Thursday, 21 September 2017

What Are The Objectives Of Accounting

Accounting allows you to keep a record of all the financial transactions of a business. Each and every expense incurred by the firm and the income received is recorded in a timely manner with the help of accounting. Accounting is a must for all types of businesses irrespective of their size and niche. The objectives of accounting are explained as follows.

Systematic Record of Statements

The most basic objective of accounting is to maintain all the transaction data that includes all the inflow of money and the various expenses incurred by your business on a day-to-day basis. Maintaining these records manually is a tough job and can lead to several miscalculations. Plus, you may miss out on certain transactions if they are not maintained properly. Thus, accounting saves a lot of time and efforts and ensures that there are no errors in your accounting statements.

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Wednesday, 13 September 2017

How To Improve Your Working Capital

Working capital is the capital used by a business for its day-to-day operations. The formula for working capital is current assets minus current liabilities. This capital has a direct impact on the cash flow as well as on the finances of a company. Being able to effectively manage the working capital can ensure that it meets the business obligations as well as avoids bankruptcy. Hence, follow these ways on how to provide working capital efficiency and manage it as per your business requirements.

Reduce Expenses

Review your fixed and variable costs to determine if there are areas to reduce your expenses. For instance, office supplies, equipment, and technology represent expenses that could be reduced by negotiating with the new suppliers. Thus, by reducing these expenses, you will have more cash available to you for your daily operations.

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Wednesday, 6 September 2017

Why You Need To Prepare A Cost Sheet For Your Business

A report of all the costs associated with the production, administrative, financing, selling and distribution of a product is called as cost sheet. Preparation of a cost sheet is done to calculate the margin or profit of a product. Also, it is used as a basis while setting the price of similar products in the future. Cost sheet should be prepared by every business before it starts with the operations. The importance of cost sheet is explained as follows.

Determining Selling Price

Cost sheet helps in fixing the selling price of a product or service. It is essential to prepare a cost sheet for determining the individual costs which lead to determining the cost of the product or service. Once you know your total cost, add the margin or the profit percentage to the total cost in order to arrive at the selling price.

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Wednesday, 30 August 2017

How To Fix Accounting Errors

When an error is discovered in the auditing process, it should be corrected immediately to prevent the proceeding of wrong data as it results in unreliable financial statements. Mistakes due to the error in calculations, etc. require immediate corrections. But how you correct it, depends on the type of error and whether or not the error can be counterbalanced.

Accounting errors can have an impact on the financial aspect of working capital, cash flow, tax and so forth for your business. However, these accounting errors are not counted as frauds. Errors happen unintentionally, whereas accounting frauds are deliberate. There are numerous reasons behind these errors. We have listed a few common accounting errors and how you can make a correction of errors in accounting.

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Wednesday, 23 August 2017

How To Conduct An Audit Of Financial Statements

An accounting audit is a process of examining a company's financial position. It also places emphasis on ensuring compliance with relevant reporting standards, cash handling policies, and internal controls. Accounting audit is an effective way to understand the financial health of a company. It also plays a vital role in creating and maintaining investor’s confidence and unlocking the valuable insights of business. Here’s how you perform a basic accounting audit.

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Thursday, 17 August 2017

Four Tips For Managing Accounts Payable And Receivable

Accounts receivable and accounts payable are the two main factors that affect your business cash flows. Managing both is an important skill that needs to be mastered for an effective financial stability. It also helps boost the overall performance of the company and avoid cash problems. Properly tracking accounts receivable and payable involve the creation of invoice on time, delivering the receipts, tracking the shipping orders and maintaining financial transactions. Here are a few tips that will help you in managing accounts payable and receivable in an effective and efficient manner.

1. Organize Your Transactions

Be organized and send out invoices immediately after the transaction has been completed. For a regular delivery of goods or when goods are taken on credit, send the invoices when they are due. It may be difficult to remember all the transactions for which payments are expected in future. Hence, make sure you keep a proper record system and organize all your transactions. See to it that your accountant effectively organizes all your transactions as your books contain valuable information and prevent you from forgetting or making incorrect invoices.

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Wednesday, 26 July 2017

Difference Between Assets And Liabilities

Do you find it difficult to formulate your balance sheet? Do you get confused between what are assets and liabilities? Is it that you always tend to classify your assets and liabilities in the wrong manner? Although assets and liabilities seem easy to classify, they can be quite confusing once you actually start recording them in your books of account. This article will help you in classifying your assets and liabilities and so, you will be able to manage your balance sheet in a much more efficient way. Listed below are the differences between assets and liabilities.

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