Tag Archives: accounting

Business Owners Benefit When the Numbers Become Their Friend

Posted on by

By Finance New Mexico

Entrepreneurs don’t need to be certified public accountants to start or operate a business, but a basic grasp of bookkeeping principles can help them accurately gauge performance and profitability, keep track of cash flow and make smart decisions about assuming debt or prioritizing payments to creditors based on what the financial reports say.

Though “bean counting” is perceived by some business owners as a time-consuming nuisance, a good accounting system is actually a tool that allows the owner to trace every dollar the business receives from a customer and to monitor dollars owed.When someone pays for a product at the point of sale, the transaction is applied to the appropriate account, where related expenses can be applied to indicate gross profit. When a client is billed on a monthly or quarterly basis, the accounting system can oversee payments to a different account and alert the business when payments are missed so steps can be taken to collect on aging invoices. Continue reading →

Depreciation Prevents Expense Spikes That Can Unsettle Investors

Posted on by

 

Jimmy Pendergrass

Jimmy D. Pendergrass, CPA, Partner, Accounting & Consulting Group LLC

The Internal Revenue Service stipulates that businesses must capitalize expenditures for big-ticket items and recover that cost over several years – a practice known as depreciation – to avoid dramatic changes in the financial statements of a business from one year to the next. Knowing when to depreciate and when to claim a special one-time expense deduction is critical for entrepreneurs.

Continue reading →

Budgets Matter to Business

Posted on by

 

Bobbi Hayes

R.A. Bobbi Hayes, CPA, CITP, CFE, CFF, CCIFP, Partner, Accounting & Consulting Group LLP

Business owners striving to make it through the tough economy need to know how cash flows in and out of their business. A good place to start is with a budget – a basic tool used to forecast when cash will be collected and when expenses must be paid.

Many owners of small and midsize businesses don’t take the time to create a budget, or they neglect to update the one they have. In this slow economic recovery, every dollar is precious and it’s more important than ever to know where money is going. Financial institutions also want to know; banks are beginning to require that borrowers include a budget with their loan requests.

Since a business budget is such a valuable tool, understanding how to create a good one is vital to obtaining successful results and improving a business’s chance of survival.

Continue reading →