Liquidity Ratios

Liquidity Ratios

Liquidity ratios are a group of ratios used to measure the ability of a business operation to meets its current obligations.   Liquidity ratios are similar to the initial medical tests a patient receives at a doctor’s visit.   Doctors take blood pressure, temperature, and pulse rate.   The doctor wants assurance that the primary indicators of health are good.  Liquidity ratios are exactly the same.  The user wants to know that the basic measurements of a business indicate good health today.

Contractor’s Chart of Accounts – Completed Contract or Percentage of Completion Method

Contractor's Chart of Accounts

The  contractor's chart of accounts is significantly different than the traditional chart of accounts.  First off, the layout is more dependent on the balance sheet than the income statement (profit and loss) accounts.   Furthermore, the income statement accounts are laid out to present a resource based costing presentation than a job costing format.   To add another layer of complexity, the chart of accounts is somewhat oriented to the method of accounting selected by the contractor.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
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Class Accounting With QuickBooks

Class Accounting

Class accounting is one of the options available with QuickBooks software.   Most accountants and bookkeepers misunderstand its purpose and how to properly implement this wonder tool of accounting.   If you are considering using class accounting and want to have a full comprehensive understanding, this is the article for you. 

Insolvency – Detection

Insolvency

Insolvency refers to the ability to pay bills in a timely manner.  It does not mean bankruptcy but long-term insolvency is a underlying factor of bankruptcy.  Many owners and/or managers of small business have no idea of how to determine if the company is insolvent or headed towards the inability to meet their day to day obligations.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
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Subcontractor Documentation

Subcontractor Documentation

Similar to documentation required for hiring an employee, companies must acquire certain documentation from their subcontractors.   Without this documentation, most likely the hiring business entity will face stiff penalties and expose their company to unnecessary risk.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
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Cost of Services Rendered

Cost of Services Rendered

Service based operations do not use the traditional retail based format for the profit and loss statement which utilizes a 'Cost of Goods Sold' section, instead the service industry uses a 'Cost of Services Rendered' segment.   The presentation format is very similar though.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
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