Posts by Preston Smith

Managing cash flow is one of the biggest issues that small businesses face today. Outstanding receivables are one of the hardest parts of this process to manage. Invoice Factoring has become an increasingly popular way of handling these issues.   What is Invoice Factoring & How Does It Work? Invoice factoring is a practice where…

Tax Deductions for the Self-Employed Being self-employed can be intimidating, but it doesn’t have to be. Self-employed individuals have certain tax breaks and credits that are available to them. These deductions alleviate some of the burden placed on these taxpayers. To take full advantage of these deductions, self-employed taxpayers need to research what is available…

Accounting departments use an eight-step process called the accounting cycle to record and report their company’s transactions. The accounting cycle process is usually standard across different companies, though the period in which it is conducted can vary. This article details how the accounting cycle is managed, and the steps it involves.   Managing the Accounting…

To examine the fairness and accuracy of their operations, companies will conduct audits. There are two main types of audit: in-house (or internal) and external audits. This article details the differences between in-house and external audits, including their purpose, focus, and the parties that they involve.   Auditing Basics Companies conduct audits to check their…

Businesses can account for the costs of their goods and services using different methods, two  of which are job order costing and process costing. While both methods allow businesses to accurately record their manufacturing costs, they are used for different purposes and situations. This article details the process of job order costing: what it entails,…

Contra accounts are accounts listed on the balance sheet that have an opposite—or contrary—associated account. These contra accounts capture the opposite balance of their associated accounts in order to allow the original account to reflect a more accurate value. When the two accounts are listed together on the balance sheet, they reflect the net value…

One of the most important decisions that a company makes in its formative years is the method of accounting that it will use. The method of accounting dictates month-end procedures and certain liability and asset balances. The method of accounting chosen by a company may also create additional book-to-tax adjustments if the financial and tax…

In the Tax Cuts and Jobs Act (TCJA) of 2017, Congress decided to limit the deduction that a business may claim for its interest expense to 30% of “adjusted taxable income”. This limit allowed Congress to raise tax revenue over the course of the next several years in order to allow them to make cuts…

Financial Accounting vs. Managerial Accounting When it comes to examining and reporting the financial health of a company, there are two main accounting processes that companies use: financial and managerial accounting. While these two methods may seem related, they differ greatly in their purpose, process, and use. This article overviews the main differences between each method and details…