A strong economy drives business growth. I think most of us can agree on that. Growth is usually good… But if it is not controlled growth, it simply will not be sustainable. In this blog, Pitfalls to Avoid When Growing Your Business, I outline several pitfalls to avoid when growing your business (especially in a
See Also: Chart of Accounts (COA) Problems in Chart of Accounts Design Complex Number for SGA Expenses Role of a Company Back Office Standard Chart of Accounts In accounting, a standard chart of accounts is a numbered list of the accounts that comprise a company’s general ledger. Furthermore, the company chart of accounts is basically a filing system for categorizing all of
A balance sheet is a statement of the companies health. How does the liabilities and equity compare to the assets? Balancing the balance sheet is a critical part of accounting as it gives the company, bankers, and investors an idea of how the company is doing. Does the balance sheet need to balance? Yes. It
Job costing, cost accounting, manufacturing costs, what does all of this mean? Oftentimes, job costing, cost accounting, and manufacturing costs are used interchangeably. As a manufacturer, it does not matter what you call it. But it is critical that as a manufacturer, you capture all of your conversion costs. Simply put, you are taking raw material
See also: Traditions Turned Financial Fluctuations Improving Profitability – Fuel for Growth Product Life Cycle Stages Beware of the J Curve Black Friday In America, Black Friday is an event that is not only the most shopped on day during a typical year, but it also generates huge sales. “Only in America do people trample
Seasonality can be brutal. If your business is like ours, summertime is pretty slow. The phones don’t ring, employees and clients are on vacation, nobody is available for appointments and not much happens in general. Even if summertime is busy in your industry, chances are that there are other times during the year that business
Operating Cycle Definition The Operating cycle definition establishes how many days it takes to turn purchases of inventory into cash receipts from its eventual sale. It is also known as cash operating cycle, cash conversion cycle, or asset conversion cycle. Operating cycle has three components of payable turnover days, Inventory Turnover days and Accounts Receivable
Throughput Definition Throughput is the number of units of output a company produces and sells over a period of time. Furthermore, only units sold count towards throughput. Do not count units produced but not sold during the time period as throughput. The goal of a profit-seeking organization is to maximize throughput while minimizing inventory and
See Also: Vendor Finance Inventory Cost Perpetual Inventory System Just in Time Inventory System Open Account SKU Definition A SKU, defined as a stock-keeping unit, is a unique number which distinguishes one product from another. It is used, most often, for the purpose of accounting for inventory. Each product has a unique number, allowing smooth
See Also: Loan Agreement Collateralized Debt Obligations When is an interest rate not as important in selecting a loan? Debt Ratio Analysis Debt Service Coverage Ratio (DSCR) What Your Banker Wants You To Know 7 C’s of Banking Budgeting 101: Creating Successful Budgets Self-Liquidating Loans The term “self-liquidating loans” is banker slang. It refers to
See Also: External Sources of Cash What Does A Lender Want To Know Finding The Right Lender Due Diligence on Lenders Weighted Average Cost of Capital (WACC) Mezzanine Financing A mezzanine lender, provider of mezzanine financing, functions similar to a bank in terms of providing a source of capital for companies. They get their capital
Raise or Increase Inventory Turnover Ratio In order to increase inventory turnover ratio for a company, it is important to understand the calculations that go into calculating the turnover ratio. Once this is achieved, a company can go about the necessary efforts to raise this ratio, increasing the overall inventory sold. Inventory Ratio Calculation Inventory
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