Archive For The “Finance” Category

Why Should You Become An Entrepreneur?

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Why Should You Become An Entrepreneur?

Becoming an entrepreneur can be expensive and takes some detailed thought. Having said that, there are ways to become a business owner without going into bankruptcy.

Most people depend on what they pull in each year to live on which means that they don’t have enough to plan a business venture, much less fund one. In that case, there are other avenues to travel in order to try and get enough money to begin the business start up.

First, anyone wanting to start fresh should make sure that they have less debt attached to their name instead of more. Check your finances thoroughly and recheck them again. The more capital you have to use on your own, the less you’ll have to borrow from some other source. If in fact you do have to borrow funds, check first to see if you can borrow against what you already have; your 401K plan, yearly savings account or some family inheritance.

If those avenues don’t bring you enough to begin, then perhaps a small business loan or an asset based loan is in order. In this case, check with the Small Business Administration, to see what they can offer you. Make sure that you have all of your paperwork in order when you contact them. You’ll need your previous year’s taxes, household accounts, school loan paperwork, and any other places where money is being held up. Also, your car payments, mortgage payments, and insurance payments, all play a role in helping the Small Business Administration determine your eligibility.

If this source is lacking in funds, and sometimes they are, then check into the local businesses in the area to find out where they got their funding from. They are usually so proud of their success they won’t mind sharing some knowledge with …

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If There Weren’t Two Accounting Methods You’d Have To Make Them Up!

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If There Weren’t Two Accounting Methods You’d Have To Make Them Up!

As any textbook on accounting methods will tell you, there are two main methods by which companies record their financial transactions in their books. They call one cash-basis accounting, and they call the other accrual accounting.

If anyone asks you what the difference between the two accounting methods is, the most important one is this – they record cash flow differently, as James Smith from James Milne Accounting. explains. The simple differences in the way in which these two accounting methods deal with cash flow can open the way to a lot of manipulation. You’ve heard a lot about Enron and how they cooked their books, haven’t you? A lot of that happened because they try to pull the wool over their auditors eyes do with which one of the, the methods they were using.

A company that uses cash basis accounting, when expenses occur, will record them only when the cash is actually spent. They will only record money coming in when the monies actually come in and it’s sitting at their bank accounts. So if the companies finished a project today but they won’t get paid for it until the following month because they extend credit, they won’t get the records that doesn’t come. If the next month is January and falls in all new year, they only get to recorded as income for the next year. Even if it was earned this year.

Small companies usually use cash basis accounting because it’s much simpler. Usually, startup companies and single-proprietor stores use this method.

Accrual accounting leaves a lot more to the imagination. Whatever they have due to them, they’ll record as income already received. If they do a job for a deadbeat client, they’ll still get to record that as income and not be …

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