What Is an Operating Statement? Definition, Example & Uses
The operating statement is the go-to report for figuring out if your business is making money. It shows how much you’re earning, how much you’re spending, and what’s left over, plain and simple. This report helps you keep track of your profits and understand where your money is going. It’s an essential tool for […]
Deferred Tax Assets – Everything You Need to Know
Deferred tax assets are a valuable tool for managing your company’s finances. They reduce future tax bills, improve cash flow, and make a big difference in long-term planning. But many companies don’t fully understand how they work or how to use them effectively. Read: A Complete Guide to Financial Statement Analysis for Strategy Makers […]
Common Size Financial Statement: What Is It and How to Prepare It
If you’ve ever looked at a financial statement and felt like you were drowning in numbers, you’re not alone. But here’s good news – a common size statement may help. It’s a simple tool that takes all those big numbers and converts them into percentages. In this way, it’s much easier to spot trends, […]
15 Key Metrics to Track as KPI for Finance Department
Tracking the right KPI for finance department success is critical. Without the right metrics, finance teams risk focusing on irrelevant data, which can lead to poor decisions, inefficiencies, and missed opportunities. But not every KPI is useful for every business. How do you know which ones are worth your time? Read: A Complete Guide […]
How to Create a Monthly Financial Report in 7 Easy Steps
Struggling with monthly financial reports? You’re not alone. They’re essential for tracking your company’s financial health, covering cash flow, budgets, and performance. But putting them together can be frustrating. Manual data entry, disorganized systems, and a lack of real-time updates often turn this task into a time-consuming headache. Read Financial Consolidation: […]
What Is Retained Cash Flow and How to Calculate it
Retained cash flow happens after you cover the basic expenses. You use it to invest in your business, pay off debt, or handle surprise expenses. If you’re always feeling short on cash or relying too much on loans, you should pay more attention to retained cash flow. It’s about knowing where your money is […]
What Are Prepaid Expenses
Paying upfront for things like rent, insurance, or subscriptions is standard practice in many businesses. But handling those payments correctly in your accounting isn’t just a formality – it directly affects your financial reporting and cash flow. Read: A Complete Guide to Financial Statement Analysis for Strategy Makers In this guide, we break […]
What is the Expense Recognition Principle?
The expense recognition principle is easy to overlook – until it causes confusion. Imagine this: you sell 1,000 products in March but wait until April to account for the production costs. As a result, your finances show huge profits in March and a surprising dip in April – and here’s how you come to a […]
Accrued Revenue 101: All You Need To Know
Accrued revenue can be confusing at first glance. Have you ever finished a job and wondered how to handle the money you haven’t been paid yet? If you handle this properly, it can make a huge difference and keep your finances in order. It’s especially important for businesses working on long-term projects or dealing with […]
Accounts Payable Turnover Ratio: Formula & What It Means
The accounts payable turnover ratio can flag serious cash flow problems. For example, a mid-sized manufacturing company noticed that despite growing sales, they were constantly short on cash. The reason? Their team was paying suppliers too early while customer payments were delayed, creating a cash gap that went unnoticed until it hurt operations. This ratio helps […]