An invoice is a commercial document prepared by the vendor or service provider that indicates a transaction and requests payment for the product or service provided. It serves as a powerful communication tool to ensure proper payment is made in a timely manner. If you want a quick invoice template to use for your business, click…
What is Cost of Goods Sold (COGS) & How To Calculate It
Cost of goods sold (COGS) is an accumulation of the direct costs that went into the goods sold by your company. This includes the cost of any materials used in production as well as the cost of labor needed to produce the good. It does not include indirect expenses such as distribution costs and marketing…
Small Business Accounting: Accrual vs. Cash Methods
When it comes to managing the books of your business, one of the most important decisions you need to make is which accounting method to use. Luckily there are just two options: cash-basis accounting and accrual accounting. With cash-basis accounting, the moment that you pay a bill or receive a check from a customer, you…
Straight Line Depreciation: How to Calculate & Formula
Straight line depreciation is the simplest way to calculate an asset’s loss of value (or depreciation) over time. It is used for bookkeeping purposes to spread the cost of an asset evenly over multiple years. It can also be used to calculate income tax deductions, but only for some assets, like nonresidential property, patents and…
Sales & Use Tax Guide for Small Businesses
Sales tax is a tax you charge to customers when they purchase products or services from you. As a business owner or seller, you are responsible for calculating, collecting, reporting, and remitting sales tax to the appropriate state and local tax authorities. Use tax is a tax that you have to pay if you purchased…
MACRS Depreciation Tables & How to Calculate
MACRS stands for “Modified Accelerated Cost Recovery System.” It is the primary depreciation methods for claiming a tax deduction. Of course, like all things accounting, depreciation can be tricky and it’s impossible to remember all the intricate details. Click below to download our free ultimate guide to Macrs depreciation. Download Our Free Guide If you’d…