Accounting

How To Do a Budget Analysis for Your Business

Like it or not, budgeting is one of the most crucial aspects of running a successful business of any size. Your monthly budget—and the in-depth analysis it entails—gives you all the information you need about the money your business brings in and where it’s going. Tracking your cash flow is especially important if you have […]

How to Calculate Accounts Receivable Turnover Ratio: What’s a Good Ratio?

If your company operates in the retail industry or provides a product or service, you’ll need to know how effective your collections efforts are during the year. There is a method for determining this information: your accounts receivable turnover ratio. It may sound complicated, but calculating this ratio is pretty simple. This is something every […]

Accounts Payable Management and Profitability Impact

Accounts Payable (AP) is an essential resource for businesses in the management of payable obligations. Usually, AP refers to the amount a specific party owes to a given supplier or vendor. To elaborate, once the client places an order and receives it before releasing finances, they should record the liability amount in a record book. […]

How to Fill Out an Accounts Receivable Aging Schedule

Proper account receivables management is among the key secrets to a thriving business. It helps the management identify and fix potential cash flow problems, conversely facilitating smooth-sailing operations. An excellent way to stay on top of account receivables is through an aging schedule. From what it is to why it’s of the essence, below is […]

Cash Budget vs. Statement of Cash Flows

As a business owner, managing cash is a tedious but necessary part of the job. Keeping a hold of your cash flow is critical for a thriving, successful business, but it’s not always the simplest task or the easiest to understand. Two terms often thrown around in the realm of business management are ‘cash budget’ […]

How to Choose the Right AR Management Solution

Behind every thriving company is an efficient accounts receivable game plan. It’s easy to get lost in the pile when it comes to tracking invoices and remembering how much money your customers owe you after providing them with a product or service. If you don’t keep a close eye on this aspect of your business […]

How to Calculate the Cash Conversion Cycle

When you’re running a small business, you must know several formulas to keep expenses low and maintain high-profit margins. Other formulas present business owners opportunities to know how fast their inventory is selling and tracking cash flow, called the cash conversion cycle (CCC). It’s also known as the net operating cycle. Read on to find […]

Cash Flow Analysis Techniques and Tips

Running a small business is no easy feat, but running a successful small business takes even more time and skill. Performing a cash flow analysis and looking at your expenses can be the difference between your business floating or sinking. Knowing the financial health of your company helps you identify what you’re doing right and […]

The Importance of Cash Management to Small Business Success and Tips to Do It Effectively

Keeping cash flowing is a business’s key to success. Sadly, companies that do not manage their cash smartly tend to fail quickly. Along with making a profit, keeping the cash flowing is vitally important, especially for small businesses that are getting started. Young businesses often suffer from cash flow problems, and they need that money […]

How to Record Invoice Factoring Transactions

In business factoring, companies they sell them to a factoring company. This type of financial transaction helps a business reduce its credit risk. Businesses also factor invoices if they need immediate cash. When businesses factor their invoices, they usually sell them at a discounted price. Because the process involves several steps, recording invoice factoring transactions […]

What Is the Cash Ratio and How Is It Used?

The cash ratio, also known as the cash asset ratio, is a liquidity measurement used by financial analysts. Its purpose is to evaluate a company’s capability to pay off any short-term debts. This capability is determined by calculating the ratio of the short-term assets against a company’s short-term liabilities. There are two other common ratios: […]

What Is Net Working Capital? How to Calculate and NWC Formula?

Net working capital (NWC) is an organization’s total short-term assets minus its short-term liabilities. An organization’s net working capital paints a picture of its overall financial health and its being run efficiently. There are a number of ways to calculate net working capital depending on what the person analyzing the data is looking for. This […]

How to Create a Business Cash Flow Statement

What exactly is a cash flow statement? Before you can make one, it is essential to understand the definition of what a cash flow is. Cash flow is a company’s ability to generate revenue and the operational turnover of a business. The cash flow statement is part of the trifecta of financial statements that are […]

How to Complete a Break-Even Analysis

Your business is running; you’re making sales; inventory is turning over, but are you making a profit? There are many costs involved in running a business, from salaries to rent to insurance to payroll, and even more so in the early days of a new company when the investments typically surpass the initial sales. It […]

What Is the Current Ratio?

The current ratio is an essential metric that small business owners, in particular, should keep a close eye on for their own company. It is also necessary for an investor to understand the current ratio in multiple companies when purchasing stock. What Is the Current Ratio? The current ratio is a commonly used metric in […]

Debt-to-Equity Ratio: Calculation and Measurement

When it comes to figuring your ability to secure funding for your business, you need to have a clear idea of your financial situation. There are many ways to do this. You must start by gathering all your financial data. You can then use several formulas to assess your current standings. One of those formulas […]

What is COD?

When you start a new business, one of the first tasks you have to learn is sales invoicing, and, in particular, transaction types. Choosing the right transaction for your business helps you get paid on time and avoid delays in cash flow. One example of a commonly used transaction is COD or cash on delivery. […]

Best Accounting Software for Small Businesses

As a small business, keeping up with finances can be a nightmare, especially as the business grows and things get more complicated. Not all of us were born with a love of numbers, and cash flow management is tough! Maybe you started a successful business with little understanding of balance sheets, invoicing or payroll management. […]