It’s one thing if you receive bonuses from your suppliers, but somewhat different if you’re the one paying bonuses. Those are the bonuses you calculate on the bases that you’ve determined with your clients and they’re the ones that decrease your profits at the end. Continue reading
Category Archives: 2 Processes
Treatment for bonuses received
Bonuses you receive are those suppliers pay to you. They may be calculated on various bases, mostly volume, but also from sales of specific products, with determined prices etc. They also may be paid monthly, quarterly or even annually. Continue reading
The basic accounting formula
Accounting is about numbers and since accounts need to balance out, the numbers need to match. How do they much in accounting though?
As you know, accounting is about debits and credits and hence it’s called double entry accounting. You cannot make a debit entry without a credit to support it and vice a versa. As such, both sides, debits and credits need to equal out. Continue reading
Credit invoice from your supplier – treatment
Every now and then it happens that your suppliers make mistakes. They send out wrong invoices for completely wrong goods, right goods but wrong prices etc. Be the reasons what they are, you need to account for the invoice regardless.
Unless your supplier sends the credit invoice right away, at first you’re stuck with the wrong invoice and if you want to start selling the goods or using them at least, you need to account for them. Continue reading
A purchase order in a nutshell
A purchase order or a “PO” in short stands for a process before the purchase transaction itself. It is one thing to make a purchase, but thinking a few steps before the act itself is what the PO is about.
A purchase order is either a procedure in place in your business (or one you can implement) or it’s at least an idea of what you may want to consider before making the transaction. It includes: Continue reading
Making a purchase, what does it mean?
Making a purchase is a process, a flow of activities that need to be done in order to have an accurate transaction in your accounts, all relationships in good shape and the transaction taking place also in reality.
When first making a purchase, depending on the size or procedures in place in your business, there should be something called a purchase order that needs to be considered. In this sense I mean “considered” as implemented or at least the idea and what it imposes should be considered when making the purchase. Continue reading
Accounting for account payables
Account payables are your liabilities you have against your suppliers. As it is apparent from the name, on the balance sheet account payables are shown under liabilities, on the opposite side of your assets.
Generally speaking, an account payable can occur when you’re either buying assets, goods or services. It doesn’t really matter if the goods bought are to be resold or used in your own business (i.e. if they are to be included within your inventory until they are sold or if they are to be expensed right away). Continue reading