ACCOUNTS: Business activities cause increases and decreases in your assets, liabilities and equity. Your accounting system records these activities in accounts. A number of accounts are needed to summarize the increases and decreases in each asset, liability and owner’s equity account on the balance Sheet and of each revenue and expense that appears on the income Statement. You can have a few accounts or hundreds, depending on the kind of detailed information you need to run your business.
A business owner should work on high priority task first if not he or she can never be successful. He or she should delegate routine tasks such as answering phone, email, opening mail, bookkeeping, stuffing envelopes, errands like bank drop etc,. These tasks are low value and will kill productivity.
Once you know the ratio, compare it for parallels with the other companies in the industries and for the market as a whole. Never forget, stocks with a very high p/e ratio can fall dramatically when even the littlest thing goes sour.
We all know that customers that don’t pay are simply taking money from your pocket and putting it into their own bank account. The best is to have no credit policy, and even collect cash in advance.
A cash flow examples helps keep you aware of how much cash came and went for any period of time. A cash flow projection would be an educated guess at what the cash flow situation will be for the future.
Good accountants and bookkeepers want you to learn the lingo. They want to help you make the bling, baby! So, read and learn. Keep this glossary handy as you work with your professional money managers. Use it to begin your journey to financial literacy!
This is a good number to scrutinize each month, and to track in terms of percentage to total sales over the course of time. The higher the better with gross margin! You need to have enough money left at this point to pay all your indirect costs and still end up with a profit.
Always use a contract between you and the contractor that has a hard date that the job must be complete. This must include a per diem penalty for everyday that the job is not done. This penalty amount will be subtracted from what you owe the contractor at pay day.