Financials

Owning your business is one of the best way to save on taxes. When you are a W-2 earner, you pay taxes on every dollar earned. As a business owner, you only pay taxes on your net profits. Your net profit is the difference between what you bring in and what you spend in building your business. This means you owe taxes on what is left and not all you

As a business owner, you have probably wondered why your income sometimes says you make more money than you have in the bank. There are many reasons why business profits don't equal cash and I will be discussing a few of them. Operations This is cash received from or used in the business main operations. A well run business main source of cash will be from operations. In running your

Before I answer this question, let us examine the main goal of accounting. Accounting should provide useful information to stakeholders. This information should be useful for taking meaningful actions. This means you have to cost out your business as if nothing is received for free. In the long run, it is going to be impossible to run your business unless you can cover "all" costs. Using wrong cost information will

Accounting is the language of business. To make good business decisions you need to understand this language. Take for instance the difference between the cost of making your product and the cost to support the existence of your product. Both are vital information but mistaking one for the other could be very costly mistake. Cost of making your product The cost of making your product also called your product cost

Everything you do has a consequence: For every action there is a reaction. Every ball you throw up will eventually come down. In some cases, the consequences are instant and in other cases, the consequences are delayed. For instance, people often find it easy to overspend because the consequences of debt do not happen overnight. It is the same with overeating. When consequences are delayed, being disciplined takes more will