Recent Articles

Cash

Cash includes petty cash, till box cash, cash in bank accounts, and the checks pending for deposit. For the small business owner, cash is critical to successful operation of the business. It is the blood in the business that allows it to breath and continue operations. It is important for the owner to understand cash management.

Bookkeeping – Bank Reconciliations (Lesson 47)

03/03/2017

An essential task of bookkeeping is making sure the ledger accounts for cash reconcile to the bank.   Your average person believes that this is a monthly task.    Well in the private world, this may be true.   But in small business, this is a [...]

Bookkeeping – Cash Disbursements (Lesson 45)

02/20/2017

Cash disbursements is the process of remitting payment to vendors, suppliers and third party contractual obligations.   Better managed offices pay bills in regular cycles including weekly and monthly obligations.   Preparation, reconciliation and [...]

Using Cash in Construction

11/19/2015

There is a notion in business that using cash to pay for materials or service is illegal.  IT IS NOT ILLEGAL TO PAY FOR MATERIALS OR SERVICE WITH CASH.  It is illegal to do this if you do not properly document the transaction.  This is especially [...]

Working Capital

10/20/2015

Cash is the lifeblood of every business. Without cash a business operation can come to a standstill. Cash is one component of working capital, a term referring to current assets (Gross Working Capital) less payables and accrued expenses. The term [...]

Insolvency and Bankruptcy – Know the Difference

02/01/2014

Every business owner needs to know the difference between insolvency and bankruptcy.  Often these two terms are misunderstood and improperly used in conversation.  You need to know their correct meaning because both are used in civil law and both [...]

Quick Ratio – Definition, Explanation and Proper Use

01/14/2014

The quick ratio is a formula used in business to identify the ability of a business to pay its current liabilities.  It is also known as the ‘Acid Test’ formula (ratio).  In the large markets this formula is one of the financial industry [...]

Inventory – How to Finance

04/16/2013

In financing a small business, there are a multitude of tools available.  One way to finance inventory is by using the 30 day pay program with your vendors.  Another tool is seasonal payment program and a third tool is exercising a line of credit [...]

Effective Internal Controls for Cash

03/18/2013

All businesses should have internal controls to deter fraud, detect theft, and preserve assets.  Of all the assets, cash is the easiest to misappropriate.  Effective internal controls for cash prevent the proverbial hand in the cookie jar.   So [...]
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