Let’s look at how to calculate a reorder point both with and without safety stock. Then we’ll cover how to handle reorder points when you have multiple vendors. Set the supply planning parameters in a way that one can simulate the impact on the overall supply plan. When using supply planning systems, inventory parameters are […]

By disclosing material information, companies build trust and credibility among their stakeholders and contribute to the overall integrity of the financial markets. The full disclosure principle states that information important enough to influence the decisions of an informed user of the financial statements should be disclosed. Depending on its nature, companies should disclose this information […]

Likewise, some are part of overhead—the amount you pay every month just to stay in business, regardless of sales, such as rent. Other operating expenses are operating costs—they increase in tandem with the amount of sales you make. Horizontal analysis makes financial data and reporting consistent per generally accepted accounting principles (GAAP). It improves the […]

She has written legal and marketing content and communications for a wide range of law firms for more than 15 years. She has also written extensively on parenting and current events for the website Scary Mommy. From University of Wisconsin–Madison, and she lives in the Chicago area with her family. No, it is relatively easy […]

Comparing and analyzing variances in your budget vs. actual performance can provide valuable insight into where your money is going and help you make informed spending decisions. When calculating variances, you might fixate on percentages and lose track of amounts. Some expenses are a larger proportion of overall costs than others. Seemingly small percentage changes […]

To conclude, the drawing account is important in accounting that every individual running an unincorporated firm should understand. Drawing accounts are a distinct component of the double-entry accounting system and are used to record transactions that are unrelated to daily business activities. Thus, drawing accounts are temporary accounts in which transactions are recorded until they […]

Apple pays for rent ($600) and utilities ($200) expenses for a total of $800 in cash. Current assets and liabilities can be converted into cash within one year. However, each partner generally has unlimited personal liability for any kind of obligation for the business (for example, debts and accidents). Some common partnerships include doctor’s offices, […]

In that case, you will likely owe the employee the value of their PTO in cash as part of their final paycheck. It’s smart to keep a close eye on the payroll expenses  that have accrued over a pay period, even if the checks haven’t gone out yet. Holiday pay for the leave accrued should then […]