As a business owner, you may have heard the term deferred revenue before. But, what is deferred revenue and what does it mean for your business accounting? Deferred revenue is money that you receive from clients or customers for products or services that you haven’t delivered yet. In accounting, deferred revenue can affect
This article was updated on October 19, 2022 with new links, resources, and templates. Bank reconciliation may sound like a daunting task for a business owner, especially those without an accounting background. As a business owner who already has too many tasks and not enough time, you may overlook or put off this
At some point, you may need to buy equipment, tools, and other assets for your business. Those assets tend to wear out after several years and lose their value. Luckily, businesses can write off those expenses if they know about depreciation and how to calculate it. The straight-line depreciation formula is the simplest
If you’re a small business owner, you know that keeping track of all the moving parts can be challenging. Most small business owners keep track of their profit and loss statement, but the owner’s equity is equally important (and often overlooked). In this guide, we will explain what owner’s equity is and how
In accounting, there are two primary methods—accrual and cash basis. The main difference between accrual vs. cash accounting is in how and when you record income and expenses in your books. Each accounting method has advantages and disadvantages. If you’re not familiar with accrual vs. cash basis accounting, we’ll help you understand what
Receipts play a surprisingly important role in running a business. Whether you track receipts to reimburse employee expenses or to prepare for a possible audit, you should keep track of them with one of these best receipt apps. What is a receipt scanner app? A receipt scanner app takes a photo of your
The process of 3-way matching in accounts payable protects your business against incorrect or fraudulent invoices. It mitigates risks in your company’s spending by making sure you don’t overpay for services or fall for counterfeit invoices. It may sound like no one would fall for invoice fraud—when a scammer pretends to be a
Retained earnings are a key indicator of a company’s financial performance. Read on to learn about what they are, how to calculate them, prepare a retained earnings statement, and more. What is the difference between retained earnings, revenue, net income, and shareholders’ equity? Retained earnings represent the portion of a company’s net income
If you’re managing a business—and your books—you’ve probably had to learn what is accounts payable vs. accounts receivable. Accounts payable and accounts receivable are two different sides of the same coin. In this case, the coin is your business. One tracks money that is going out. The other tracks money coming in. Both
When a small business makes sales on credit, there’s a chance of having bad debt expenses. Most businesses use the bad debt expense formula to account for them. Even the customers with the highest credit record can go bankrupt and fail to pay their debts. Tracking and recording these debts gives you an
As a business owner, you may have heard the term deferred revenue before. But, what is deferred revenue and what does it mean for your business accounting? Deferred revenue is money that you receive from clients or customers for products or services that you haven’t delivered yet. In accounting, deferred revenue can affect
This article was updated on October 19, 2022 with new links, resources, and templates. Bank reconciliation may sound like a daunting task for a business owner, especially those without an accounting background. As a business owner who already has too many tasks and not enough time, you may overlook or put off this
At some point, you may need to buy equipment, tools, and other assets for your business. Those assets tend to wear out after several years and lose their value. Luckily, businesses can write off those expenses if they know about depreciation and how to calculate it. The straight-line depreciation formula is the simplest
If you’re a small business owner, you know that keeping track of all the moving parts can be challenging. Most small business owners keep track of their profit and loss statement, but the owner’s equity is equally important (and often overlooked). In this guide, we will explain what owner’s equity is and how
In accounting, there are two primary methods—accrual and cash basis. The main difference between accrual vs. cash accounting is in how and when you record income and expenses in your books. Each accounting method has advantages and disadvantages. If you’re not familiar with accrual vs. cash basis accounting, we’ll help you understand what
Receipts play a surprisingly important role in running a business. Whether you track receipts to reimburse employee expenses or to prepare for a possible audit, you should keep track of them with one of these best receipt apps. What is a receipt scanner app? A receipt scanner app takes a photo of your
The process of 3-way matching in accounts payable protects your business against incorrect or fraudulent invoices. It mitigates risks in your company’s spending by making sure you don’t overpay for services or fall for counterfeit invoices. It may sound like no one would fall for invoice fraud—when a scammer pretends to be a
Retained earnings are a key indicator of a company’s financial performance. Read on to learn about what they are, how to calculate them, prepare a retained earnings statement, and more. What is the difference between retained earnings, revenue, net income, and shareholders’ equity? Retained earnings represent the portion of a company’s net income
If you’re managing a business—and your books—you’ve probably had to learn what is accounts payable vs. accounts receivable. Accounts payable and accounts receivable are two different sides of the same coin. In this case, the coin is your business. One tracks money that is going out. The other tracks money coming in. Both
When a small business makes sales on credit, there’s a chance of having bad debt expenses. Most businesses use the bad debt expense formula to account for them. Even the customers with the highest credit record can go bankrupt and fail to pay their debts. Tracking and recording these debts gives you an