Category: Bookkeeping

Rates may be calculated based on the face value of the eight steps of the accounting cycle the invoice or the amount of the cash advance. Briefly, factoring with recourse means if your customer fails to pay to the factoring company, you’re obligated to pay the invoice back. Since you’re guaranteeing recovery for the invoice, a recourse liability is determined and recorded. When accounts receivable are non-recourse factoring, the factoring company accepts any loss resulting from non-payment. After your customer’s…

In addition to rental income, a property might also generate revenue from amenities such as parking structures, vending machines, and laundry facilities. Operating expenses include the costs of running and maintaining the building, including insurance premiums, legal fees, utilities, property taxes, repair costs, and janitorial fees. Capital expenditures, such as costs for a new air-conditioning system for the entire building, are not included in the calculation. Operating income helps you understand how well the company is running its core operations,…

Or, if you own a pie shop, your business’s operating revenue comes from selling the pies. When you make a sale or earn money from another activity, you need to record it. That way, you can keep your accounting books updated, organized, and legal. The proposed regulations affect manufacturers, producers, and importers of designated drugs that sell such drugs during certain statutory periods. For example, you invested money into a business and earn interest on it. This depreciation is saved…

Shareholder equity is money attributed to the business owners or shareholders. It is also known as the net assets since it is equal to the total assets minus its liabilities or debt owed to its shareholders. Retained earnings are also noted on the balance sheet, and these are the net earnings that are reinvested into the company or distributed to shareholders as dividends. A balance sheet reports your assets, liabilities, and shareholder equity for a specific period. Even sole proprietors…

Kelly is an SMB Editor specializing in starting and marketing new ventures. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other…

The method you choose will depend on your existing accounting systems, the number of staff you employ (and therefore how big a task payroll is) and your budget. Historically, smaller businesses shunned payroll tools, preferring to run a manual payroll setup. However, even the smallest of businesses will be better off using a payroll system. Designed to combine payroll and pensions, with the flexibility to work with multiple pension providers. By addressing these key areas, you can increase the chances…

EAs are federally authorized to represent taxpayers before the IRS and have unlimited representation rights. This means EAs can represent any taxpayer, whether they prepared their income tax return or not. They can also represent any tax matter, as well as appeal to any office of the IRS. The NAEA is the nation’s leading community for tax practitioners – from aspiring enrolled agents to experts with decades of experience. We are advancing the professional tax practice through leadership, management, community,…

For every asset you have in use, there is an initial cost (aka original basis) and value loss over time (aka accumulated depreciation). Proration reduces the depreciation that you can claim in a given year. Proration considers the accounting period that an asset had depreciated over based on when you bought the asset. For example, imagine Company ABC buys a company vehicle for $10,000 with no salvage value at the end of its life. The company decided it would depreciate…

COGS only includes costs and expenses related to producing or purchasing products for sale or resale such as storage and direct labor costs. Cost of goods sold, or COGS, is the total cost a business has paid out of pocket to sell a product or service. It represents the amount that the business must recover when selling an item to break even before bringing in a profit. Here’s everything you need to know about fixed vs variable costs, with examples…

Talk to businesses in your area to see what they are currently paying for bookkeeping services. Talk to people in your network who are also bookkeepers and ask what they are charging. In doing so, you can get a good idea as to the range bookkeepers charge for services. If you’re considering becoming a bookkeeper, read our guide to learn how to start a bookkeeping business in 2024. You can go with the baseline plan, the Simple Start plan, for…