Category Archives: 1 Basic Accounting

Lease agreement with minimum payments close to or exceeding assets value

When considering whether a lease is a finance lease or an operating lease, there’s one condition that’s often enough ignored. People mostly focus on either the option to buy the asset with very low value or the actual transfer of ownership at the end of the term which is considered a definite ‘yes’ for considering the lease as a finance lease (that is the asset and the respective liability are recognized on the balance sheet as opposed to just showing the rental charges as period’s expense.  Continue reading →

Property, plant and equipment that’s not in use

First and foremost it’s important you go about and actually investigate into your property, plant and equipment items to identify all assets which don’t find any usage within your business, your production. Often enough I see that it’s not done and assets are carried on the balance sheet even if they’re fully depreciated and in reality not existing. There’s just clutter on your balance sheet that you should get rid of.  Continue reading →

Work by the piece

Administrating your payroll in a way that you pay for each piece produced (that is you pay to your workers say 1 CU for each item that they’ve produced during the period they get paid for, i.e. a week if you apply a weekly wage) means first off that you have people doing manual labor, that is, you have employees who produce goods. There’s nothing wrong with that, but more of stating the fact here.  Continue reading →

Consider requirements on storing and movement imposed on types of goods

Certain types of goods require certain and sometimes strict storing requirements. I would assume that you’d already be knowledgeable of this when you started in your business, however it doesn’t hurt to repeat here some of the considerations. Not just that, but there are also types of goods that require to be transported by only certain means (certified carriers for fuels and so on) and only by defined types of carriers (consider this for say gas for instance, something with high temperature etc.)  Continue reading →

Stock levels in general for optimization

In your everyday business, in your everyday production you no doubt understand the need for certain levels of stock. You’ve got your orders coming in and as they come, you can see what you need more often and what’s left standing for a longer period than you’d expect. Those moving positions are what you need to keep up and make sure your positions meet the demand.   Continue reading →