Bookkeeping

Bookkeeping

How to Do Accounting for Your Construction Business 8 Steps

For contractors managing several projects simultaneously, tracking costs and ensuring profitability for each one can be overwhelming. Overlaps in labor, equipment, and material usage further complicate bookkeeping. With the PCM, construction companies can more accurately match their revenue and expenses to the same accounting period, improving their overall financial reporting. Each construction accounting method provides valuable insight into a project's financial impact that helps ensure projects stay on track, on budget, and succeed. When choosing the right accounting

Bookkeeping

Fixed Asset Turnover Ratios

For example, a manufacturing company may require more fixed assets to produce goods than a service-based company. Therefore, the Fixed Asset Turnover ratio may be lower for the manufacturing company, even if their sales are higher than the service-based company. Another important aspect of the FAT ratio is that it can help businesses make informed decisions about their capital expenditures. However, differences in the age and quality of fixed assets can make cross-company comparisons challenging. Older, fully depreciated assets may result in a higher ratio, potentially g

Bookkeeping

Accounts payable explanation, journal entries, examples

Looking at it another way, if the buyer had to borrow $980 from its bank for the 20 days at a borrowing rate of 6% per year, the interest for 20 days would be only $3.22 ($980 X 6% X 20/365). By paying $3.22 of interest to the bank, the buyer will save paying the vendor $20 and therefore will be better off by $16.78 ($20.00 minus $3.22). If this occurs 18 times in a year, the net annual savings will be approximately $301 $16.78 X 18 times; or $360 per year saved minus the annual interest paid to the bank of $59 ($980 X 6%). Recording Accounts Payable In Journal Entry Wh

Bookkeeping

Social Security Wage Base for 2020 Announced SPARK Blog

Since the employer tax must equal the employee Social Security tax, your share would also be $124. Thus, the total Social Security tax payment that you would submit to the IRS for this employee (for this pay period) would be $248. Both employer and employee pay an equal amount of Social Security and Medicare taxes, totaling 15.3% of the employee’s gross earnings. Employees and employers share the total tax burden of Social Security and Medicare taxes. Half of the FICA tax amount owed is paid by the employer and the other half is withheld from an employee’s paycheck. For wo

Bookkeeping

Consolidate: What It Means in Business and Finance

In the income statement, eliminating intercompany sales and services prevents overstated revenue and expenses, reflecting the group’s true operational success. Similarly, the balance sheet excludes intercompany balances, accurately representing the group’s assets and liabilities. Proper treatment of non-controlling interest refines the equity section, highlighting the portion attributable to external shareholders. This transparency is essential for investors, creditors, and regulatory agencies, offering a clear view of the group’s financial integrity and efficiency. For o

Bookkeeping

How Much Does a CPA Cost: A Clear Guide for Businesses

Client retention is a huge driver of revenue for CPAs, so they may be keen to incentivize you to stick around. Some CPAs might even offer discounts on future services if you write them a positive online review or refer a friend. These services are considered more high-value and specialized than day-to-day accounting services. As such, CPAs will likely charge a higher hourly rate than they would for something like bookkeeping. Whether you decide to hire a CPA or handle your taxes on your own depends on your specific accounting needs. If you need to verify that your financ