THE WEBSITE IS ABOUT MANAGERIAL ACCOUNTING. EXPLAINED IN PLAIN LANGUAGE. ABOUT ACCOUNTING WITH LOVE

Best Practices for Effective Remote Working

Source As the world hunkers down to weather the spread of the novel coronavirus (COVID-19), work is shifting gears as well. In many industries, working from home (WFH) is going mainstream. It’s a smart way for companies to limit the potential exposure to the virus and keep employees safer while at the same time remaining productive. Working from home is not a new concept. Most of us, especially those in the tech industry, have worked from home occasionally, but it is...

The Complete Beginner Guide to Budgeting

Source Love it or hate it, budgeting is one of the most important parts of managing your finances. While earning more is the only way to get rich for most of us, understanding, managing, and controlling our spending will keep us on track to reach our financial goals. If you are a veteran budgeter or brand new to managing your finances, read on to learn best practices to create, track, and manage your budget. How a Budget Works A budget is a...

How to recognize the proper management accounting

So, if your management accounting is right: You can get Balance sheet and Profit and loss account at the beginning of the month following the reporting one. If you have an ordinary commercial or industrial enterprise without any extraordinary features, you are able to have the statements for the previous month ready within the first 10 days (or even 5 days) of the following one provided your management accounting is proper. Your accountant can explain you in simple terms...

How to Implement Management Accounting

Firstly, let’s clarify: What does Management Accounting mean? This is the type of accounting, the data  of which  serves as a basis for enterprise managers of different levels to make their managerial decisions. How to implement management accounting at an enterprise. Actually, you do not have to do something extraordinary. Stage I.  Determine a person who will perform management accounting. Stage II. Determine the chart of accounts to be used in management accounting. Stage III. Describe all business processes of the enterprise. Stage IV. Approve and adopt...

How to prepare a profit and loss account

This statements is the most interesting for the company management, as it shows the performance of the enterprise for the accounting period.   Let’s examine the simplest form of the statement:       The report is divided into two parts:  Profit;  Loss.   In Profit part we should deduct the cost of the goods sold (line 2) from the sales volume for the accounting period (line 1). This way we get the gross profit (line 3). I insist on using the gross profit rate (line 4), as this is an indicator of your profit share...

How to prepare a cash flow statement.

This statement shows the flow of funds through the bank accounts and cash office of the enterprise. There are two ways how to construct it: Direct method. Indirect method. I will not describe the second method as I have never used it. If you are interested in it, you can visit this page and this one Let’s turn to the direct method. The statement is divided into three sections: Operating; Investing; Financing. The operating section includes the cash flows in terms of basic company’s activity. The investing section shows the...

How to construct the managerial balance sheet

Main financial statement showing the management accounting system and financial position of the enterprise for the accounting period Balance sheet has three functions: Verifying. Informative. Analytical. Now, let’s have a closer look:   1. Verifying.   If your accounts are balanced (that is assets equal to liabilities), it means that all the operations had been posted correctly and there are no mistakes in calculations or those made through lack of attention (i.e. the goods have been shipped, but the debt has not been increased). So, the given balance...

How to verify the managerial statement for the accounting period

Well, your accountant is presenting balance sheet, profit and loss account as well as cash flow statement prepared for the previous month. Even if you trust your employee and find him/her reliable, you should be able to make the express check anyway. First of all, it is necessary to:         1.       Compare the closing balance figures in at the end of the accounting period with the opening balance figures at the beginning of the accounting period.         These figures are to be absolutely identical to each other, up to...

How to keep records in construction for objects using Excel

In this article, we consider a way of maintaining costs for facilities in a small enterprise in construction or other unit production. Please note that this is not a complete accounting method. Full accounting is maintained in specialized accounting programs (such as 1C). But if for some reason you want to keep a “blitz account”, then this method is suitable for you. In fact, this is an accounting of expenses using the cash method, which I write about in the article...

How to keep records in a small trade or any other non-manufacturing enterprise using Excel

In this article, we will overview a method of keeping records and obtaining a profit and loss statement in a non-manufacturing enterprise.PAY ATTENTION! THIS IS NOT A COMPLETE RECORDING METHOD. ACCOUNTING IS KEPT IN AN APPROPRIATE MANNER ONLY IN SPECIALIZED ACCOUNTING PROGRAMS (SUCH AS 1C).That is the simplest way to keep records in a small trade or any other non-manufacturing enterprise. Keeping records in such a way, you will not get a balance sheet and will not see the...