Understanding and Applying Accounting Reports and Ratios

When it comes to tracking incoming sales and outgoing expenses, there are many ways businesses can keep up with their invoices and implement strategies to reduce the time they spend on unpaid sales.Accounts Receivable Turnover RatioSimply defined, the accounts receivable turnover ratio is a way of showing what percent of a company’s receivables or invoices are paid by clients. The U.S. Small Business Administration explains this ratio is determined by "dividing average accounts receivable by sales." Determining average accounts receivable is done by adding the beginning and ending figures -- be [...]

2019-08-01T12:00:03-08:00August 1st, 2019|

How to Define and Calculate a Break-Even Analysis

According to data from a U.S. Small Business Administration Office of Advocacy report from August 2018, businesses have varied longevity.Nearly 80 percent (79.8 percent) of business startups in 2016 lasted until 2017. Between 2005 and 2017, the SBA mentions that 78.6 of new businesses lasted 12 months. Similarly, nearly 50 percent lasted at least five years.  While there are many reasons why a company goes out of business – one is profitability. Knowing when the business is breaking even and will start making a profit can be accomplished with a [...]

2019-07-01T12:00:02-08:00July 1st, 2019|

How to Make the Most of Margins and Markups

When it comes to gross margins and the American economy, they vary widely throughout the country's industries. When New York University's Leonard N. Stern School of Business recently compiled gross margin statistics for January 2019, they found the low end includes the Auto and Truck industry with a gross margin of 11.45 percent and the Oilfield Services/Equipment industry with a gross margin of 10.70 percent. On the top end, the General and Diversified Real Estate industry saw a gross margin of 73.08 percent and the Investments and Asset Management industry [...]

2019-06-01T12:00:03-08:00June 1st, 2019|

How to Budget for Estimated Tax Payments

According to a March 22 Internal Revenue Service News Release, 2018 federal tax filers might be able to have any penalties for an underpayment of estimated tax removed. This could be possible if they've paid at least 80 percent of their 2018 tax obligations through either quarterly estimated payments, income tax withholdings or a combination of both during the 2018 calendar year.This new level was established after the 90 percent payment requirement was reduced to 85 percent of estimated tax obligations on Jan. 16. With paying estimated taxes a legal [...]

2019-05-01T12:00:03-08:00May 1st, 2019|

How to Create Cash Flow Projections and Profit & Loss Statements

When it comes to making cash flow projections, we’re all aware that it’s not an exact science. One of the main difficulties about accurately projecting cash flow has to do with timing. Examples include factoring in overhead such as payroll; lease or tax payments on the building; using credit to make purchases or for future investment to grow the business; and when payment is collected from clients.Understanding Cash Flow ProjectionOne important reason that many business owners create a cash flow projection is to include it in their business plan when [...]

2019-03-01T12:00:03-08:00March 1st, 2019|

How Businesses Can Effectively Manage Seasonal Sales

When it comes to businesses dealing with seasonal sales, making payroll and other financial obligations can be stressful on budgets. However, one way to deal with fluctuating sales and cash flow problems is to see if invoice factoring is appropriate to meet year-round needs.Invoice FactoringOne way for businesses dependent on seasonal sales is to have better financial predictability and available resources, as the Journal of Accountancy explains. Businesses can accomplish this by selling their accounts receivables through factoring.Companies looking to increase cash flow during the slow sales season can benefit [...]

2019-02-01T12:00:03-08:00February 1st, 2019|

Tips for Choosing the Appropriate Liability Insurance for Your Business

When it comes to liability insurance, the saying "you can never be too prepared" is quite meaningful. While business owners cannot predict what happens day to day or year to year, they can look into having business liability as way to give themselves peace of mind. The first step is to understand why it’s so important.The Rocky Mountain Insurance Information Association reports that more than one in two home-based business owners lack necessary insurance. Furthermore, the Independent Insurance Agents of America (IIAA) found that 4 of 10 respondents do not [...]

2019-01-01T12:00:03-08:00January 1st, 2019|

How to Maximize Subscription Marketing Efforts

According to research from McKinsey & Company, 15 percent of Internet consumers have become members of at least one subscription service in 2018. The consulting firm also found that these subscription-based models cover a multitude of products, including food, drinks, meal kits, clothing, vitamins and razors. While these are well-known by consumers, there are many other types of subscriptions – such cloud computing or storage technology services – available for purchase by both consumer and business customers.According to McKinsey & Company, the online subscription industry has increased in size from [...]

2018-12-01T12:00:03-08:00December 1st, 2018|

How to Create an Effective Landing Page

When it comes to online advertising, there are many ways to reach new and existing customers for new product or service offerings. One approach is to create a landing page that emphasizes a unique or significant product launch. According to Forbes and Wordstream, the right type of landing page can increase leads by as much as 220 percent more compared to above-the-fold calls to action. Since this type of marketing is so effective, what are some attributes of an effective landing page?Why the Need for Landing PagesLanding pages are not [...]

2018-11-01T12:00:03-08:00November 1st, 2018|