

Knowing your limits when it comes to available cash

Spending money is an interesting thing – it can help against stress, but then again, it can get you into a lot of trouble. Trouble in the sense that you may find you’ve spent too much and aren’t really able to continue without taking a loan for an example.

As it happens, there’s a difference between spending and spending. Whilst one is an excess spending, i.e. on something you really don’t need, the other is for keeping your business going.  Continue reading →

How long should I keep a provision in my accounts?

You’ve accounted for various provisions; they are all enlisted in your provisions accounts, but are you sure they all should be there? Are they are relevant? Is the situation that arose them still there?

It’s one thing with provisions to have them as needed, but you don’t want them or they’re not needed, it’s just hurting your business.  Continue reading →

Managing provisions – what to look out for?

Having various provisions can cause a problem in itself. It’s not to say that you shouldn’t have numerous provisions though. If the situations demand one then so be it.

However, with just more than one provision you need to first off keep a detailed list of them including information on what’s the essence of each, updated information about due dates, relevance, i.e. if the provision should still be there etc.  Continue reading →

Provisions for “bad” contracts

Sometimes things happen or business happens and things change. As they change, you may discover you’re tied to certain relationships, i.e. agreements, you have no way out other than after their full term. As such, with your situation changing, you discover you no longer benefit from the agreement in your business or more over your business doesn’t benefit from it.  Continue reading →