The End of Period Cleanup – Making Adjusting Entries Sometimes transactions take place in one period but impact another. Other times, you know a transaction will be finalized in the future, but at least some part of it has ties to the current period. These two situations are the main reason for adjusting entries, which … Read more
The End of Period Cleanup – The Working Trial Balance A working trial balance is like a supercharged version of the regular report. It starts with the three-and-a-half standard columns that you find on your standard trial balance: account number (the half), account name, debit balance, credit balance. Then it adds on a couple of … Read more
The End of Period Cleanup – Accounting Periods In accounting, financial results are measured by periods. Some periods are set by outside authorities, such as the bank that gave you your business loan, or the IRS. Some are set solely at your discretion, so you can have as many periods as you want as long … Read more
Controlling Purchase Costs – Recording Accounts Payable Transactions When you have accounts payable transactions, you have inventory purchases. Companies that have inventory use the accrual accounting method. So, if you have accounts payable, your company uses the accrual method. That makes things a little easier, because there’s only one way to do things: you record … Read more
Controlling Purchase Costs – Review Their Invoices When you receive an invoice from a vendor, verify it immediately. It’s not uncommon to find mistakes on invoices. Typically, you’ll have at least two other documents to compare with your invoice: your original purchase order and the product packing slip. Make sure every number on the source … Read more
Controlling Purchase Costs – Dealing with Purchase Problems Like most areas of business, purchases aren’t completely problem-free; in fact, there are lots of different ways that troubles can arise. Orders may be filled incorrectly or incompletely, merchandise may be damaged while it’s being transported, products may be of lower quality than expected (particularly when dealing … Read more
Controlling Purchase Costs – Creating Purchase Orders If your company sells products, it first needs to buy them. In order to avoid potential inventory snafus, most buying companies use purchase orders to confirm the details of the agreement. When you deal with vendors, especially new or troublesome vendors, a purchase order is your safety net. … Read more
Controlling Purchase Costs – Getting Vendors to Extend Credit It can be hard for new, small, unproven businesses to get credit terms from vendors. In fact, some vendors may insist on deposits or cash on delivery until they’re comfortable with your company. Even though your brand-new business won’t have a credit history, let alone a … Read more
Controlling Purchase Costs – Choose Your Vendors Wisely Your vendors have as much interest in your company’s success as you do. When you make a lot of sales, they make a lot of sales; when you get paid, they get paid. Having reliable and trustworthy vendors can help your business succeed, just as dealing with … Read more
Controlling Purchase Costs – Know What You Want Before You Buy Planning your purchases may not sound like as much fun as coming up with a splashy new ad campaign, but it can do an awful lot for your bottom line in the long run. In fact, cutting costs has a bigger impact on profitability … Read more
