Business Operations

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Acquiring Kitchen Equipment for Your Restaurant

New York has the Bowery. Chicago has Restaurant Row. Most major cities have this kind of restaurant supply street. Whether the products are new or used, you'll likely buy it here. If you're not located [more…]

Choosing an Accounting Method for the Cost of Goods Sold Expense

One main accounting decision companies that sell products must make is which method to use to record the cost of goods sold expense, which is the sum of the costs of the products sold to customers during [more…]

Adjustments to Net Income for Determining Cash Flow from Operating Activities

Debtors, stock and prepaid expenses are operating assetsused in the profit making process. Creditors and accrued expenses payable are operating liabilities [more…]

Deciding Whether Your Business Should Offer Store Credit

Many businesses decide to sell to customers on direct credit (or store credit), meaning credit offered by the business and not through a bank or credit card provider. This approach offers more flexibility [more…]

Bookkeeping Accounts Used to Track Business Inventory

Products to be sold are called inventory. As a bookkeeper, you use two accounts — Purchases and Inventory — to track inventory for your business. Here's a closer look at what the Purchases and Inventory [more…]

How to Manage Business Inventory and Its Value

After you record the receipt of inventory for your business, you must manage the inventory you have on hand. You also must know the value of that inventory. You may think that as long as you know what [more…]

Comparing Inventory Valuation Methods for a Business

The inventory valuation method you choose for your business — such as FIFO, LIFO, or Averaging — has an impact on your business’s profit margin. You can compare these methods to see what effect each method [more…]

Business Accounting: Buying and Monitoring Inventory Supplies

In addition to inventory, all businesses must buy supplies that are used to operate the business, such as paper, pens, and paper clips. Supplies that aren’t bought in direct relationship to the manufacturing [more…]

Padding Profits by Manufacturing Too Many Products

Whenever production output for a business is higher than sales volume, be on guard. Excessive production can inflate the profit figure. Until a product is sold, the product cost goes in the inventory asset [more…]

Entering the Initial Inventory Costs for a Business

When your business first receives inventory, you enter the initial cost of that inventory into the bookkeeping system based on the shipment’s invoice. Invoices are sometimes sent separately, and only a [more…]

Controlling Inventory and Supplies Billing in Your Business

Eventually, you have to pay for both the inventory and the supplies you purchase for your business. These bills are typically posted to Accounts Payable when they arrive, and they’re paid when due. A large [more…]

Tracking and Recording Cash Sales in a Bookkeeping System

Most businesses collect cash as payment for the goods or services they sell. These cash sales must be tracked and recorded in a bookkeeping system. Cash receipts include more than just bills and coins; [more…]

How to Balance Cash Register Transactions

A business must balance cash register transactions at the end of each day to properly track and record sales transactions. This also helps to ensure that cashiers don’t pocket a business’s cash — cashiers [more…]

How to Maintain Employee Records

Keeping employee records accurate and up to date is essential for your business, especially when considering all the state and federal filing requirements for employee taxes. Otherwise, you’ll have a hard [more…]

Basic Types of Business Manufacturing Costs

Businesses that manufacture products have several additional cost factors to consider compared with retailers and distributors. These types of manufacturing costs include raw materials, direct labor, variable [more…]

How to Classify Product Costs for a Manufacturer

Two issues exist when businesses classify product costs for a manufacturer. They must distinguish between manufacturing and non-manufacturing operating costs, and determine how to allocate indirect costs [more…]

How to Calculate Product Costs for a Manufacturer

Businesses that manufacture products must determine how to calculate their product costs. Because most businesses produce multiple products, their accounting systems must be very complex and detailed to [more…]

Examining Fixed Manufacturing Costs and Production Capacity

Product cost consists of two distinct components: fixed manufacturing costs and variable manufacturing costs. The production capacity refers to the people and physical resources needed to manufacture products [more…]

Recording Store Credit Transactions in a Bookkeeping System

When sales are made on store credit, you must record specific information into the accounting system. In addition to entering information regarding cash receipts, you update the customer accounts to be [more…]

Understanding Economic Value Added in Business

Economic Value Added (EVA) analysis measures how profitable it truly is to run a business instead of selling it. It states in a formula something you already know in your gut: If you're a business owner [more…]

How to Use Economic Value Added When Your Business Has Debt

In very large businesses, economic value added (EVA) analysis gets really computationally burdensome. Although there are multiple potential problems, you should be familiar with one common complication [more…]

How to Calculate Payroll for Employees at Your Business

When you know the details about your employees’ withholding allowances and their benefit costs, you can then calculate the final payroll for your business and post it to the books. [more…]

Bookkeeping: How to Track Sales Discounts

When your business offers discounts to customers, a good bookkeeping tactic is to track the sales discounts in a separate account so you can keep an eye on how much you discount sales in each month. [more…]

Recording Sales Returns and Allowances for Your Business

Bookkeeping can become pretty confusing if you incorrectly record sales returns, gift card sales, and returns bought with a discount. Most stores deal with sales returns and sales allowances [more…]

Monitoring Accounts Receivable and Recording Business Losses

It’s important for businesses to closely monitor Accounts Receivable to minimize the recording of business losses. One of the bookkeeper's crucial responsibilities is to make sure customers pay their bills [more…]

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