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One reason that a lot of accounting reports are hard to understand for business owners is the chart of accounts is too detailed. There might be a number of accounts used that only contain a few transactions a year, and keeping these transactions separate doesn’t add any value to the report user’s decision-making process. This results in long, convoluted statements that aren’t useful for the business owner. A good rule to follow when building your chart of accounts is to ask

When is the last time you looked at your accounts receivable aging report? Many small businesses that are profitable on paper often struggle for cash, and a frequent culprit for this is a pile of overdue payments from clients/customers. Remember, sales do not equal cash! Making a sale and collecting payment are two distinct business activities. I know it can feel icky to contact clients about past-due amounts, but your business can’t survive without taking care of collectio

There’s a lot of talk these days in the spaces I occupy about artificial intelligence in accounting. Specifically, people ask “Why would anyone hire an accounting advisor when they can just use a generative AI platform for direction?” There are a couple reasons why I firmly believe that human advisors are still very much needed. One, while it’s true that anyone with a ChatGPT account can input their question and get an answer, not everyone knows the best question to ask. Tha

In the world of entrepreneurship, the allure of paying yourself dividends can be incredibly tempting. After all, you've invested time, effort, and resources into your venture, and it's only natural to want a return on that investment. However, financial prudence dictates a different course of action: paying off business debt should come before rewarding yourself with dividends. The Domino Effect of Debt Debt is like a ticking time bomb in the financial structure of a business

In the financial landscape, two terms often emerge: "expense" and "investment." While these terms may seem interchangeable, they actually represent different things. Expense An expense can be understood as an outlay of money for items or services that offer immediate or short-term benefits. Examples include your rent, software subscriptions, or fuel for a fleet vehicle. These are costs that recur and are essential for day-to-day operations. However, once the money is allocate

Picture this: business is booming. You can’t keep your stock on the shelves, or there’s not enough hours in the day to serve all your clients. Sounds like a good problem to have! It’s certainly better than the alternative – not enough business to keep the lights on. You have three options to respond to this scenario: Do Nothing Make no changes, get burned out, lose customers due to frustration over not being able to access your goods/services, and leave money on the table. Ob