Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Depreciation
Depreciation is a term we hear about frequently, but don't really understand. It's an essential component of accounting however. Depreciation is an expense that's recorded at the same time and in the same period as other accounts. Long-term operating assets that are not held for sale in the course of business are called fixed assets. Fixed assets include buildings, machinery, office equipment, vehicles, computers and other equipment. It can also include items such as shelves and cabinets. Depreciation refers to spreading out the cost of a fixed asset over the years of its useful life to a business, instead of charging the entire cost to expense in the year the asset was purchased. That way, each year that the equipment or asset is used bears a share of the total cost. As an example, cars and vans are typically depreciated over a set number of years. The idea is to charge a fraction of the total cost to depreciation expense during each of the five years, rather than just the first year.
Depreciation applies only to fixed assets that you actually buy, not those you rent or lease.
Depreciation is a real expense, but not necessarily a cash outlay expense in the year it's recorded. The cash outlay does actually occur when the fixed asset is acquired, but is recorded over a period of time.
Depreciation is different from other expenses. It is deducted from sales revenue to determine profit, but the depreciation expense recorded in a reporting period doesn't require any true cash outlay during that period. Depreciation expense is that portion of the total cost of a business's fixed assets that is allocated to the period to record the cost of using the assets during period. The higher the total cost of a business's fixed assets, then the higher its depreciation expense.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Thursday, October 7, 2010
Tuesday, October 5, 2010
Stock (Inventory) and expenses
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Stock (Inventory) and expenses
Inventory is usually the largest current asset of a business that sells products. If the stock is greater at the end of the period than at the start of the reporting period, the amount the business actually paid in cash for that inventory is more than what the business recorded as its cost of good sold expense. When that occurs, the accountant deducts the stock increase from net income for determining cash flow from profit.
The prepaid expenses asset (accrual) account works in much the same way as the change in stock and accounts receivable accounts. However, changes in prepaid expenses are usually much smaller than changes in those other two asset accounts.
The beginning balance of prepaid expenses is charged to expense in the current year, but the cash was actually paid out last year, this period, the business pays cash for next period's prepaid expenses, which affects this period's cash flow, but doesn't affect net income until the next period. Simple, right?
As a business grows, it needs to increase its prepaid expenses for such things as fire insurance premiums, which have to be paid in advance of the insurance coverage, and its stocks of office supplies. Increases in accounts receivable, inventory and prepaid expenses are the cash flow price a business has to pay for growth. Rarely do you find a business that can increase its sales revenue without increasing these assets.
The lagging behind effect of cash flow is the price of business growth. Managers and investors need to understand that increasing sales without increasing accounts receivable isn't a realistic scenario for growth. In the real business world, you generally can't enjoy growth in revenue without incurring additional expenses.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Stock (Inventory) and expenses
Inventory is usually the largest current asset of a business that sells products. If the stock is greater at the end of the period than at the start of the reporting period, the amount the business actually paid in cash for that inventory is more than what the business recorded as its cost of good sold expense. When that occurs, the accountant deducts the stock increase from net income for determining cash flow from profit.
The prepaid expenses asset (accrual) account works in much the same way as the change in stock and accounts receivable accounts. However, changes in prepaid expenses are usually much smaller than changes in those other two asset accounts.
The beginning balance of prepaid expenses is charged to expense in the current year, but the cash was actually paid out last year, this period, the business pays cash for next period's prepaid expenses, which affects this period's cash flow, but doesn't affect net income until the next period. Simple, right?
As a business grows, it needs to increase its prepaid expenses for such things as fire insurance premiums, which have to be paid in advance of the insurance coverage, and its stocks of office supplies. Increases in accounts receivable, inventory and prepaid expenses are the cash flow price a business has to pay for growth. Rarely do you find a business that can increase its sales revenue without increasing these assets.
The lagging behind effect of cash flow is the price of business growth. Managers and investors need to understand that increasing sales without increasing accounts receivable isn't a realistic scenario for growth. In the real business world, you generally can't enjoy growth in revenue without incurring additional expenses.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Sunday, October 3, 2010
Revenue and receivables
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Revenue and receivables
In most businesses, what drives the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items are the accounts receivable. As a hypothetical situation, imagine a business that offers all its customers a 30-day credit period, which is fairly common in transactions between businesses, (not transactions between a business and individual consumers).
An accounts receivable asset shows how much money customers who bought products on credit still owe the business. It's a promise of payment that the business will receive. Basically, accounts receivable is the amount of uncollected sales revenue at the end of the accounting period. Cash does not increase until the business actually collects this money from its business customers. However, the amount of money in accounts receivable is included in the total sales revenue for that same period. The business did make the sales, even if it hasn't acquired all the money from the sales yet. Sales revenue, then isn't equal to the amount of cash that the business accumulated.
To get actual cash flow, the accountant must subtract the amount of credit sales not collected from the sales revenue in cash. Then add in the amount of cash that was collected for the credit sales that were made in the preceding reporting period. If the amount of credit sales a business made during the reporting period is greater than what was collected from customers, then the accounts receivable account increased over the period and the business has to subtract from net income that difference.
If the amount they collected during the reporting period is greater than the credit sales made, then the accounts receivable decreased over the reporting period, and the accountant needs to add to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Revenue and receivables
In most businesses, what drives the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items are the accounts receivable. As a hypothetical situation, imagine a business that offers all its customers a 30-day credit period, which is fairly common in transactions between businesses, (not transactions between a business and individual consumers).
An accounts receivable asset shows how much money customers who bought products on credit still owe the business. It's a promise of payment that the business will receive. Basically, accounts receivable is the amount of uncollected sales revenue at the end of the accounting period. Cash does not increase until the business actually collects this money from its business customers. However, the amount of money in accounts receivable is included in the total sales revenue for that same period. The business did make the sales, even if it hasn't acquired all the money from the sales yet. Sales revenue, then isn't equal to the amount of cash that the business accumulated.
To get actual cash flow, the accountant must subtract the amount of credit sales not collected from the sales revenue in cash. Then add in the amount of cash that was collected for the credit sales that were made in the preceding reporting period. If the amount of credit sales a business made during the reporting period is greater than what was collected from customers, then the accounts receivable account increased over the period and the business has to subtract from net income that difference.
If the amount they collected during the reporting period is greater than the credit sales made, then the accounts receivable decreased over the reporting period, and the accountant needs to add to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Friday, October 1, 2010
Balance Sheet
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Balance sheet
A balance sheet is a quick picture of the financial condition of a business at a specific period in time. The activities of a business fall into two separate groups that are reported by an accountant. They are profit-making activities, which includes sales and expenses. This can also be referred to as Profit & Loss report. There are also financing and investing activities that include securing money from debt and equity sources of capital, returning capital to these sources, making distributions from profit to the owners, making investments in assets and eventually disposing of the assets.
Profit making activities are reported in the Profit & loss report; financing and investing activities are found in the statement of cash flows. In other words, two different financial statements are prepared for the two different types of transactions. The statement of cash flows also reports the cash increase or decrease from profit during the year as opposed to the amount of profit that is reported in the income statement.
The balance sheet is different from the P & L and cash flow statements which report, as it says, income of cash and outgoing cash. The balance sheet represents the balances, or amounts, or a company's assets, liabilities and owners' equity at an instant in time. The word balance has different meanings at different times. As it's used in the term balance sheet, it refers to the balance of the two opposite sides of a business, total assets on one side and total liabilities on the other. However, the balance of an account, such as the asset, liability, revenue and expense accounts, refers to the amount in the account after recording increases and decreases in the account, just like the balance in your checking account. Accountants can prepare a balance sheet any time that a manager requests it. But they're generally prepared at the end of each month, quarter and year. It's always prepared at the close of business on the last day of the profit period.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Balance sheet
A balance sheet is a quick picture of the financial condition of a business at a specific period in time. The activities of a business fall into two separate groups that are reported by an accountant. They are profit-making activities, which includes sales and expenses. This can also be referred to as Profit & Loss report. There are also financing and investing activities that include securing money from debt and equity sources of capital, returning capital to these sources, making distributions from profit to the owners, making investments in assets and eventually disposing of the assets.
Profit making activities are reported in the Profit & loss report; financing and investing activities are found in the statement of cash flows. In other words, two different financial statements are prepared for the two different types of transactions. The statement of cash flows also reports the cash increase or decrease from profit during the year as opposed to the amount of profit that is reported in the income statement.
The balance sheet is different from the P & L and cash flow statements which report, as it says, income of cash and outgoing cash. The balance sheet represents the balances, or amounts, or a company's assets, liabilities and owners' equity at an instant in time. The word balance has different meanings at different times. As it's used in the term balance sheet, it refers to the balance of the two opposite sides of a business, total assets on one side and total liabilities on the other. However, the balance of an account, such as the asset, liability, revenue and expense accounts, refers to the amount in the account after recording increases and decreases in the account, just like the balance in your checking account. Accountants can prepare a balance sheet any time that a manager requests it. But they're generally prepared at the end of each month, quarter and year. It's always prepared at the close of business on the last day of the profit period.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Wednesday, September 29, 2010
Gains and Losses
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Gains and Losses
It would probably be ideal if business and life were as simple as producing goods, selling them and recording the profits. But there are often circumstances that disrupt the cycle, and it's part of the accountants job to report these as well. Changes in the business climate, or cost of goods or any number of things can lead to exceptional or extraordinary gains and losses in a business. Some things that can alter the income statement can include downsizing or restructuring the business. This used to be a rare thing in the business environment, but is now fairly commonplace. Usually it's done to offset losses in other areas and to decrease the cost of employees' salaries and benefits. However, there are costs involved with this as well, such as redundancy pay, outplacement services, and retirement costs.
In other circumstances, a business might decide to discontinue certain product lines. The nature of communication has changed so drastically, with email, mobile phones and other forms, that telegrams have been rendered obsolete. When you no longer sell enough of a product at a high enough profit to make the costs of manufacturing it worthwhile, then it's time to change your product mix.
Legal action and other actions can cause extraordinary losses or gains as well. If you win damages in a legal action against others, then you've incurred an extraordinary gain. Likewise if your own legal fees and damages or fines are excessive, then these can significantly impact the Profit & Loss statement.
Occasionally a business will change accounting methods or need to correct any errors that had been made in previous financial reports. Generally, Financial Accounting Standards require that businesses make any one-time losses or gains very visible in their Profit & Loss statement.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at http://www.nottingham-accounting-solutions.co.uk/
Gains and Losses
It would probably be ideal if business and life were as simple as producing goods, selling them and recording the profits. But there are often circumstances that disrupt the cycle, and it's part of the accountants job to report these as well. Changes in the business climate, or cost of goods or any number of things can lead to exceptional or extraordinary gains and losses in a business. Some things that can alter the income statement can include downsizing or restructuring the business. This used to be a rare thing in the business environment, but is now fairly commonplace. Usually it's done to offset losses in other areas and to decrease the cost of employees' salaries and benefits. However, there are costs involved with this as well, such as redundancy pay, outplacement services, and retirement costs.
In other circumstances, a business might decide to discontinue certain product lines. The nature of communication has changed so drastically, with email, mobile phones and other forms, that telegrams have been rendered obsolete. When you no longer sell enough of a product at a high enough profit to make the costs of manufacturing it worthwhile, then it's time to change your product mix.
Legal action and other actions can cause extraordinary losses or gains as well. If you win damages in a legal action against others, then you've incurred an extraordinary gain. Likewise if your own legal fees and damages or fines are excessive, then these can significantly impact the Profit & Loss statement.
Occasionally a business will change accounting methods or need to correct any errors that had been made in previous financial reports. Generally, Financial Accounting Standards require that businesses make any one-time losses or gains very visible in their Profit & Loss statement.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at http://www.nottingham-accounting-solutions.co.uk/
Payroll in Mansfield
Payroll in Mansfield
Nottingham Accounting Solutions offers Sage Payroll Administration in Sutton in Ashfield.
Our Sage Payroll services save you the time, complication and burden which diverts energy and resources from the core activities of your business.
The task is made more difficult by the complexity of taxation and employment legislation and the accompanying penalties for non-compliance.
Outsourcing your Sage Payroll to Nottingham Accounting Solutions offers a great cost effective solution, simply e-mail, fax or telephone us the details each pay period and leave the rest to us.
Many businesses, of all sizes, outsource their payroll to a dedicated Sage Payroll Bureau.
Consider outsourcing - it can save you time, hassle and money.
For example:
• Free up staff to concentrate on the core aspects of your business.
• Stay up to date with the latest changes to payroll legislation
• Save the expense of having to invest in the hardware, software, staff and training for the payroll system
• Deal with Student Loans, Statutory Sick Pay, Statutory Maternity / Paternity Pay, are over retirement age and other complications such as tax credits.
• Even with only a few employees, you will make savings by engaging Nottingham Accounting Solutions to administer your Sage payroll.
Our Sage Payroll Bureau provides:
• Customised Sage payslips
• Administration of PAYE and National Insurance
• Tax credits
• Statutory sick pay
• Statutory maternity pay etc.
• Completion of statutory forms, including year end returns, to issue to your employees and submit to the Inland Revenue
• Summaries and analysis of staff costs
• Administration of incentive schemes, bonuses, and ex-gratia and termination payments
We can also supply Sage Payroll products at competitive prices and we also carry out Sage Payroll Training around the Sutton in Ashfield area on your own systems.
Click here now for an informal, confidential, no obligation chat to see where Nottingham Accounting Solutions can help you save time and money or even better, CALL NOW on 01623 550793 or 07870 359274 or visit our website for more details here Payroll in Mansfield.
Nottingham Accounting Solutions offers Sage Payroll Administration in Sutton in Ashfield.
Our Sage Payroll services save you the time, complication and burden which diverts energy and resources from the core activities of your business.
The task is made more difficult by the complexity of taxation and employment legislation and the accompanying penalties for non-compliance.
Outsourcing your Sage Payroll to Nottingham Accounting Solutions offers a great cost effective solution, simply e-mail, fax or telephone us the details each pay period and leave the rest to us.
Many businesses, of all sizes, outsource their payroll to a dedicated Sage Payroll Bureau.
Consider outsourcing - it can save you time, hassle and money.
For example:
• Free up staff to concentrate on the core aspects of your business.
• Stay up to date with the latest changes to payroll legislation
• Save the expense of having to invest in the hardware, software, staff and training for the payroll system
• Deal with Student Loans, Statutory Sick Pay, Statutory Maternity / Paternity Pay, are over retirement age and other complications such as tax credits.
• Even with only a few employees, you will make savings by engaging Nottingham Accounting Solutions to administer your Sage payroll.
Our Sage Payroll Bureau provides:
• Customised Sage payslips
• Administration of PAYE and National Insurance
• Tax credits
• Statutory sick pay
• Statutory maternity pay etc.
• Completion of statutory forms, including year end returns, to issue to your employees and submit to the Inland Revenue
• Summaries and analysis of staff costs
• Administration of incentive schemes, bonuses, and ex-gratia and termination payments
We can also supply Sage Payroll products at competitive prices and we also carry out Sage Payroll Training around the Sutton in Ashfield area on your own systems.
Click here now for an informal, confidential, no obligation chat to see where Nottingham Accounting Solutions can help you save time and money or even better, CALL NOW on 01623 550793 or 07870 359274 or visit our website for more details here Payroll in Mansfield.
Sage Training for Accounts and Bookkeeping in Sutton in Ashfield
Sage Training for Accounts and Bookkeeping in Sutton in Ashfield
Nottingham Accounting Solutions Ltd is based in Sutton in Ashfield can help you
•Sage Training
When you have invested in Sage Accounts software, either Sage Line 50 or Sage Instant Accounts, it needs to work for your business. OK, you can go on a Sage Accounts training course which are very expensive, very general and usually miles away from your business. We offer one-to-one Sage Accounts and Bookkeeping Training on your own system for you and your staff in the Sutton in Ashfield area. Our Sage Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage training and support training as you go through your month end, VAT returns and year end routines at the appropriate times. See our website for more details at Sage Training for Accounts in Mansfield
•Sage Accounts Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Accounts and Bookkeeping Software, then set it up and configure it for YOUR business. This alone can save you hours of frustration.
•Sage Accounts software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage products at competitive prices.
So:
•Nottingham Accounting Solutions Ltd can sell you the Sage software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs. We aim to put you on the fast track to getting the most out of your Sage Accounts software but as an alternative, why not outsource your accounting and bookkeeping to Nottingham Accounting Solutions.
Take a look at our Accounts and Bookkeeping Mansfield web page for more details.
We also offer Sage Training for Payroll Mansfield.
So call Colleen on 01623 550793
Nottingham Accounting Solutions Ltd is based in Sutton in Ashfield can help you
•Sage Training
When you have invested in Sage Accounts software, either Sage Line 50 or Sage Instant Accounts, it needs to work for your business. OK, you can go on a Sage Accounts training course which are very expensive, very general and usually miles away from your business. We offer one-to-one Sage Accounts and Bookkeeping Training on your own system for you and your staff in the Sutton in Ashfield area. Our Sage Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage training and support training as you go through your month end, VAT returns and year end routines at the appropriate times. See our website for more details at Sage Training for Accounts in Mansfield
•Sage Accounts Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Accounts and Bookkeeping Software, then set it up and configure it for YOUR business. This alone can save you hours of frustration.
•Sage Accounts software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage products at competitive prices.
So:
•Nottingham Accounting Solutions Ltd can sell you the Sage software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs. We aim to put you on the fast track to getting the most out of your Sage Accounts software but as an alternative, why not outsource your accounting and bookkeeping to Nottingham Accounting Solutions.
Take a look at our Accounts and Bookkeeping Mansfield web page for more details.
We also offer Sage Training for Payroll Mansfield.
So call Colleen on 01623 550793
Sage training for Payroll in Sutton in Ashfield
Sage training for Payroll in Sutton in Ashfield
Nottingham Accounting Solutions Ltd is based in Sutton in Ashfield can help you
• Sage Training
When you have invested in Sage Payroll software, either Sage 50 Payroll or Sage Instant Payroll, it needs to work for your business. We offer one-to-one Sage Payroll Training on your own system for you and your staff in the Sutton in Ashfield area. Our Sage Payroll Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage support training as you go through your month end and year end routines at the appropriate times. For more information see our website at Sage Training for Payroll Mansfield.
• Sage Payroll Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Payroll Software, then set it up and configure it for YOUR business. Save hours of frustration.
• Sage Payroll software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage Payroll products at competitive prices.
• Nottingham Accounting Solutions Ltd can sell you the Sage Payroll software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs.
We aim to put you on the fast track to getting the most out of your Sage Payroll software but as an alternative, why not outsource your Payroll to the Nottingham Accounting Solutions Ltd. Payroll Bureau.
Take a look at our Payroll Mansfield web page for more details.
We also offer Sage Training for Accounts in Mansfield
So call Colleen on 01623 550793
Nottingham Accounting Solutions Ltd is based in Sutton in Ashfield can help you
• Sage Training
When you have invested in Sage Payroll software, either Sage 50 Payroll or Sage Instant Payroll, it needs to work for your business. We offer one-to-one Sage Payroll Training on your own system for you and your staff in the Sutton in Ashfield area. Our Sage Payroll Training is tailored to suit your ability and confidence from a complete Sage beginner to a competent Sage user. We also offer further Sage support training as you go through your month end and year end routines at the appropriate times. For more information see our website at Sage Training for Payroll Mansfield.
• Sage Payroll Installation, Set up and configuration
Save yourself hours and hours of your precious time – let us install your Sage Payroll Software, then set it up and configure it for YOUR business. Save hours of frustration.
• Sage Payroll software sales
As a Sage Accountants Club member, Nottingham Accounting Solutions Ltd can provide you with the latest Sage Payroll products at competitive prices.
• Nottingham Accounting Solutions Ltd can sell you the Sage Payroll software, install it, set it up and configure it to your business, training you or your staff to use it on a one – to – one basis and also offer the ongoing support for as long as you need it. Quite a cost effective solution to your needs.
We aim to put you on the fast track to getting the most out of your Sage Payroll software but as an alternative, why not outsource your Payroll to the Nottingham Accounting Solutions Ltd. Payroll Bureau.
Take a look at our Payroll Mansfield web page for more details.
We also offer Sage Training for Accounts in Mansfield
So call Colleen on 01623 550793
Monday, September 27, 2010
Assets and Liabilities
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Assets and Liabilities
Making a profit in a business is derived from several different areas. It can get a little complicated because just as in our personal lives, business is run on credit as well. Many businesses sell their products to their customers on credit. Accountants use an asset account called accounts receivable to record the total amount owed to the business by its customers who haven't paid the balance in full yet. Much of the time, a business hasn't collected its receivables in full by the end of the fiscal year, especially for such credit sales that could be transacted near the end of the accounting period.
The accountant records the sales revenue and the cost of goods sold for these sales in the year in which the sales were made and the products delivered to the customer. This is called accruals based accounting, which records revenue when sales are made and records expenses when they're incurred as well. When sales are made on credit, the accounts debtors asset account is increased. When cash is received from the customer, then the cash account is increased and the debtors account is decreased.
The cost of goods sold is one of the major expenses of businesses that sell goods, products or services. Even a service involves expenses. It means exactly what it says in that it's the cost that a business pays for the products it sells to customers. A business makes its profit by selling its products at prices high enough to cover the cost of producing them, the costs of running the business, the interest on any money they've borrowed and income taxes, with money left over for profit.
When the business acquires products, the cost of them goes into what's called a stock account.
The cost is deducted from the cash account, or added to the creditors account, depending on whether the business has paid with cash or credit.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Assets and Liabilities
Making a profit in a business is derived from several different areas. It can get a little complicated because just as in our personal lives, business is run on credit as well. Many businesses sell their products to their customers on credit. Accountants use an asset account called accounts receivable to record the total amount owed to the business by its customers who haven't paid the balance in full yet. Much of the time, a business hasn't collected its receivables in full by the end of the fiscal year, especially for such credit sales that could be transacted near the end of the accounting period.
The accountant records the sales revenue and the cost of goods sold for these sales in the year in which the sales were made and the products delivered to the customer. This is called accruals based accounting, which records revenue when sales are made and records expenses when they're incurred as well. When sales are made on credit, the accounts debtors asset account is increased. When cash is received from the customer, then the cash account is increased and the debtors account is decreased.
The cost of goods sold is one of the major expenses of businesses that sell goods, products or services. Even a service involves expenses. It means exactly what it says in that it's the cost that a business pays for the products it sells to customers. A business makes its profit by selling its products at prices high enough to cover the cost of producing them, the costs of running the business, the interest on any money they've borrowed and income taxes, with money left over for profit.
When the business acquires products, the cost of them goes into what's called a stock account.
The cost is deducted from the cash account, or added to the creditors account, depending on whether the business has paid with cash or credit.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Saturday, September 25, 2010
Making a Profit
Accounts, Bookkeeping and Payroll can be a burden to small business. This new series of blogs from Nottingham Accounting Solutions aims at making Accounts, Bookkeeping and Payroll a little clearer.
Making a Profit
Accountants are responsible for preparing two primary types of financial statements for a business. The Profit & Loss statement reports the profit (or loss) -making activities of the business and the bottom-line profit or loss for a specified period. The Balance Sheet reports the financial position of the business at a specific point in time, often the last day of the period. A Cash Flow forecast predicts what will /may happen in the future with any impact that may occur due to changing circumstances.
Everyone knows profit is a good thing. It's what our economy is founded on. It doesn't sound like such a big deal. Make more money than you spend to sell or manufacture products. But of course nothing's ever really simple, is it?
You read a P & L report from the top line to the bottom line. Every step of the income statement reports the deduction of an expense. The income statement also reports changes in assets and liabilities as well, so that if there's a revenue increase, it's either because there's been an increase in assets or a decrease in a company's liabilities. If there's been an increase in the expense line, it's because there's been either a decrease in assets or an increase in liabilities.
Net worth is also referred to as owners' equity in the business. They're not exactly interchangeable. Net worth expresses the total of assets less the liabilities. Owners' equity refers to who owns the assets after the liabilities are satisfied.
These shifts in assets and liabilities are important to owners and executives of a business because it's their responsibility to manage and control such changes. Making a profit in a business involves several variable, not just increasing the amount of cash that flows through a company, but management of other assets as well.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Making a Profit
Accountants are responsible for preparing two primary types of financial statements for a business. The Profit & Loss statement reports the profit (or loss) -making activities of the business and the bottom-line profit or loss for a specified period. The Balance Sheet reports the financial position of the business at a specific point in time, often the last day of the period. A Cash Flow forecast predicts what will /may happen in the future with any impact that may occur due to changing circumstances.
Everyone knows profit is a good thing. It's what our economy is founded on. It doesn't sound like such a big deal. Make more money than you spend to sell or manufacture products. But of course nothing's ever really simple, is it?
You read a P & L report from the top line to the bottom line. Every step of the income statement reports the deduction of an expense. The income statement also reports changes in assets and liabilities as well, so that if there's a revenue increase, it's either because there's been an increase in assets or a decrease in a company's liabilities. If there's been an increase in the expense line, it's because there's been either a decrease in assets or an increase in liabilities.
Net worth is also referred to as owners' equity in the business. They're not exactly interchangeable. Net worth expresses the total of assets less the liabilities. Owners' equity refers to who owns the assets after the liabilities are satisfied.
These shifts in assets and liabilities are important to owners and executives of a business because it's their responsibility to manage and control such changes. Making a profit in a business involves several variable, not just increasing the amount of cash that flows through a company, but management of other assets as well.
Nottingham Accounting Solutions Ltd offer accounts, bookkeeping and payroll services in the Nottingham and Mansfield area as well as Sage sales, set-up and 1 - to - 1 training on Sage accounts and Sage payroll. So why not take a look at www.nottingham-accounting-solutions.co.uk
Subscribe to:
Posts (Atom)
Posts
