Recent Articles

Accounts Receivable

Cash owed to the business from customers. Credit is extended by the owner to entice the sale of the product or service provided. Customers typically have 30 days to pay the amount due. Some customers are extended additional time to pay based on their history etc.

Receivables Turnover Ratio


One of the activity ratios in business is the receivables turnover ratio or rate.   This ratio measures the frequency of collecting the entire balance of accounts receivable during a standard accounting year.   The ideal turns rate is twelve [...]

Working Capital Management – Production and Sales Flow


There is no single management style to address the multitude of working capital cycles existing in the various business sectors and the underlying industries.   Taking raw resources and turning them into consumer goods has different time frames [...]

Bookkeeping – Controlling Cash (Lesson 48)


In small business, cash is almost always the number one issue.  There is simply never enough.  This is primarily attributable to growth.  Growth requires both physical assets to produce more and expansion of accounts receivable.  Technically [...]

Bookkeeping – Tracking Cash (Lesson 46)


Of all the assets in business cash is the most valuable and coveted.   Keeping track of how much is available and where it goes is the responsibility of the bookkeeper.   Often owners have no idea of how much they really have nor how much of the [...]

Bookkeeping – Cash or Accrual (Lesson 25)


Generally Accepted Accounting Principles (GAAP) advocates using the accrual basis of accounting over cash basis.   The difference between the two methods is important to understand as a bookkeeper. In general, cash basis focuses on the bank [...]

Business Dynamics of Hauling


One of the industries in the transportation sector is materials hauling.  This is your dump truck industry.  All of us see these trucks out on the highway usually hauling gravel or dirt.  To profit well, efficiency is the primary business [...]

Control Accounts in Accounting


Accounting uses accounts to sum up activity related to a particular function of business.  As an example the bank account has a register which identifies the activity in a ledger format of what transpires at the bank for this particular account.  [...]

An Explanation of Current Assets


The asset side of the balance sheet is divided into 3 major sections.  They include current assets, fixed assets, and other assets.  Current assets carry the most value to the small business entrepreneur because of the cash conversion aspect.  [...]

Create a File Structure for Accounting


Creating a file structure for accounting is critical for the overall success of the business.  If properly structured, data retrieval and information access add to the overall value of the company.  This article teaches the new business owner how [...]
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