Measuring productivity

I’ve written extensively about doing more with less – productivity.  Productivity is a very powerful tool, and it can allow youto dramatically increase your revenues and profits, without spending much more on assets or expenses. How can you measure productivity? First, define your process.   What is it that you want to do more productively? […]
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Accrual accounting explained

People generally think of accounting in terms of cash flows.  Money comes in and money goes out.  However, this is not how accountants measure revenues, expenses or net income.  They use a system called accrual accounting. Accrual accounting records revenues when they are earned and expenses when they are incurred. Revenues are earned when the […]
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Accounts payable explained

Accounts payable are bills due to suppliers for inventory items already purchased. To compete for your business, many suppliers will extend you credit and flexibility to pay for purchases 30 more days after you receive them.  You can use this interest-free credit to help fund your operations.  Most suppliers will offer their customers easy credit […]
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Prepaid assets explained

[Image source: We Love Costa Rica, at: http://www.welovecostarica.com/watching/] Prepaid assets are expenses, such as rent or insurance, that you paid for in advance.  For example, suppose you paid three months’ rent in advance on January 1.  This would be an asset for the three months that you would be entitled to use the rented space, and would […]
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