Phoenix Arizona CPA | Arizona Tax Accountant | Arizona Income Tax

1. Provide complete and accurate information. Finding missing information and correcting mistakes costs time (and results in additional hours billed).

2. Maintain financial records, receipts, bank, credit card statements, deposit slips. Professionally prepared financial records provide powerful information that enables you to better manage your company. These records and reports enhance your business, so you may have an accurate picture of your financial health to make better business decisions. Read the rest of this entry »

Many people look at accounting and say, “Accounting doesn’t make a lot of sense.” Well I hate to be bold but there is no better way to say, “Hey I’m a moron, I shouldn’t be running a business.” Accounting is the story of your business and you should know not only how to read that story but how to tell the story. There are a lot of complex accounting issues, they can be a nightmare. The chances are that you will never deal with them. Don’t worry about the complex stuff, focus on the larger aspec of accounting. You should be able to understand ninety-nine percent of all accounting issues with just a basic understanding of the principles and constraints. Read the rest of this entry »

Why is accounting so powerful? It is because it is all based off of one simple accounting equation:

Assets-Liabilities-Stockholder’s Equity = 0

Assets = Liabilities + Stockholder’s Equity

Stockholder’s Equity = Assets - Liabilities

Liabilities = Asset - Stockholder’s Equity Read the rest of this entry »

Understanding Financial Statements. The term financial statements refer to a complete set of statements that include an income statement, a balance sheet and a cash flow statement. The Income statement (sometimes also called the Profit and Loss statement or P & L accounts) reflects the profit performance of a business. This statement summarizes sales revenue and expenses and reports on the profit for a period. The foremost thing to understand is whether the business has made a profit or loss and if so how much? Profit or loss is also usually determined for a specific period whether it be a month, quarter, half year or year. Read the rest of this entry »

No matter what the size of your business, one truth remains: cash flow is king. It’s the lifeblood of your business. Yet, while most small business owners know this truth, many still struggle with basic cash flow definitions, fundamentals or management strategies that actually maximize benefits. In today’s uncertain economy, characterized by frequent market fluctuations and ever rising interest rates, many small businesses with limited financial knowledge are struggling to stay alive, let alone thrive. So why is poor cash flow management such a large killer of small businesses? Here are the two main reasons: Read the rest of this entry »

An integrated understanding all of all the three components of a financial statement - Income statement, Balance sheet and a Cash flow statement is required to understand the operations of any business. The income statement reports the Profit or Loss for a period. The balance Sheet reports on the financial position of the business at any time; what the business owns and what it owes. The cash flow statement on the other hand tracks the movement of cash in the business, answering questions such as what has contributed to the cash inflows and what has contributed to the cash outflows. One should not treat all three statements as independent silos but understand the linkages between the statements. Read the rest of this entry »

Can you do your accounting the old fashioned way with a ledger book? Yes, you can, but with all the accounting software out there, why would you?

In general, you probably wouldn’t, but I do know of a number of small businesses that have tracked their accounts in Excel for the first few years while waiting for the company to generate enough cash to buy an accounting package.

I don’t recommend this strategy because basic accounting software is not that expensive and keeping appropriate track of your accounts is important for your business. Keeping a good account allows you to track your profitability by customer, allows you to understand how your employees spend their time, and allows you to understand how your marketing dollars drive your sales. Read the rest of this entry »

Handling accounts of any business is a Herculean task and requires quite a lot of expertise on the part of any accountant or bookkeeper. Due to the lack of time and hurry, many big or small organizations are approaching small business accounting firms, as these are more capable and also offer perfect solutions to any firm’s accounting woes. Moreover, these firms are being preferred upon by large accounting services providers because they provide excellent services than their counterparts. Read the rest of this entry »

Cash flows , both inflows and outflows are the heartbeat of any business. Various groups of people focus on this. Lenders and investors, business managers and last but not the least, investors. More businesses have failed not due to a lack of profitability but due to a lack of cash.Cash is needed for the day to day operations of a business such as purchasing raw materials, paying expenses, paying interest on loans, taxes etc. Stated simply a cash flow statement tracks the movements of funds. Read the rest of this entry »

A previous article, showed the differences between profit and cash flow. Many business people understand the difference, but my previous article highlighted the importance of CASH MANAGEMENT! I will attempt to provide more detail, with regard to cash management, in this latest offering.

The thrust of my articles, attempt to explain the difference between profit and cash. The cash building strategy outlined below, will reflect differently in the books of account of a business. In fact, these reserves will nor reflect on the Profit and Loss/ Income Statement accounts, and yet, it is the most crucial aspect of the finances! Read the rest of this entry »