Bookkeeping

Corporations and business managers also use the payback period to evaluate the relative favorability of potential projects in conjunction with tools like IRR or NPV. The payback period is the length of time it will take to break even on an investment. The payback period is favored when a company is under liquidity constraints because it can show how long it should take to recover the money it's laid out...

Figure 1 presents the potentially dramatic differences in reported income across time periods described in the different scenarios and situations. The contractor has control in both situations, but 4B shows the low-profit-margin work being performed more quickly than the high-profit-margin work. Scenario 4B shows asset protection for the business owner delayed profit recognition compared to Scenario 4A....

If your checkbook doesn't add up properly, you may need to backtrack farther. Starting with the first transaction you enter, subtract the amount from your available balance—in the case of a deposit, add it to the balance. You should be able to find this amount by checking using your online or mobile banking app. Those fees can easily eat into your balance, potentially putting you in the red -- and in...

Wave makes its money through transaction fees on payments processed through its platform and through its payroll services. While it may not have the advanced features or integrations of paid competitors, it provides all the essential tools needed to maintain professional financial records. For those just starting or with very simple accounting needs, Wave offers unbeatable value. Startup founders should...

The higher capitalization of costs under full cost accounting leads to larger long-term asset balances on the balance sheet. This means a company using successful efforts will show higher expenses and lower net income early on compared to an equivalent company using full cost. This comprehensive guide examines the successful efforts and full cost methods side-by-side. We’ll compare and contrast the two...

When you file your taxes, you may either get a tax bill or a tax refund. When you receive a refund, this generally means that you overpaid your taxes throughout the previous year and the government is now reimbursing you for that overpayment. This can happen, for example, when your W-4 isn't optimized, leading your employer to withhold too much from your paycheck. ‍A worksheet that helps calculate...

No matter how you slice it, they're a key metric for your business. They're an indication of how effective your sales strategies are and how well your sales team is performing. Finally, we’ll assume that there were no sales allowances during this period. That is income after all applicable deductions and exemptions have been subtracted. It functions like a normal income tax and means that the top...

Both are numbers-related, but bookkeeping and accounting are not quite the same things. Read more here about which accounting method is right for your startup. Accrual basis accounting counts money when it’s “earned” rather than received (and the same with expenses). If you haven’t landed on an entity type yet, you can read more about choosing the right business entity for your startup here. Your...