McSwain & Company, PS
Furniture, Fixtures and Equipment – and Depreciation
December 1, 2019 · Blog, General Business News, Uncategorized
Disclaimer 
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
December 1, 2019
Published by Service2Client on December 1, 2019
Categories
🖨 Print⏱ 4 min readWhen it comes to determining depreciation for Furniture, Fixtures and Equipment (FF&E), there are many considerations that exist for accountants and business owners. Defining Furniture, Fixtures and Equipment FF&E refers to expenses for business items that are not affixed to the building where that business operates. Real-world examples of depreciable assets include chairs, desks, phones, tables, cabinets, etc., which are used to perform business-related tasks, directly or indirectly. These types of items are associated with long-term use, generally more than 12 months, according to the Internal Revenue Service. Understanding How It Works When it comes to accounting for the expense of the item, it can be depreciated equally and discreetly over its useful life. According to […]
Do you like it?
November 1, 2019
Published by Service2Client on November 1, 2019
Categories
🖨 Print⏱ 3 min readAs the name implies, First-In, First-Out (FIFO) is a way for companies to value their inventory. The first items put into inventory or produced by the company are accordingly the first taken out of inventory or transferred to customers and therefore expensed. When it comes to accounting for acquisition and/or production costs, initial and earlier costs are the first to be expensed, with more recent costs staying on the balance sheet to be expensed later. Assume a company already has 200 widgets costing $4/widget. From there, the company increased its inventory at three more times during a selected accounting period. Three hypothetical, additional purchases include: 200 widgets @ $6/widget 200 widgets @ $7/widget 200 widgets @ […]
Do you like it?
October 1, 2019
Published by Service2Client on October 1, 2019
Categories
đź–¨ Print⏱ 3 min readWith more than 1.4 million accounting jobs in 2018, according to the Bureau of Labor Statistics, there are many different uses for accountants and their skills. With the need for accuracy and transparency in private and public accounting, one important concept to explore is absorption, or full costing. Absorption or full costing is an accounting method that is used by businesses to determine the complete cost of producing products or services. When it comes to calculating the full cost, there are three main categories taken in account: Direct Costs – How much material, labor, machinery, etc. it costs to produce each product. Total Amount of Fixed Costs – Examples include monthly rent payments, tax payments, base […]
Do you like it?
September 1, 2019
Published by Service2Client on September 1, 2019
Categories
đź–¨ Print⏱ 4 min readWhen it comes to an employer’s responsibility for non-exempt workers, according to the U.S. Department of Labor, there are many requirements businesses must follow related to payroll. In one example, there are strict regulations on what information employers must document for each non-exempt worker. While there’s no requirement on how the information is recorded, there are three main categories. Personal details: This should include the employee’s name, complete address, Social Security number, date of birth and gender. Job details: This must include the worker’s job description and hours clocked in each day and week. Pay details: The employee’s hourly wage based on straight time, and how employees are compensated – be it hourly, weekly, project or […]
Do you like it?
August 1, 2019
Published by Service2Client on August 1, 2019
Categories
đź–¨ Print⏱ 4 min readWhen it comes to tracking incoming sales and outgoing expenses, there are many ways businesses can keep up with their invoices and implement strategies to reduce the time they spend on unpaid sales. Accounts Receivable Turnover Ratio Simply defined, the accounts receivable turnover ratio is a way of showing what percent of a company’s receivables or invoices are paid by clients. The U.S. Small Business Administration explains this ratio is determined by “dividing average accounts receivable by sales.” Determining average accounts receivable is done by adding the beginning and ending figures — be it a month, quarter or year, then dividing by 2. Determining the sales figure is calculated by taking the total sales still on […]
Do you like it?
July 1, 2019
Published by Service2Client on July 1, 2019
Categories
đź–¨ Print⏱ 3 min readAccording to data from a U.S. Small Business Administration Office of Advocacy report from August 2018, businesses have varied longevity. Nearly 80 percent (79.8 percent) of business startups in 2016 lasted until 2017. Between 2005 and 2017, the SBA mentions that 78.6 of new businesses lasted 12 months. Similarly, nearly 50 percent lasted at least five years. While there are many reasons why a company goes out of business – one is profitability. Knowing when the business is breaking even and will start making a profit can be accomplished with a break-even analysis. Defining a Break-Even Analysis As the SBA explains, a Break-Even Analysis is a useful way to measure the level of sales necessary […]
Do you like it?
June 1, 2019
Published by Service2Client on June 1, 2019
Categories
đź–¨ Print⏱ 4 min readWhen it comes to gross margins and the American economy, they vary widely throughout the country’s industries. When New York University’s Leonard N. Stern School of Business recently compiled gross margin statistics for January 2019, they found the low end includes the Auto and Truck industry with a gross margin of 11.45 percent and the Oilfield Services/Equipment industry with a gross margin of 10.70 percent. On the top end, the General and Diversified Real Estate industry saw a gross margin of 73.08 percent and the Investments and Asset Management industry saw a 70.67 percent gross margin. While these gross margins are divergent, understanding more about gross margins gives better context for understanding this measure. Why Gross […]
Do you like it?
May 1, 2019
Published by Service2Client on May 1, 2019
Categories
đź–¨ Print⏱ 4 min readAccording to a March 22 Internal Revenue Service News Release, 2018 federal tax filers might be able to have any penalties for an underpayment of estimated tax removed. This could be possible if they’ve paid at least 80 percent of their 2018 tax obligations through either quarterly estimated payments, income tax withholdings or a combination of both during the 2018 calendar year. This new level was established after the 90 percent payment requirement was reduced to 85 percent of estimated tax obligations on Jan. 16. With paying estimated taxes a legal requirement for many taxpayers, let’s examine how this works for individuals and business entities. Individuals and Organizations Responsible to Pay Estimated Taxes For the most […]
Do you like it?
April 1, 2019
Published by Service2Client on April 1, 2019
Categories
đź–¨ Print⏱ 3 min readWhen it comes to figuring out a company’s net profit margin, this calculation gives a business and its financial officers a much better picture of the company’s profitability. Defining Net Profit Margin Net profit margin determines the percentage of revenue that ends up as profit after expenses are accounted for. Represented as a percentage, it’s calculated by taking the company’s net profit and dividing it by the entire revenue. Looking at the Formula Itself When it comes to calculating the net profit, it goes beyond the gross margin calculation, which only factors in the “cost of goods sold” – or how much the input materials and direct labor cost the company to produce saleable goods. Determining […]
Do you like it?
March 1, 2019
Published by Service2Client on March 1, 2019
Categories
đź–¨ Print⏱ 3 min readWhen it comes to making cash flow projections, we’re all aware that it’s not an exact science. One of the main difficulties about accurately projecting cash flow has to do with timing. Examples include factoring in overhead such as payroll; lease or tax payments on the building; using credit to make purchases or for future investment to grow the business; and when payment is collected from clients. Understanding Cash Flow Projection One important reason that many business owners create a cash flow projection is to include it in their business plan when they approach an investor or bank for a loan. Detailing a company’s cash flow projection consists of three parts: positive, negative or break-even results […]
Do you like it?
February 1, 2019
Published by Service2Client on February 1, 2019
Categories
🖨 Print⏱ 4 min readWhen it comes to businesses dealing with seasonal sales, making payroll and other financial obligations can be stressful on budgets. However, one way to deal with fluctuating sales and cash flow problems is to see if invoice factoring is appropriate to meet year-round needs. Invoice Factoring One way for businesses dependent on seasonal sales is to have better financial predictability and available resources, as the Journal of Accountancy explains. Businesses can accomplish this by selling their accounts receivables through factoring. Companies looking to increase cash flow during the slow sales season can benefit by selling their accounts receivable to a third-party business called a factor. When a company sells its invoices through the factoring process, it […]
Do you like it?
January 1, 2019
Published by Service2Client on January 1, 2019
Categories
đź–¨ Print⏱ 4 min read When it comes to liability insurance, the saying “you can never be too prepared” is quite meaningful. While business owners cannot predict what happens day to day or year to year, they can look into having business liability as way to give themselves peace of mind. The first step is to understand why it’s so important. The Rocky Mountain Insurance Information Association reports that more than one in two home-based business owners lack necessary insurance. Furthermore, the Independent Insurance Agents of America (IIAA) found that 4 of 10 respondents do not have enough coverage because they believe their homeowners policy covers commercial liability. As you can see, education on this matter is essential. Here are […]
Do you like it?
FREE 30-Minute No-Obligation Consultation