Resources Library

Increasing Accounting Firm Capacity Without Adding Staff

Download this ebook to discover how capacity planning can be done effectively and efficiently — through the use of technology. 

Avoiding Virtual Pitfalls with Jody Padar and Justin Whitehead

There are a number of cyber risks popping up that can put your systems and data at risk. Bad actors are taking advantage of remote workers - here's what you need to look out for

A Q & A Session with Jody Padar | The Bridge to the Cloud with Wolters Kluwer and Botkeeper.

How can you continue to differentiate your offering, and ensure your clients’ success? How do you adopt new technologies and new processes that can help us live in the “new normal”? Now is your chance to get the answers to these questions! Watch the live Q&A session with Jody Padar, VP of Strategy at Botkeeper, and The Radical CPA who has successfully achieved the "No-Touch Tax Return" to get those questions answered!

The Art of the Leadership Pivot

Gretchen Pisano’s pointer for nailing the pivot and common missteps: Every new day is an opportunity to communicate and support your clients.

Leading while afraid

The world in the time of Corona is upside-down! In the next six to ten months, new legislation, new social and professional norms, and new practices in every sector will become solidified to create a new normal. Where does this position CPAs?

CARES Act Opportunities for Your Clients

Are you trying to ensure your clients take advantage of every opportunity the CARES Act presents them? Learn more with Nellie Akalp, founder and CEO of CorpNet to help your clients better navigate their options! 

Dealing with emotional ramifications

What does virtual leadership mean in a coronavirus environment? Listen to the full recording of this video interview for more awesome insights to help you and your team right now!

3 Approaches to Bookkeeping Tips and Tricks to Help You Become a Pro

Poor accounting is a weakness for many small businesses. For owners, finding the time to do the job right isn’t easy. Thankfully, there’s another way.

5 Ways to Make Your Small Business Bookkeeping Efficient

With improved accuracy and speed, Botkeeper offers you the chance to leverage technology in a way that can greatly benefit your business.

The Cost of Bad Bookkeeping

The importance of making the right bookkeeping decision for your business should not be underestimated. Make sure your business will never fall victim to sloppy bookkeeping!

5 Steps to Streamline Your Bookkeeping Operations

7 Things All Business Owners Do Daily

If you're just getting into business for yourself, you might be wondering what to expect. Learn more in our video, "7 things All Business Owners do Daily"!

Four Signs that Your Bookkeeper is Stealing

Watching for these major red flags can help clear the way for you to take steps as needed Do you know what to look for? Here are 4 signs that can help you determine if your bookkeeper is stealing!

The Impact on the Accounting Profession

In this trying times, how do all of these uncertainties for CPAs and Accountants impact future revenue, staffing, firm operations, and more? Join our VP of Strategy, Jody Pada get the scoop from Daniel Hood, editor-in-chief of Accounting Today, on the findings from their recent survey done in conjunction with ADP.

What Is the Great Resignation? an Interactive Infographic

Learn all you need to know about the Great Resignation in this infographic — plus what your accounting firm can do to prevent major turnover.

How does Botkeeper’s ML Work?

Discover the power of machine learning for accounting firms, including a general overview, Botkeeper's application of ML tech, and how it brings value to accounting firms.

Accounting Graduate Landscape

Having the right talent for your Accounting firm is vital for growth and success! However, recruiting and retaining top talent are one of the challenges Accounting firms face thanks to major shifts in the supply of talent and the changing demographics of accounting graduates.

2024 CAS CALENDAR

Daily ideas for social posts, training, tips, and tricks to help you market your CAS department. Get your services front-and-center with your existing and prospective clients!

Accounting 101

No matter what size your business, understanding the basics of accounting is incredibly useful. Accounting is simply the process of recording, analyzing, and interpreting a business’s financial information.

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Accounting Software

Accounting software is a type of computer software used by business owners and accounting specialists to perform bookkeeping and accounting operations.

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Accounts Payable

An accounts payable (AP) entry indicates a company's obligation to pay off debts to its suppliers or creditors within a given period in order to avoid default.

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Accounts Receivable

The accounting term “accounts receivable” specifies “accounts” a business is entitled to receive because it delivered a service or goods.

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Amortization

Amortization is a comprehensive financial concept with dual implications. In the context of loan management, amortization refers to the systematic process of repaying a loan through regular, scheduled payments over a predetermined period.

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Audit

An audit entails a systematic and comprehensive examination of an organization's financial statements, records, transactions, and procedures. This inspection is typically performed by an independent and external body to ensure the accuracy, integrity, and compliance of financial statements with accounting standards and regulations.

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Bad Debt Expense

The concept of bad debt expense represents a significant aspect of financial accounting, acknowledging the reality that not all accounts receivable will convert into cash due to customer defaults.

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Balance Sheet

A balance sheet is a financial statement that provides a snapshot of what a business owns and owes, as well as the amount invested by shareholders.

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Bank Reconciliation

Bank reconciliation is a critical financial control process aimed at comparing a company's internal financial records against bank statements to ensure congruence.

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Benefits

Benefits play a major role in the workplace, representing anything given to an employee beyond their wage or salary.

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Bonds Payable

Refers to the long-term debt a company owes to its bondholders and must repay at a specified maturity date, typically more than one year from the balance sheet date. When a company issues bonds, it effectively borrows money from investors who become creditors holding the company's debt.

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Book Value

Book value offers a concise measure of the net worth of an asset, as recorded in a company's financial statements, specifically on the balance sheet.

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Capital Asset

Capital assets embody the significant resources a business procures and employs over the long run, representing substantive investments within the company's operational framework.

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Cash Basis Accounting

Cash Basis Accounting is the method where a business records revenue and expenses at the time they are actually received or paid, not in the period in which they were incurred.

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Cash Flow

Cash flow captures the actual financial movement within a company, playing a pivotal role in highlighting a business's ability to generate cash and meet its operating, investing, and financing obligations.

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Cash Flow Statement

A cash flow statement is just what it sounds like: an indication of the cash generated or used by a company in a given period.

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Chart of Accounts

Think of a chart of accounts (COA) as a filing cabinet where all a company’s financial transactions are stored and a complete listing of all the accounts that are currently in use are kept.

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Class Tracking

Businesses that want to get a more detailed view of their finances can use class tracking to determine which areas of the business are doing well and which need improvement.

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COGS

One of the most important business accounting terms, COGS is the acronym for the cost of goods sold and represents the total cost required for a company to produce a product or deliver a service, including labor and materials.

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Comprehensive Income

Comprehensive income extensively chronicles a company's change in equity during a financial period that is not derived from transactions with shareholders (such as dividends or share buybacks).

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Contingent Liability

It is a potential financial obligation that may occur depending on the result of a future uncertain event. This liability is not certain to occur but depends on the outcome of a particular event, such as a lawsuit, government investigation, or product warranty issue.

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Contractor vs Employee

Independent contractors are self-employed and provide specialized or requested services on an as-needed basis, while employees work for employers and often have little control over their work and performance.

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Cost of Goods Sold (COGS)

A financial metric that represents the direct costs linked to the production of the goods sold by a company. This figure includes the cost of the materials and labor used to create the product but excludes indirect expenses such as sales and marketing.

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Cost of Sales

Often equated to the Cost of Goods Sold (COGS), it represents the direct costs of producing the goods or services a company sells. It is a defining factor for determining gross profit, making it central to a range of key business operations, from production to financial reporting.

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CPA, Controller, CFO

Quick definitions: A CPA is a Certified Public Accountant. A Controller is responsible for all accounting-related activities within an organization. A CFO is the Chief Financial Officer, responsible for all financial actions of a company.

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Credits and Debits

All business transactions have a monetary impact on the financial statements and the bottom line of an organization. When accounting for these transactions, a company records the numbers in two accounts, a debit column on the left and a credit column on the right. The use of a 2-column transaction recording format is the most essential of all controls over accounting accuracy.

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Current Ratio

The current ratio is an analytical metric that offers insight into a company's capacity to satisfy its short-term obligations within a year or operating cycle, using assets expected to be liquidated in the same period.

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Deferred Revenue

Also known as prepaid revenue or unearned revenue, deferred revenue is the money received by a business in advance of having earned it. It calculates an asset’s depreciation expenses based on the date of purchase, initial cost, useful life (how long a company intends to use it), and tracks beginning and ending accumulated depreciation, or the value of the assets when it is replaced.

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Double-Entry Bookkeeping

Double-entry bookkeeping is a comprehensive system in which every financial transaction records at least two accounts.

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Earnings Before Interest and Taxes (EBIT)

Earnings Before Interest and Taxes (EBIT) is a financial measure that assesses a firm's operational profitability by focusing solely on the business's core income-generation capabilities.

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Equity

Equity refers to the portion of a company's total value that belongs to the shareholders after subtracting all liabilities. It represents an owner's interest in an organization and is often referred to as shareholder's equity or owner's equity in the context of different types of businesses.

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Financial Reviews

A financial review is performed to ensure no material changes are needed to bring a company’s financial statements into compliance within an applicable financial reporting framework such as GAAP.

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Fiscal Policy

Embodies the government's budget management strategy and taxation policies to influence the national economy. These economic policies control inflation, drive economic growth, reduce unemployment, and stabilize the economy over the business cycle.

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Fiscal Year

A fiscal year, often abbreviated as FY, is a one-year period governments and businesses use for accounting and financial reporting. It is tailored around a company's operational needs or specific regulatory requirements and does not necessarily align with the calendar year.

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Fixed Cost

Expenses that remain unchanged with fluctuations in production volumes or sales output, standing as a constant number regardless of the level of business activity. Fixed costs include rent, salaries, insurance, and depreciation charges.

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GAAP

GAAP stands for “generally accepted accounting principles” and is used by businesses to: Properly organize their financial information into accounting records, summarize the accounting records into financial statements, and to disclose certain supporting information.

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General Ledger

The general ledger is the foundation of a company's financial information system. It contains all the accounts necessary to prepare financial statements and records all of a company's business transactions through double-entry bookkeeping.

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Gross Margin

Gross margin, also known as gross profit margin, significantly influences business strategy and pricing policies. This financial ratio demonstrates the percentage of revenue remaining after subtracting the Cost of Goods Sold (COGS), a critical measure showing how efficiently a company manages its production and supply chain operations.

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How to Calculate Income

Calculating income is essentially deducting costs and expenses from profits. It starts by calculating the total amount of sales made during accounting and is followed by deductions for certain costs or other operating expenses. When all is said and done, the company learns how much it earned or lost during the accounting period.

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Income Statement

Also known as the Profit and Loss Statement, it is a financial report detailing a company's financial performance over a specific period. This statement breaks down the revenue earned and expenses incurred, concluding with a net figure representing the company's financial gain or loss.

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Indirect Cost

Expenses that are not directly traceable to a specific cost object, such as a particular product, service, or project. These costs are necessary for the overall operation of a company but cannot be directly allocated to the goods or services produced.

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Internal Control

Procedures and policies implemented by an organization to ensure the accuracy and reliability of its financial reporting, safeguard assets, and encourage adherence to laws and regulations.

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Inventory

It encompasses all the goods a company holds with the intention of sale or use in production, making it a critical component of business operations and financial management. Proper inventory management balances the need to meet demand without incurring unnecessary costs or losses from overstocking or stock obsolescence.

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Journal Entry

This is a fundamental accounting process component, documenting every financial transaction in an organization's ledger. Each journal entry includes important details: the date, involved accounts, and amounts debited or credited.

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Liability

Liabilities are a fundamental part of the financial structure of a company, representing debts or obligations that arise during business operations, which must be settled over time through the transfer of economic benefits, including money, goods, or services.

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Liquidity

Liquidity is a multifaceted concept in finance, referring to the ability of an asset to be converted into cash quickly and the capacity of a company to meet its short-term obligations. In the context of assets, liquidity indicates the ease and speed with which an asset can be sold in the market without affecting its price significantly.

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Modified Adjusted Gross Income

Modified adjusted gross income (MAGI), determines an individual’s eligibility for important tax benefits, including whether they can contribute to an IRA or deduct contributions to an individual retirement account. Eligibility for certain income tax credits and education tax benefits are also based on MAGI, as is the eligibility for subsidized health insurance through the marketplaces under the Affordable Care Act, and for income-based Medicaid.

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Monetary Policy

The mechanism through which a country's central bank influences its economy, primarily by managing interest rates and controlling the money supply. The primary objectives of monetary policy include handling inflation, controlling unemployment rates, stabilizing the currency, and fostering an ideal environment for economic growth.

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Net Income

Net income, the quintessential measure of a company's profitability, encapsulates the essence of a company's financial success over a specific period. Derived by subtracting total expenses, including taxes and cost of goods sold, from total revenues, it provides a comprehensive snapshot of the company's financial performance.

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Operating Expenses

Operating expenses encompass the array of costs associated with running a business that are not directly tied to producing goods or services. These expenses include sales and marketing, administrative salaries, office supplies, and utilities.

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Operating Margin

The operating margin is a profitability ratio calculated by dividing the operating income by the net sales. It measures how much of every dollar in sales translates into profits before deducting taxes and interest. This metric is a key indicator of a company's core business's efficiency and health without distortion of non-operating incomes, financing costs, or tax impacts.

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Payroll Taxes

Payroll taxes represent compulsory taxes employers must withhold from employees' wages and salaries. These taxes are crucial to a country's taxation system, financing essential public services such as social security and healthcare. For businesses, administering payroll taxes is a significant responsibility, requiring diligent adherence to all tax codes and rates, which may vary by jurisdiction.

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Prepaid Expense

Prepaid expenses represent a company's advance payments for goods or services to be received in the future. They are recorded as current assets on the balance sheet, reflecting the future economic benefits the company expects to receive.

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P&L Statement

All companies must generate revenue to stay in business. It is used to pay expenses, taxes to local, state, and federal governments, and interest payments on debt. Once the costs of doing business are paid, what's left over is called net income which is, in theory, available to shareholders. Often the decision is made to retain earnings for growth and future investments in the business instead.

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Retained Earnings

 The accumulated profits a company chooses to reinvest in the business rather than distribute to shareholders as dividends. This internal funding source enables companies to finance expansion, research and development, debt reduction, and other activities aimed at long-term growth and value creation.

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Return on Investment (ROI)

A performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of several different investments. ROI directly measures the return on a particular investment relative to the investment’s cost.

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Revenue Recognition

A cornerstone principle in accounting, responsible for setting the framework within which revenue is officially recorded and reported on financial statements. This principle dictates that revenue should only be recognized when earned or when earning it is possible.

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Sales Revenue

The total money generated from selling goods or services before any expenses are deducted. This vital metric is often viewed as the primary indicator of a company's financial performance and market position.

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Straight-Line Depreciation

It is a method used to evenly distribute the cost of a tangible asset over its estimated useful life. This approach assumes that the asset will provide equal utility or value to the company each year, resulting in a consistent annual depreciation expense.

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Tax Liability

Refers to the total amount of tax that individuals, companies, or other entities are legally obligated to pay to tax authorities within a specified period. It encompasses various forms of taxes, including but not limited to income tax, corporate tax, sales tax, and property tax.

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Trial Balance

An essential bookkeeping worksheet, acting as a checkpoint in the accounting process to verify the balance of debits and credits across all accounts in an organization's ledger.

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Unearned Revenue

Unearned revenue represents payments a business receives for services or products that are yet to be delivered or completed. This is crucial for understanding a company's cash flow and future obligations, as it embodies the prepayment from clients for goods or services expected to be provided later.

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Variable Cost

Variable costs are business expenses that fluctuate proportionally with the production or service output levels. Components of variable costs often include raw materials, production supplies, and labor directly implicated in the production process.

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Variance Analysis

A financial management tool that helps assess the differences between planned financial outcomes and actual financial performance. By comparing actual results to budgets or forecasts, businesses can identify the reasons behind financial deviations, whether favorable or unfavorable.

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Wage Expense

Constitutes a company's total cost to compensate its hourly employees. This expense is reflected on the income statement and can be categorized either under the Cost of Goods Sold (COGS) or as an operating expense.

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Working Capital

A financial metric representing the difference between a company's assets and liabilities. It is a critical indicator of operational efficiency and short-term financial health.

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Write-Off

A write-off in accounting is a formal recognition that a portion of a company's assets has lost all or part of its value and is no longer recoverable. This action reduces the value of an asset on the balance sheet to zero or a lower valuation.

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Yield

Represents an income return on an investment, typically expressed as a percentage, indicating the interest or dividends earned from holding a particular security. It encapsulates the returns an investor realizes on securities, such as bonds, stocks, or other financial instruments.

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Zero-Based Budgeting (ZBB)

A budgeting process where every expense within an organization must be justified for each new period, essentially starting from a "zero base." Unlike traditional budgeting methods that adjust previous budgets to account for new expenses, ZBB requires departments to justify every dollar of their requested budget regardless of past expenditures.

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