Accurate Payroll from Their Employer Is KeyEvery time you state what you want or believe, you’re the first to hear it. It’s a message to both you and others about what you think is possible. Don’t put a ceiling on yourself.” - Oprah Winfrey As a business owner your current and future staff depends on you to process their payroll accurately and timely. Therefore it is important for a business owner to decide if this process will be managed internally or externally by a third party. Even if the vast majority of your payroll process in issuing 1099s, their must be a process outlined and defined. In the world of Accounting, payroll refers to the amount paid to employees for services they provided during the period.
A company's payroll is important for the following reasons:
Just think? Salary usually refers to payment for managerial and administrative services. Salary is normally expressed in terms of a month or a year. Wages usually refers to payment for employee manual labor. The rate of wages is normally stated on an hourly or a weekly basis. The salary or wage of an employee may be increased by bonuses, commissions, profit sharing or cost-of-living adjustments. To illustrate computing an employee's earnings, assume Karen Douglas is a office manager employed by Fontenot & Associates Solutions LLC. Karen's regular rate is $55 per hour, and any hours worked in excess of 40 hours per week are paid at 1 1/2 times the regular rate. Karen worked 45 hours for the week ended June 10. Her earnings are as follows: Earnings at regular rate (40 hrs. X $55) = $2,200 Earnings at overtime rate [ 5 hrs X ($55 X 1 1/2)] = $413 Total earnings $2,613 We all can agree that this is one process that can be straight forward or very complex due to the many factors such as taxes, which makes the matter very serious for all employers. Developing an extensive business guide to support the responsible professionals with monthly deadlines and compliance regulations should be a focus for this weeks goals and significant business accomplish.
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Try, try, try, and keep on trying is the rule that must be followed to become an expert in anything. – W. Clement Stone The income statement reports a corporation's net income for the period of time indicated in its heading. The income statement is also known as the statement of income, statement of earnings, statement of operations, profit and loss statement, or P&L.
The historical cost principle means that most of the amounts shown on the income statement reflect a corporation's vast number of actual transactions that were recorded by the accounting system. In addition the income statement will include some adjusting entry amounts entered by the accountant in order to comply with the accrual method of accounting. Revenues Revenues are the amounts earned by a corporation through its main activities such as:
Continue to educate yourself about the accounting profession and how it relates to your business and it's growth. Fontenot & Associates Solutions LLC supports companies with training of new staff and the accounting basics. Start with us here! Accounting Processes and Your BusinessHow often do you go looking on the web or written publications for the right information to get started with something you have thought long and hard about? Then the next question to yourself becomes how relevant is the information you have gathered to rely on. As always, we are here to share relevant information you, as a business owner, need to know! Accounting processes within your business are relevant because it makes difference in a business plan and decision. Information is considered relevant if it provides information that has predictive values, that is, helps provide accurate expectations about the future, and has confirmatory value, that is, confirms or corrects prior expectations. How you outline your accounting processes today, tells those who come to partner, invest or support the business more about your culture and future plans? Our mission at, Fontenot & Associates Solutions LLC, is to support businesses close process gaps with unique solutions. The process gaps are unique to each companies business so thus should the solutions put in place to close them. When building your brand and establishing accounting processes, here are just a few things the leader should remember and clearly define within the business guide.
It's never too late to get started, start here with us! Formal education will make you a living; self-education will make you a fortune. – Jim Rohn As a small business owner the thought of financial statements and/or financial reporting may seem challenging for you to understand. Don't allow that fear to keep you from reading this article. As an entrepreneur, understanding your very own financial statements, just as well as your accountant, is what will help define future goals and success. Let's take a look at what financial reporting includes and what it means for your growing business? Financial reporting includes the following:
A small business uses cash flow statements to report the inflow and outflow of the business. The inflow is the cash or revenues that come into the business through the sale of commodities; the outflow is the cash used in the daily operations of the business. This inward and outward flow of cash is important to keep a business in operation. Without sufficient inflow, then the business will lack cash to pay for expenses and to purchase inventory or stock. To establish your business policy and procedures today, visit our website. It's never to late to get started! Source:AccountingCoach Better understated than overstated. Let people be surprised that it was more than you promised and easier than you said. – Jim Rohn How much do you know about problems that occur in the oil and gas industry? The workmen in the field have to complete many phases to ensure a well gets to the producing phase. If there is a delay, it can be for reasons we have identified and shared below. Workover operations generally involve using a special workover rig to restore or stimulate production from a particular well. A situation in which a workover may be necessary would be an open hole completion where sand from the producing formation has clogged the tubing end, reducing or completely cutting off the fluid flow from the producing horizon. A workover may also be necessary when the casing has been perforated, and rock or sand particles have clogged the openings in the casing. Other problems and oil and gas company may encounter is regarding damaged or lost equipment and materials. Equipment or materials may be damaged or lost during the drilling process. Some examples of damaged equipment would be twisted drillpipe or broken bit. Examples of lost equipment include parts of the drill bit, hand tools (e.g., wrenches) and drillpipe twisted off downhole. If the well is an exploratory well, the cost are expenses or capitalized, depending upon whether the well is unsuccessful or successful. The oil and gas industry offers great opportunities to learn a wide range of rules, regulations and professional growth. Learning is key for any industry, thus I encourage you to never stop learning and to take on opportunities that allow you to learn more. Logic will get you from A to B. Imagination will take you everywhere. – Albert Einstein While many differences exist between nonprofit and for-profit businesses let's give focus to the accounting world of them both. For example, one of the well-known factors between the two business is related to tax exemptions. One difference in the balance sheets of a nonprofit or not-for-profit organization and a for-profit business is the name or title shown in its heading. In a nonprofit, the name of this financial statement is the statement of financial position. In the for-profit business this financial statement is the balance sheet. Another difference is the section that presents the difference between the total assets and total liabilities. The nonprofit's statement of financial position refers to this section as net assets, whereas the for-profit business will refer to this section as owner's equity or stockholders' equity. The reason for this difference is the nonprofit does not have owners. This means that the nonprofit organization's statement of financial position will reflect this equation: assets – liabilities = net assets. The net assets section will consist of the following parts: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. The amounts reported in each of these parts are based on the donor's stipulations. The difference in financial statements is just one of the many reasons why extensive policies and procedures are a key tool when establishing and building a business or brand. Fontenot & Associates Solutions LLC can start the process of developing your business policies and procedures virtually, no need to delay any further. Source:AccountingCoach The function of leadership is to produce more leaders, not more followers. – Ralph Nader Knowledge is key when building a business or team. A great way to build knowledge can start with incorporating your business history and important facts and definitions within the company policies and procedures. Management will see it build company awareness and team cohesiveness. Just know, it's never to late to start. Below is a financial definition and example: An outstanding deposit refers to a company's receipts (cash, checks from customers, etc.) which have been recorded by the company, but the amount will appear on its bank statement at a later date. An outstanding deposit is also known as a deposit in transit. To illustrate an outstanding deposit, let's assume that on October 31 a company received cash and checks from customers in the amount of $800. Clearly the company should report the $800 as part of its cash as of October 31. However, the company did not deposit the $800 into its bank account until after October 31. Since the $800 is not on its bank statement as of October 31, the $800 is described as an outstanding deposit or deposit in transit as of October 31. The $800 outstanding deposit is pertinent to the company's bank reconciliation as of October 31. When the company reconciles the bank statement, the outstanding deposit is an addition to the balance shown on the bank statement as of October 31. (There is no adjustment to the balance per books since the $800 had been recorded as of October 31.) Understanding how receipts should reflect in your business financials is important for business owners when they want to know how much cash they have on-hand or available. Visit our website today to get your business started on developing or improving policies and procedures. Source:AccountingCoach
In the Oil and Gas industry one of the common related cost is Production Cost. Theoretically, the production cost are part of oil and gas produced and, therefore, allocable to inventory and cost of goods sold. However, crude oil and natural gas inventories are usually insignificant and not recognized on E&P company balance sheets. In accounting for production costs, one of the first requirements is to determine the functional accounts that will be used. The accounting system must provide information in sufficient detail to permit accounting cost in accordance with recognized accounting principles and at the same time meet the needs of operating personnel in evaluating operations. In accounting for production costs, it is also essential that the accounting records furnish the necessary data for federal income tax purposes. Production cost are expensed as incurred except in two cases:
Fontenot & Associates Solutions has the skills and knowledge to support companies establish policies and procedures with extensive detail and definitions. Visit our website today. Source:PetroleumAccounting
When building your start-up business, equipment is purchased to get you started. When it's time to lease office space additional equipment is purchased to keep the business moving forward. How are business owners accounting for these purchases. Learn more about the best practices and an example below. The purchase of equipment that will be used in a business is not reported on the profit and loss statement. However, the depreciation of the equipment will be reported as depreciation expense on the profit and loss statements during the years that the equipment is used. For example, if a company buys equipment for $100,000 and it is expected to be used for 10 years, the company's profit and loss statements will report depreciation expense of $10,000 in each of the 10 years (assuming the straight-line method of depreciation is used). The purchase of equipment is shown on the statement of cash flows for the period in which the purchase took place. The equipment will also be reported on the company's balance sheets at its cost minus its accumulated depreciation. The profit and loss statements are also known as income statements, statements of operations, and statements of earnings. Establishing policies and procedures to ensure the accounting process for reporting equipment purchases is a key tool to avoiding company losses in the future. Visit our website today to schedule your appointment. Source: AccountingCoach If everything seems under control, you’re just not going fast enough. – Mario Andretti As a non-profit are you categorizing your fundraising expenses accurately? These expenses should relate to the non-profits classification as specified with the IRS. It is a key tool to establish proper policy and procedure guidelines to ensure those supporting the non-profit organization are following the required guidelines. "Fundraising expenses are defined as a subgroup of a nonprofit's supporting activities expenses. This functional expense classification is used for the fundraising activities including fundraising campaigns, mailings for funds from supporters, and other solicitations for contributions. It may also include an allocated portion of the executive director's salary and benefits plus other management and general expenses." In addition, a non-profit should be reporting funds by functions - what does that mean? For a not-for-profit organization, the reporting of expenses by function means the statement of activities will report expenses according to the following functional classifications: 1) each of its major programs, and 2) the supporting services which are a) management and general, b) fund-raising, and c) membership development. Just as there is a high rate of failure among business startups, charities can go under just as quickly. That's why founders of new charities and existing organizations must think long and hard about the how, why, where, and when. Below are just a few common mistakes tips business owners should avoid.
A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them. – John C. Maxwell |
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