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

What to Do If You Need Cash Quickly

Source Emergencies happen. Bills are due, but you don’t have sufficient funds in your account to cover them all. Unfortunately, failing to make a payment could negatively impact your credit score and result in you owing more thanks to late and various other fees.  You can try calling your respective creditors or service providers to discuss your options. What if they’re not understanding, though? You need to know how to get money in your bank account, stat, or you might lose...

An Introduction to NSF Fees: Why Were You Charged?

Photo by Oliur on Unsplash If you’ve been in a similar scenario, you’re not alone: you write a rent check for $800, only for the check to bounce. You could have sworn you had at least $1,000 in your account, but alas, you were a few dollars short, so you have what is called “nonsufficient funds.”  You apologize to your landlord, but to rub salt in the wound, you now have an additional $34 charge on your account! This fee is...

Is Overdraft Protection Worthwhile?

Imagine you are checking out at the grocery store, ready to buy a carton of eggs. It’s a small purchase — maybe $2.75 for a dozen. You hand over your debit card, completely forgetting that you only have $1 currently in your checking account.  This scenario can go one of two ways: if you have overdraft protection, the transaction will go through, and you can walk away with your eggs. If you don’t, though, then your card will decline, and...

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 draw up a corporate budget in terms of the subdivisions

Someday any large enterprise with the managerial accounting will need to draw up an expenditure budget for the subdivisions.   There are few ways of expenses planning if considering the work of the subdivisions, but I would like to mention one of them which I find the most effective and quite simple:   Economic Department distributes the form of the expenses plan for the period (month, quarter, year) to the heads of structural subdivisions. This form is similar to the form of the profit and loss account, but each expense item...

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...