Category: Bookkeeping

Effective allocation of these costs helps ensure that each project bears its fair share of overhead expenses, contributing to a more accurate assessment of project profitability. Effective construction bookkeeping is not just a compliance necessity; it’s a strategic asset that drives profitability, fuels growth, and empowers informed decision-making. Integrating accounting and construction project management software… Continue reading A Guide to Construction Bookkeeping

A high DSO can indicate slow collections, potentially straining resources. Conversely, a low one suggests that customers are paying quickly, enhancing cashflow. By effectively managing this metric, the SMB can optimize its cashflow, ensuring it has sufficient liquidity to cover other expenses or invest in new projects. However, an imbalanced number can harm supplier relationships… Continue reading Direct Method Cash Flow from Operating Activities Example

The operating activities section reports the cash flows that arise from the operating activities of a company during its reporting period. It is the first and perhaps the most complex section of the statement of cash flows. There are two commonly used methods for preparing the operating activities section – the direct method and the… Continue reading Cash flow statement direct method

Furthermore, a higher contribution margin ratio means higher profits. The contribution margin ratio refers to the difference between your sales and variable expenses expressed as a percentage. That is, this ratio calculates the percentage of the contribution margin compared to your company’s net sales. Total Contribution Margin Here, we are calculating the contribution margin on… Continue reading Contribution Margin: What It Is, How to Calculate It, and Why You Need It