Bookkeeping

The overarching objective of calculating the contribution margin is to figure out how to improve operating efficiency by lowering each product’s variable costs, which collectively contributes to higher profitability. To calculate the contribution margin, we must deduct the variable cost per unit from the price per unit. It represents the incremental money generated for each […]

In effect, the process can be more difficult in comparison to a quick calculation of gross profit and the gross margin using the income statement, yet is worthwhile in terms of deriving product-level insights. If the CM margin is too low, the current price point may need to be reconsidered. In such cases, the price

Your bookkeeper should be able to confirm they have security essentials in place. This might be why, on average, business owners who hire bookkeepers see a 16% increase in profits. There’s a variety of methods you can use to figure out how much to budget for taxes, but they depend on you knowing your average

This includes everything from major fraud and theft to accounting miscalculations, insufficient funds, and incomplete or duplicated payments. An NSF (not sufficient funds) check is a check that has not been honored by the bank due to insufficient funds in the entity’s bank accounts. This means that the check amount has not been deposited in

Working capital as a ratio is meaningful when compared alongside activity ratios, the operating cycle, and the cash conversion cycle over time and against a company’s peers. In our example, if the retailer purchased the inventory on credit with 30-day terms, it had to put up the cash 33 days before it was collected. Since

Accrual-based accounting is a popular method for big companies, as it uses the double-entry accounting method, which is more accurate and conforms with the generally accepted accounting principles (GAAP). Imagine your small furniture company delivers a full bedroom set worth $6,000 to a client on March 1st, but you set the invoice due date as

Investors use BVPS to gauge whether a stock price is undervalued by comparing it to the firm’s market value per share. Book value refers to a firm’s net asset value (NAV) or its total assets minus its total liabilities. For example, Walmart’s January 31, 2012 balance sheet indicates that shareholders’ equity has a value of

This is why many companies look into DIY accounting systems such as QuickBooks or Xero. Having a skilled eye on your finances at all times will give you peace of mind, as well as the ability to make well-informed financial decisions. Like with a controller, whether or not you’ll need a full accounting service depends

By using the variance, you can identify cases in which it can make sense to look for a different supplier, or to start pricing negotiations with an existing one. The variance can also indicate areas on which to focus when you want to reduce costs. Direct Labor Rate Variance is the measure of difference between

QuickBooks, a leading accounting software, stands as a crucial tool in this endeavor. Its advantage lies in its ability to streamline and enhance the account reconciliation process, thereby contributing to the overall financial health of an organization. Let’s delve into the specific advantages that QuickBooks brings to the table. Accessing the reconcile window in QuickBooks Desktop is the initial step in the reconciliation process, enabling