Monday, February 10, 2014

4 Articles on Accounting for Small Businesses

Here are four articles I've written for other publications over the past year to 1.5 years that deal with small business accounting issues, concerns and questions. These answer some of the questions I periodically receive from entrepreneurs and small business owners.

Cash vs. GAAP

Accountant punching adding machine.
Yes, some accountants still use adding machines on occasion!
Do you currently use cash accounting but want to switch to GAAP (generally accepted accounting principles)? Or do you not know the difference and use a combination of the two? Well, you need to pick one and follow it. This article provides you with a comparison between cash-based accounting and accounting under GAAP.

Projected Profit and Loss Statement

Managers looking at financial statements
Preparation and analysis of financial statements is critical to business success.
A proforma income statement or, in other terms, a projected profit and loss statement, can be a highly valuable tool to assist you in the planning of your business and determination of your cash and financing needs.

How to Certify a Profit and Loss Statement
Owners often scramble to give their bookkeepers or accountants the information needed to prepare financial statements and tax returns. This happens most often with those owners who have no system in place, no regularly scheduled bookkeeper.  Bills, receipts, loan documents are often not fully organized and filed.

 Shareholder's Equity vs. Retained Earnings

Investor on top of wealth
Owners and investors reap wealth from retained earnings.
Companies operate to generate wealth and income for their owners. Business and individuals buy shares in profitable companies, thus acting as investors, to reap the benefits of this increase in wealth.

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