Category: Business Activity

To Determine Business Revenue and Receivables


In most businesses, what drive the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items is the accounts receivable calculation.

As a hypothetical situation, imagine a business that offers all its customers a 30-day credit period, which is fairly common in transactions between businesses, (not transactions between a business and individual consumers).

An accounts receivable asset shows how much money customers who bought products on credit still owe the business. It’s a promise of cash that the business will receive. Basically, accounts receivable is the amount of uncollected sales revenue at the end of the accounting period. Cash does not increase until the business actually collects this money from its business customers.

However, the amount of money in accounts receivable is included in the total sales revenue for that same period. The business did make the sales, even if it hasn’t acquired all the money from those sales yet. Sales revenue, then isn’t equal to the amount of cash that the business accumulated.

To get actual cash flow, the accountant must subtract the amount of credit sales not collected from the sales revenue in cash. Then add in the amount of cash that was collected for the credit sales that were made in the preceding reporting period.

If the amount of credit sales a business made during the reporting period is greater than what was collected from customers, then the accounts receivable account increased over the period and the business has to subtract that difference from net income.

And when the amount they collected during the reporting period is greater than the credit sales made, it means that the accounts receivable decreased over the reporting period, and the accountant needs to add to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.

 

Your Small Business May Need a Virtual Assistant – Part 2


This is the continuation of a previous post titled, Your Small Business May Need a Virtual Assistant

7. You have a blog, but do not have time to update entries regularly. Brief ideas and thoughts or links can be emailed to your VA, who then updates your blog.

8. You need a website set up, either on a directory site or using a web-hosting service. Your VA can design a custom site or adapt a template, and can maintain it on a regular basis, adding current articles or information as needed.

9. You need a telephone conversation (i.e., conference call, teleclass, etc.) recorded. The VA records the call and transcribes the tape for the participants.

10. You dictate letters, reports, notes or memos on a cassette tape and mail it to your VA via overnight delivery. Your VA transcribes the tape, prints the letters on your stationery and mails them the following day. Or, send your VA an MP3 file of your recording. S/he transcribes the audio and emails the completed transcript back to you.

11. You cannot keep up with the volume of email and are missing important messages. You or your webmaster set up a general email account (info@mycompany.com). Your VA retrieves all email, sorts, responds to routine requests, and forwards items of importance to you at your personal email account (myname@mycompany.com).

12. You are going on vacation, but can’t let your customers wait for two weeks. Your VA answers the phone and email and responds to customers. You are called for urgent calls while you are away if you want.

13. You need bill paying services. You simply have all bills mailed to a post office box near your VA. Your VA sets up a checking account with payment authorization for both you and the VA. As the bills are prepared for payment, your VA notifies you how much money to deposit into the account. The bills are then paid. Another option, if available from your bank, is to use on-line bill payment services. Security features can be set up which make this a safe and simple solution.

14. You implement an advertising plan or promo. Your VA can monitor the plan, submits ads by deadlines, track expiration dates, coordinate payment, handle correspondence with advertising vendors, and continually update the advertising report and/or advertising budget report for your review.

15. You would like to write a book, but can’t get organized. Your VA can compile rough drafts, notes, fragments, letters or memoirs and get them into an editable form to begin the process of formatting the book, research publishers, and send out queries.

Virtual assistants are here to stay. The above shows that virtual assistants can and do work well for most small and home-based businesses and especially solo-preneurs. Over the next couple of years you can expect your conversations with regards to virtual assistants to go from “What is a virtual assistant and what does a virtual assistant do?” to that of “Who provides your virtual assistant services?”

Implementing the use of a virtual assistant, especially through a virtual staffing agency, is a low-cost, low-risk undertaking. If the virtual assistant doesn’t work out, you simply request another, perhaps for a better fit. What’s more, coupling the use of a virtual assistant (or several virtual assistants) with your already up-and-coming business can catapult your income and success to the next level and beyond.