QOE Report A QOE Report, aka Quality of Earnings Report, analyzes a company’s financials to check if the business is profitable. For example, a tech startup can show big profits after one project, but a QOE report can suggest that the company isn’t as profitable as it looks. When assessing a company’s financial health, it’s […]
Accounting Performance Indicators Accounting performance indicators illustrate how the business is performing financially. These indicators are profit margin, return on investment, or cash flow. Understanding APIs is like keeping an eye on your car’s dashboard. You don’t need to know every mechanical detail under the hood—you need to pay attention to the indicators that tell […]
Average Cost vs. Standard Cost Average cost determines the total amount of product purchased in a given period. On the other hand, a standard cost estimates the actual costs of a company’s production process. For example, a small business may set the standard cost of a donut at $5, but the average cost can be $7 […]
What are Accounting Gifts? Accounting gifts refer to financial or tangible assets without expecting anything in return. It reminds us of Oprah’s “You get a car! You get a car!” A business owner may give their employee an accounting gift as a bonus. The important part is to keep track of taxes, as some gifts […]
What is an Exemption Trust? An exemption trust reduces the estate taxes of a married couple when one of them passes away. When the first member of the couple dies, the assets are placed in a trust. When the surviving spouse dies, the assets are distributed to the trust’s beneficiaries, typically the children, who don’t […]
What is AOP in Finance? AOP, aka Annual Operating Plan, is a business roadmap for a year. It outlines expenses and expected revenues for the year. For example, if your small business aims to increase sales by 30%, the AOP will detail marketing, hiring, or any other spending you will do in one year. It […]
Yellow Book Audit Vs Single Audit A Yellow Book Audit is a specialized audit designed to assess the financial statements of an organization while also evaluating its internal controls and compliance with funding requirements and generally accepted accounting principles (GAAP). Unlike a standard financial audit, a Yellow Book Audit is conducted under both Generally Accepted […]
What Happens to Cash When Selling a Business? When selling a business, the cash stays with the seller unless negotiated otherwise. Cash is not considered an asset but part of the sale proceeds. Suppose you sell your restaurant and keep the $50,000 in the business bank account. That $50k goes to you. It might seem […]
Buying Into an Existing Business as a Partner When you buy into an existing business, you purchase a share of ownership in an established business. This way, you become a partner and receive profits based on your ownership percentage. For example, you buy an existing coffee shop with 30% ownership. If the monthly profits are $100k, […]
Difference Between CPA and CFO Think of a CPA and a CFO as two different kinds of financial doctors for your business. A CPA is like your general physician, focused on diagnosing tax issues, keeping financial records in check, and ensuring you don’t overpay the IRS. A CFO, on the other hand, is more like […]
