Why You Should Outsource Your Accounting and Administrative Work
A lot of small businesses hire people to handle their payroll and other administrative tasks. I don't think it's a good idea. Most companies that do this think of themselves...
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Insights, tips, and updates from our accounting experts.
How to Strategize an Accounting and Bookkeeping System for Your Small Business
Strategizing an accounting and bookkeeping system for your small business requires a different approach than setting up one for personal use. The complexity of the project, the limited amount of...
Pay Based on Performance
Pay for performance is a natural for startups because it's hard to define people's roles when the company is small. Some people will end up doing different jobs every week....
The Ultimate Guide to Accounts Payable
Linking accounts payable to purchasing is a significant step in creating an accurate, reliable and efficient accounts payable process. Although the accounting journal entry to record the expense of an...
Keep the Right Information Moving in the Right Direction
An implication of the flow principle is that you are always better off moving information in the direction of your net flow, even when that means reversing the direction of...
Why a Credit in Journal Entry Recorded in One Account Has to Be Offset by a Debit in Another Account.
A credit in one account has to be offset by a debit in another account. A double-entry bookkeeping system is a set of rules for keeping track of debits and...
How Reserves Allow Firms to Avoid Drawing Down on their Own Capital
We set up our accounting system to match the way we like to think about financial capital. We like to think of capital as a big stockpile, something that firms...
How Monthly Closing Work in Quickbooks
We have a general ledger account called "Accounts Payable." This account holds all the money we owe to vendors who have not yet been paid. Our accountant likes to see...
Different ledger accounts and their purposes
A common way to set up a ledger is to have different accounts, each with its own balance. Typical accounts are Cash, Accounts Receivable, Inventory, Prepaid Expenses, Accounts Payable, and...
Pay yourself before anyone else gets the money
So here is the rule: pay yourself before anyone else gets the money. And what does that mean? Well, if you are self-employed, it means putting aside some of what...