How do you get paid for goods or services? Accounts receivable is the short answer. Here’s your introduction to one of the most important functions in a business.
What is accounts receivable?
Accounts receivable is the money you’re owed by customers. Once you send an invoice (or bill), it becomes part of your accounts receivable – until it’s paid.
Accounts receivable is the name given to both the money that’s owed, and the process of collecting it. So the accounts receivable process includes things like sending invoices, watching to see if they’ve been paid, taking steps to chase payment, and matching payments to invoices (also known as invoice reconcilia...
The garage-to-glory stories of social media big names aren’t foreign to most. Perhaps less enthused about though, are the actual gears behind these tech behemoths.
What keeps these multi-billion dollar businesses running and thriving despite seemingly taking little from the end user’s wallet? How do they permeate both our work and personal lives while generating revenue almost imperceptibly? (Key word: almost)
With all the hubbub on the state of Pinterest’s IPO earlier this year, while Facebook was slapped with its biggest fine yet, we examine the social media business models behind a few of the biggest names today.
The first few years for any new business are crucial to its long-term success, with many challenges to overcome and lessons to be learned.
Cashflow problems and mismanaged finances are major causes of business failure in the early years. Some companies fail to plan properly, some set their sights too high or low, some don't keep track of costs, some fail to chase payment.
You can maximize your chances of business success by being aware of the pitfalls. Then you can manage your company's finances carefully and keep a close eye on its cashflow.
Taking sensible, practical steps will help you control spending and grow your business wit...
Making sure you have the right quantity of product in stock to meet demand can take a fair bit of number-crunching and forward planning. You need to allow for seasonal changes. You also need to account for new spending trends.
Use this 14-step list as your guide for improving the way you manage inventory.
Start with these steps.
Look at your historical annual customer order numbers. Break down the figures into daily, monthly and quarterly volumes to help you identify the peaks and troughs of customer demand. Will you, for example, need extra stock in early December to meet Christmas demand? ...
Depreciation is what happens when a business asset loses value over time. A work computer, for example, gradually depreciates from its original purchase price down to zero as it moves through its productive life.
There are techniques for measuring the declining value of those assets and showing it in your business’s books. This area of accounting can get complex so it’s a good idea to work with a professional.
Purpose of depreciation
Depreciation accounting helps you understand the true cost of doing business (because wear and tear is an expense) and estimate the value of your business.
A business bank account is an essential requirement for any business. But with so many banking providers out there, how do you know which business account to choose?
The key is to know what you require from a bank account, and to choose a bank that understands the banking, financial and funding needs of your business.
Choosing an account that fits your business needs
Whether you’re a new sole trader or an established limited company, it’s advisable to maintain a clear divide between your personal and business money. So it’s vital to open a business bank account, giving you a separate account to handle your business transactions.