In the former, you record income or expenses when funds are received or paid out. For the latter, your income is recorded when the transactions occur, no matter when the funds are received or paid out. In non-profit accounting, grants are considered prime commodities that increase funds, for your nonprofit to achieve its mission and […]
Category Archives: Bookkeeping
More reliance on the safety margin can lead to missed investment opportunities and a narrow focus on just one part of an investment decision, which could lead to less-than-ideal results. Another problem with the margin of safety is that it often uses data from the past, which may not be a good indicator of how […]
If the ARR is equal to 5%, this means that the project is expected to earn five cents for every dollar invested per year. Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models […]
Therefore, the acid test ratio does not consider inventories to be liquid. Another way to calculate the numerator is to take all current assets and subtract illiquid assets. Most importantly, inventory should be subtracted, keeping in mind that this will negatively skew the picture for retail businesses because of the amount of inventory they carry. […]
The Construction Industry Scheme (CIS) essentially requires contractors to deduct taxes from subcontractors and then pass this money onto HMRC. These deductions are then counted as advanced payment towards the subcontractor’s overall tax and National Insurance. Most companies can quickly identify the difference between the cost of goods sold and overheads. Most items a regular […]
Even if you are able to easily calculate your commissions with a traditional spreadsheet, creating all the necessary reports for your team is very difficult to execute with Excel. For instance, if you and your colleague closed a deal at 10% commission with the split being done at a 50/50 share, remove 50% of the […]
Receipts and payments accounts are not part of the double entry system. Another name for an income and expenses summary, as adopted in non-trading concerns. “As per the agreed terms, we kindly ask that the payment be completed by [specific date]. A late fee of [amount/percentage] may apply for overdue payments.” What is an Income […]
The items therein should be compared to the new bank statement to check if these have since been cleared. Since these items are generally reported to the company before the bank statement date, they seldom appear on a reconciliation. Examples include deposited checks returned for non-sufficient funds (NSF) or notes collected on the depositor’s behalf. […]
The Statement of Functional Expenses is a crucial component of nonprofit accounting, providing a detailed breakdown of expenses by function, such as program services, management, and fundraising. This statement allows organizations to demonstrate how resources are allocated to fulfill their mission, ensuring transparency and accountability to stakeholders. It is essential for nonprofits to accurately categorize […]
We are a diverse team of top industry experts and turnaround, transformation and performance improvement professionals who know how to deliver successful outcomes in complex situations. Our complementary backgrounds and experience allow us to structure bespoke solutions for our clients, situation by situation. We live and breathe a set of core values that bookkeeping clean […]