Goodwill is the portion of the purchase price that is greater than the fair market value of the assets and liabilities of the company that was bought. Goodwill is meant to capture the value of a company’s brand name, customer base, relationships with stakeholders, and employee relations. Companies must also periodically review their intangible asset […]

For instance, if you sell a product for $100 and the unit variable cost is $40, then using the formula, the unit contribution margin for your product is $60 ($100-$40). This $60 represents your product’s contribution to covering your fixed costs (rent, salaries, utilities) and generating a profit. Let’s examine how all three approaches convey […]

This figure includes the par value of common stock as well as the par value of any preferred shares the company has sold. Shareholder equity is one of the important numbers embedded in the financial reports of public companies that can help investors come to a sound conclusion about the real value of a company. […]

With so much of the heavy lifting handled on their behalf, HappyCo could focus on bigger variables related to their growth initiatives. Rolling budgets come with a number of advantages for SaaS businesses, such as providing an accurate picture of the company’s financial state and supporting increased financial agility. In contrast, in a flexible budget, […]

Then, when the customer pays, the accounts receivable account is decreased; revenue is not increased because it was already recorded when it was earned (not when the payment was received). For example, a company buys pairs of shoes for $60 and sells each pair for $100. If the company sells two pairs of shoes to […]

Here’s a guide on what invoice numbers are, why they matter, and how to set up an invoice numbering system for your business. But as you begin a new accounting period, the invoice number starts with the number after the last invoice number. For instance, if calendar year 2024 ended with invoice number 1120, the […]

Deferred tax assets represent potential future tax benefits resulting the state of marriage equality worldwide from temporary differences between taxable income and accounting income. Temporary timing differences create deferred tax assets and liabilities. Deferred tax assets indicate that you’ve accumulated future tax deductions—in other words, a positive cash flow—while deferred tax liabilities indicate a future […]

Bookkeeping solutions play a crucial role in the success and growth of any business, regardless of its size or industry. In this guide, we’ve explored various aspects of bookkeeping services, highlighting their importance and the benefits they offer to businesses. These integrations will enable businesses to interact with financial data more intuitively and efficiently. Consider […]