Tag: accounting

Cash Basis vs Accrual Basis Accounting

Believe it or not, we deal with this issue of whether to use cash basis vs accrual basis accounting all the time. Many companies start from scratch with one person doing the accounting from home or a small office. Over time, their needs grow. It’s normal to see changes within the organization, especially when companies

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You Can’t Afford Not to Spend Money on the Accounting Department

As a former CEO to some CEOs, this Blog is to my counterparts that “don’t know what you don’t know.”  I have seen time and time again closely held businesses that have experienced growth make the same mistakes over and over again. To the CEO that believes bookkeeping is a necessary fixed cost that should be

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What is GAAP?

What is GAAP? GAAP stands for Generally Accepted Accounting Principles. It is the set of rules and guidelines for U.S. companies to follow. GAAP regulates financial reporting for public companies, private businesses, non-profits, and government authorities. This means that GAAP outlines the procedures to make sure that businesses are recording their financials in the same

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Continuous Accounting: The New Age of Accounting

See Also: Reducing Your Cash Conversion Cycle Key Performance Indicators (KPI’s) Accounting Principles 1, 2, and 3 Accounting Principles 5, 6, and 7 Continuous Accounting: The New Age of Accounting Continuous Accounting is the new age of accounting. It provides a more efficient way to review financial performance in a real-time automated process, and a trustworthy, repeatable accounting cycle

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Case Study: Pricing for Profit

Several years ago, I was consulting with a client in the staffing industry that was having a profitability problem: We have happy customers and seem to be doing well, but we just aren’t making more money… Sound familiar? After visiting with the frustrated owner of the business, I visited various departments to understand the people and

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Debit versus Credit

Debit Versus Credit Since the late 13th century, people have discussed debit versus credit. Double entry accounting was conceived centuries ago. Now, it is an international standard to record all business transactions with a debit and a credit. This double entry keeps the accounting equation balanced. It also ensures that one account is not left

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Debit vs Credit

See Also: Debits and Credits Double Entry Bookkeeping Debits vs Credits in Accounting When people discuss debit vs credit, they are usually referring to double entry accounting. More specifically, a debit and credit are recorded for each transaction. These two are required for each transaction in order to keep the accounting equation in balance. There

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Fiscal vs Monetary Policy

Fiscal vs Monetary Policy Explanation H1 What is Fiscal Policy? H2 Fiscal policy is essentially how the government decides to collect and spend money to impact the economy. This is studied in Macroeconomics to better understand the relationship between the economy and governmental influence. The study of fiscal policy is useful in speculating the reaction

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Cash Accounting vs Accrual Accounting

See Also:Accrual Based AccountingGenerally Accepted Accounting Principles (GAAP) There are two different types of accounting that businesses use: cash accounting vs accrual accounting. Most businesses use accrual accounting, but it varies by the type of business. These two methods are both legal and accepted by the Internal Revenue Service. The primary difference between the two is when

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Cost Control vs Cost Reduction

There is a difference between cost control vs cost reduction. Most people think that controlling costs and reducing costs are one and the same when, in fact, they can generate two totally different outcomes. The first thing you need to know is that you can’t grow a company by cost reduction alone. You can get

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Operating Cycle Definition

Operating Cycle Definition The Operating cycle definition establishes how many days it takes to turn purchases of inventory into cash receipts from its eventual sale. It is also known as cash operating cycle, cash conversion cycle, or asset conversion cycle. Operating cycle has three components of payable turnover days, Inventory Turnover days and Accounts Receivable

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