Tag: Cash Flow
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Cash Flow From Operations – Understanding Cash Flow (Part II)
To understand the cash situation, the cash flow from operations is an additional report included in financial statements to basically convert the accrual basis balance sheet and income statement into a cash basis report.
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Cash Flow From Operations – Basic Formula
In a pure cash only operation, the profit as reported on the income statement would also be cash flow from operations. But modern-day business is not pure in how it is conducted. Companies agree to pay suppliers at a later time, payroll is weekly or monthly, benefits that are paid in the future are offered to…
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Gathering Data from Sales
In business the best source of new business is the existing customer. Discovering the customer’s habits and characteristics allows the sales department to expand into new geographical territories with similar customer characteristics and/or modify the existing product lines. The key to success is gathering the proper information at the point of sale.
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Cash Flow – Introduction
Insolvency is defined as the inability to pay liabilities as they come due. To meet the demand of creditors cash is required. For most small businesses there are as little as a single source to multiple sources of cash.
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Financial Statements for the Small Business
Financial statements serve the purpose of presenting economic activity and status related to a particular date and over a particular time frame. Accountants record monetary transactions and via financial reports present the information in an easy to understand format.
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Accounting
Accounting refers to the business function of recording economic activity. Accounting includes the processing of information and a reporting role. The accounting term encompasses a broad range of functions for every business. It starts out with a system of gathering economic information, categorizing the material, inputting the data into an accounting program, and generating outputs for decision…
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Bank Reconciliations – Fundamentals
The bank reconciliation is a daily accounting function for every small business. In order to fully appreciate its value, the small business owner needs to understand the fundamentals of how bank reconciliations are performed. In addition, there are some higher level types of transactions that affect the cash position.
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Inventory – How to Finance
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.
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The Different Types of Bank Loans
There are many different types of bank loans, each having their own respective purpose. All bank loans are categorized into two distinct groupings.
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What is Accrual Accounting?
Accrual accounting is the preferred method of accounting for all business operations. Any publicly traded company must comply with the principles of accrual accounting. Small business operations can choose between cash and accrual accounting for their records. Although cash accounting is the easiest to work with as a small business operation, accrual accounting will provide a more…