Category Archives: 2 Processes


Purchasing is an important process within an entity’s business. Effectively you’re purchasing everything you need – your supplies, your services, your employees’ time and so on. When we talk about purchasing, we’re talking about things you’re buying for your company for your business.  Continue reading

Writing down a receivable

Should the event arise that you consider a receivable uncollectable in full or in part, that is you consider that your customer considering the circumstances wont be able to pay what they owe, you either decide to write the receivable down in value to the amount they will be able to pay (that is you’re making an estimate) or off the balance sheet if you’ve determined that they cannot pay you anything.   Continue reading

Revenue and receivables

Revenue and receivables are your primary process when it comes to earning profits, earning resources to spend, to invest.

Something to note is that revenue is just this one stream on your income statement, it’s the stream of your income for the defined period and it arises from the sale of goods or services (whatever your company is in business of doing). There are other streams on your income statement which can be defined as expenses, but we’re not about to discuss those.  Continue reading

Is it an accounting estimate or an accounting principle that’s being changed?

The thing with changes is that whilst they’re allowed under certain circumstances, it’s always the question of whether something really counts for a change in principle or it’s just a change in an estimate. An accounting estimate also results in a change sort of, either an impairment, a new model for calculating an allowance etc. As you’re using new methods for accounting in certain areas, it’s easy to get things mixed between change in an accounting principle and accounting estimate.  Continue reading