Posts Tagged ‘balance’
Monday, August 30th, 2010
Liabilities: What your company owes
The second part of the balance sheet equation consists of liabilities. The more common term is DEBT.
The Definition
Like assets, liabilities are divided into two categories, short and long term, with numerous subcategories. They include all debts and obligations owed by the business to outside creditors, vendors, and banks.
A company’s A/P, payroll, payroll taxes are considered short term. The balances are due and will be paid within one year or less. Long term liabilities, could consist of mortgages on buildings, startup loans, and vehicle loans. Remember if a company is supplying a balance sheet for an outside source, such as a lender, the current portion (one year from the current date) of these long term liabilities should be recorded in the short term section.
Tags: Assets, balance, Balance Sheet, business finances, Current Assets, debt, Financial Statements, Fixed Assets, liabilities, long term, Long term assets, short term, small business
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Monday, August 23rd, 2010
Assets: What your company owns 
The items that a company owns are called assets and are divided into two categories, current and long-term and within these two categories are several sub groupings.
How does one decide which asset account an item should be placed in? A good determination would be how fast you can turn it into cash if you need to. The things that can be turned into money in your pocket within a short period of time belong in the current section and the assets that would take a minimum of three months to sell belong in the long term classification.
Obviously cash and savings are current assets, but so are your accounts receivable (as long as you usually collect them within 30 days) and inventory (as long as you turn it within 30 days).
Your office building and company vehicles are long term assets. With the real estate market having an abundant inventory of office buildings and the penny saver having hundreds of trucks for sale these assets are not a good place to look for fast cash.
Tags: balance, Balance Sheet, business finances, Cash Flow, Current Assets, Financial Statements, Fixed Assets, Office Building, Vehicles
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Wednesday, August 18th, 2010
Let’s get down to the simplest definition of a balance sheet. 
A Balance Sheet represents a simple equation: what your company owns (Assets), minus what your company owes (Liabilities), equals what YOU own. This is the same principle that applies in one’s personal life. You own a car, a boat, a house, personal items in the house, but you have a mortgage, a second mortgage, a car loan, and some credit card debt. You may even owe some money to a relative or friend. So like a company, you’re net worth is the amount of things you owe, less the amount you owe on them.
Tags: Assets, balance, Balance Sheet, business coaching, business finances, Cash Flow, Current Assets, Financal Statements, Long term assets, small business
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Tuesday, July 13th, 2010
There are three reports that make up the cornerstone of a company’s financial statements. They are the Balance Sheet, Income Statement and Cash Flow Statement.
The Balance Sheet is a snapshot of a company at a precise moment in time, while the Income Statement summarizes the company’s sales and expenses over a period of time, (monthly, quarterly or yearly). Like the Income Statement, the Cash Flow Statement is a report on a company’s activities over a period of time; however its purpose is to show how much cash comes in and goes out of the business. On the surface the Cash Flow Statement might sound a lot like the Income Statement but, as you will see, there is a big difference between the two.
So, as you might have guessed, the next series of financial blogs are going to dig deeper into these essential three statements that every small business owner must understand in order to effectively manage his or her company.
Tags: balance, Balance Sheet, business, business finances, Cash Flow, Financial Statements, Income Statements, small business, Statement of Cash Flow
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Monday, April 12th, 2010
Debit or Credit? You are probably asked this question every time you are at a checkout counter after reaching for plastic. So which should you use? There are advantages to both, but your choice should be credit as long as you are disciplined in paying off the balance right way. Here are some advantages of a credit card.
- If you pay the balance off each month you can get up to a 40 day free loan (float), the time between when a purchase is made and when you actually pay your bill. Good for your company cash flow.
- You have the option of withholding payment should you be unsatisfied with the quality of a purchase.
- The Fair Credit Billing Act means you have zero liability for fraudulent purchases, poor quality or damaged merchandise, or for merchandise that was never delivered. With a debit card the purchase is taken out of your checking account and is not returned until the transaction in question is resolved. This could severely impact your cash flow.
- Credit card users are not required to pay any amount that may be in dispute.
- You don’t run the risk of overdraft fees, as you can with a debit card. So if you’ve had problems avoiding those overdraft fees, paying just one annual fee to a credit card company may be less expensive in the long run.
- Credit cards allow you to improve your company’s credit score, because you’ll build a history of paying on time.
Still choose debit; then make sure you have a discussion with your banker about not allowing charges to be accepted if funds are not available in the company checking.
Tags: balance, Banking, business, business finances, Cash Flow, Credit Card, Debit Card, Overdraft Fees, small business, work smarter
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Monday, April 5th, 2010
Now that you have a budget, review it on a regular basis. As the year goes along start another version of your budget. Replace the estimates with the actual results of your work. Most owners tend to manage spending and overestimate earnings. Use your budget instead, it is a powerful tool and will give you good information on whether or not you are on track.
If you feed your budget with real number it will give you an instant view of your progress. Most of the CEO’s of the world are doing exactly that. Of course financial aspects are important, but they cannot replace your vision. However, your budget can bring you back to earth if your visions are too elaborate.
Tags: balance, Budgeting, business, business finances, Business Resolution, company vision, management, small business, Well planned budget.
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Monday, March 29th, 2010
Now it’s time to budget for the costs that happen now and then within your company. Are you planning something different this year that you have not tried in the past? For example:
- Are you planning on an intensive marketing campaign to go with the increased sale you have budgeted?
- Are you planning on purchasing new equipment this year? If so the depreciation will be an adjustment to your costs.
- If you have budgeted increased revenue for the year, will you need more office staff? Will you need a bigger sales force?
- With increases in employees also comes an increase in consumables like office supplies, gasoline for the delivery vehicles, cell phones, and yes even more coffee for the break room.
- An easy way to estimate these types of costs is to take the cost in each category from last year and divide by the number of employees. Now take the amount spent on each employee and multiply by the amount of total employee budgeted for this year. Once you have this number you can tweak the numbers to keep your margin in line with your projections.
Tags: balance, Budgeting, business, business finances, Business Resolution, company vision, goals, small business, Well planned budget., work smarter
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Saturday, March 27th, 2010
With almost every client I coach, we inevitability lead to talking about this one. For some, it means carving out enough time from their busy family life to actually work, especially those who work at home. For other, it means actually stop working and go home and enjoy the other side of their life.
The magic key? Priorities. If you family is your priority, you may not be able to grow your business as fast as you may want. If you want major business growth, some part of your personal life may get short changed. There are many ways you can minimize this, but the first is to decide what you really want.
I grew up in the era of women thinking they could have it all. We were wrong. Our moms had their family; many of our daughters have their careers. We tried to have both – and almost killed ourselves. So when looking for work life balance; look no further than what you really want today from your life. It might (and probably will) change down the road, but for today you need to be content with your choices.
Next week we will talk about some ways to try to have a little more of both…
Tags: balance, business coaching, work smarter
Posted in Business (including coaching) | No Comments »
Tuesday, March 9th, 2010
I recently had the opportunity to write a business article about my personal experience as I took the leap from Stay-at-Home-Mother to Woman Business Owner.
I shared many of my own struggles as I attempted to balance both my family and a growing business. Those struggles have taught me a few important, but basic life lessons which helped push me forward when I felt like I couldn’t take one more step:
- Set clear boundaries
- Be content with “good enough”
- An organized schedule is as important as an organized space
- Keep a sense of humor
I have made more than my share of parental mistakes and have had plenty of bumps along the way these past few years. It helps to remember to keep moving forward, chuckle a little at myself, and remember that life isn’t about being perfect. It’s about being human.
Read the entire article: http://bit.ly/Women-in-Business.
I would love to hear how you have coped with your own balancing act between work and home. Perhaps you will inspire other women business owners to “hang in there” along the way.
Until next time,
Happy organizing!
Tags: balance, business, organized, small business, stay-at-home-mother, women, work
Posted in Organizing | No Comments »