During the pandemic, many employees have postponed using their allotted paid time off until COVID-related restrictions are lifted and safety concerns subside. This situation has caused an increase in accruals for certain employers. Here is guidance to help evaluate whether your company is required to...
Roughly half of chief financial officers (CFO) believe an economic recession will hit by the end of 2020, and about three-quarters expect a recession by mid-2021, according to the 2019 year-end Duke University/CFO Global Business Outlook survey. In light of these bearish predictions, many businesses...
Distinguishing between liabilities and equity on a company’s balance sheet may seem straightforward. But difficulties arise when it comes to the terms of complex securities and financial contracts like redeemable equity instruments, equity-linked or indexed instruments, and convertible instruments. The good news is that the Financial...
Every business experiences occasional cash shortages. When this happens, owners often assume they should go out and sell more. But this strategy can sometimes compound money troubles over the short run. Why? The answer lies in a concept known as the ‘cash gap.’ Understanding this...
Financial statement auditors spend a lot of time evaluating how their clients report work in progress (WIP) inventory. Here is why this account warrants special attention and how auditors evaluate whether WIP estimates seem reasonable. What is Work in Progress Inventory? WIP inventory is defined as the...
Need cash in a hurry? Here is how business owners can look to their financial statements to improve cash flow. Receivables Many businesses turn first to their receivables when trying to drum up extra cash. For example, you could take a carrot-and-stick approach to your accounts receivable...
It is important to resist the temptation to rely on gut instinct or take shortcuts when budgeting for 2018. Creating a solid budget that is based on the three components of your company’s financial statements will help you manage profits, cash flow, and debt. Income...